AFFORDABILITY IS KEY TO LAGENDA PROPERTIES' SUCCESS

By Rosemarie Khoo Mohd Sani

KUALA LUMPUR, March 4 -- Housing is one of the bread-and-butter issues that matters most to Malaysians for ages and the key issue remains unchanged -- unaffordability.

While developers are keen on developing prestigious and concentrated areas such as the Klang Valley, Penang and Johor Bahru; Perak-based Lagenda Properties Bhd strives to fill the void in providing affordable housing for medium and low-income earners.

Managing director and chief executive officer Datuk Jimmy Doh Jee Ming said many households still could not afford to own a house simply because there is a huge mismatch in the real affordability pricing besides the demand and supply.

“Instead of lending more money or stretch the loan instalment further, especially for first-time house buyers, it would better to offer a house not exceeding the buyer’s 30 per cent net income, or else this will burden his finances to repay the loan,” he said in an interview with Bernama.

He added that as buying a house is a big-ticket purchase that would likely last throughout a person's whole career life, the company has decided to engineer its products by matching the house prices according to the buyer’s net income level.

"Before we enter into any projects, we also find out what's the average income level in that area because each state and even cities and districts have different income levels.

"For example, if you are earning RM2,000 per month, we will build something that you can pay between RM600 and RM700 a month," he said.

Each unit of the houses by Lagenda is priced between RM150,000 to RM200,000 per unit.

The company is also currently launching three affordable projects in Perak, namely new phases of the existing township in Sitiawan and Teluk Intan, as well as one new township in Tapah. 

Next year, the company is planning to build a new township in Sungai Petani, Kedah, with a joint venture partner, Bina Darulaman Bhd. 

As for building affordable houses, he said the company does not compromise on quality despite a popular belief that low cost equates low quality.

"We are able to furnish homes with quality materials as we have the economy of scale. Given our mass production, we are able to source at very competitive prices, retaining a good standard building," he said.

Doh hopes the government would look at cutting red tapes and reducing the contribution from affordable developers to government agencies and the local authorities, to encourage more developers into the segment.

Despite the COVID-19 pandemic, the company recorded a stellar net profit jump from RM7.69 million in 2019 to RM140.90 million in 2020.

"We are optimistic of the affordable housing segment, as it has been proven by the higher sales post-Movement Control Order (MCO) in 2020. We also believe this segment is resilient and recession-proof," Doh said.

Following a commendable performance in the financial year 2020, he expects a sales target of RM1 billion this year, if each of the three township developments generates 2,000 unit of houses.

“We also looking for strategic partners on the shareholders' level to further expand its business,” he said.

-- BERNAMA