20 Million Simen Rahmah bags introduced by the Madani government to help ease cost of homes

KUALA LUMPUR, 18 April 2023 – The Ministry of Local Government Development (KPKT) together with The Cement and Concrete Association of Malaysia (C&CA) and private housing developers today, introduced a new initiative known as the Simen Rahmah Scheme for the development of affordable homes. This new initiative will involve affordable homes that costs RM 300,000.00 and below, targeted at the B40 and M40 groups.

Under this initiative, C&CA has offered the KPKT 1 million metric tonnes of bulk cement at RM290.00 per metric tonne as compared to the current market price of RM410.00 per metric tonne. This translates to a reduction of RM120.00 per metric tonne, an incentive of 29.3%, which will be borne wholly by the cement manufacturers. The 1 million metric tonnes of cement is equivalent to 20 million standard 50 kilograms cement bags. Presently, the market price of a cement bag is RM22.50 and under this scheme, the price offered is at RM17.50 which is at 22.2% or RM5.00 lower per cement bag.

YB Tuan Nga Kor Ming (YB KM), the Minister of Local Government Development said, “The 1 million metric tonnes of cement, or 20 million cement bags, that will be supplied gradually to affordable housing developers at the reduced price for a maximum period of four (4) four years until 30 June 2028, is according to the respective development’s construction period.” The developments that are eligible refer to housing projects that will be approved under the Advertisement Permit and Developer's License, as prescribed in the Housing Development (Control and Licensing) Act 1966 (Act 118), beginning 1 May 2023 until 30 June 2024 (period of 13 months).

Through this scheme, the rakyat will receive a maximum rebate of RM5,000.00 on home purchases, depending on the house price and type. For example, a house that is originally priced at RM300,000.00 will enjoy a reduction of RM5,000.00 (2.38%), and will be sold at RM295,000.00 instead. This directly benefits the rakyat by reducing the burden of the purchaser’s monthly home loan commitment.

The 20 million cement bags are expected to sufficiently build some 24,000 affordable homes which directly impacts 24,000 future home owners. Considering the lowered cement price compared to the current market price, cement manufacturers are offering a total of RM120 million worth of private incentives to the future home buyers, through the developers.

YB KM adds, “KPKT would like to thank The C&CA and private developers for making this strategic collaboration possible. I hope that there will be more similar collaborations in future and I call upon other private agencies to introduce incentives that will directly reduce the rakyat’s cost of living.”

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