SUNBIZ

Government To Demarcate Residential Rental Freeze

Government will now look at revising the residential rental freeze demarcating high end accommodation from the lower end. Attorney-General and Minister for Economy, Aiyaz Sayed-Khaiyum, indicated this during the Fiji
11 Jul 2016 11:34
Government To Demarcate Residential Rental Freeze
Fiji Chamber of Commerce and Industry (FCCI) vice-president Nur Bano Ali (right) briefs the participants of the Fiji Business Forum 2016 at the Holiday Inn in Suva on Saturday. Photo: FILIPE NAIGULEVU

Government will now look at revising the residential rental freeze demarcating high end accommodation from the lower end.

Attorney-General and Minister for Economy, Aiyaz Sayed-Khaiyum, indicated this during the Fiji Business Forum at the Holiday Inn Suva on Saturday.

He was responding to question raised by c who owns at least 20 apartments in Suva which are more upmarket for expatriates.

Mr Halabe’s concern was the rental freeze over the past nine years had meant they could not increase rental pricing for their high end targeted apartments.

He highlighted that as a result, the Fiji National Provident Fund, which owns a quarter of these properties, had declared them non-performing assets.

He said they had been declared non-performing asset given they could not increase the rental amount since the rental freeze had been in place since 2007.

“I am sure the target was on the lower end where we are trying to protect them. But the upper end obviously which is a totally different market has been inefficiently restricted.”

Mr Halabe emphasised that there was a big shortage in terms of upmarket rental properties/apartments in Suva to which Mr Sayed-Khaiyum agreed.

Mr Sayed-Khaiyum said: “There is a demand in particular in Suva given the growth in the expatriate community, with the growth of the people in the high income bracket.”

The rental freeze was introduced by Government to protect the non-so-rich people from unfair rental price hikes.

But Mr Sayed-Khaiyum now agrees that there needed to be some sort of middle ground reached.

“You are right that with the rental market, there needs to be some sort of distinction made.

“The trick for us is to ensure we are able to make that demarcation in terms of where is the cut-off point.

“This is because the reality also is a shortage of residential homes in the lower end of the socio-economic scale too. Our trick is to ensure we segregate that.”

 

Private sector assistance

In doing so, Mr Sayed-Khaiyum stressed to the business community that an opportunity exists for the private sector to partner with Government to building low-medium cost housing/rental properties/apartments.

He highlighted, as announced in the Budget the past year, Government had said there is another economic opportunity in the housing sector for private sector investors who go into building low-cost housing.

“Government is giving 12 year tax holiday, seven per cent investment rebate and then you can carry your losses forward for eight years,” he said.

“We have recognised that Government cannot expedite the growth of these sectors alone. That is a reality and this is why we need to partner with the private sector.”

 

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