Hunza Properties Bhd chairman Datuk Khor Teng Tong proposed that the 30 per cent low-cost housing quota imposed on private property developers be reduced to 15 per cent in order to help the property industry cushion the impact of the current softening of the sector, which is expected to continue into 2009.

The review will spur property players to reduce prices of other units being developed. Khor said that the current quota is not helping consumers since developers merely transfer the cost in building other properties to them.

"But by being made to subsidise less, we can then transfer the cost-savings to our buyers," he told a media briefing in Penang on Wednesday after announcing Hunza's financial results for the year ended June 30 2008.

Khor noted that the property cycle is on a downward trend. "Factors such as price increase of building materials and the current local political environment are impacting negatively on the industry," said Khor, who is also president of the International Real Estate Federation (FIABCI) Penang branch.

Other items on Hunza’s wish list for Budget 2009 include a review on the stamp duty to lower costs of home ownership, as well as control of steel and cement prices.

Meanwhile, construction of the RM700 million Gurney Paragon in Pulau Tikus is on schedule despite the company’s cost-cutting measures such as taking on the role of main contractor for future phases of the project. Khor said that such measures enable them to save between six per cent and 10 per cent in margins.

He also said that Gurney Paragon and Infinity in Tanjung Bungah are targeted at foreign purchasers; and the government can help Malaysian property players who market their projects overseas by giving tax incentives for overseas property promotions.

"Hunza has not experienced any significant margin compression as our products remain in demand and we have adjusted prices to cover the increase in cost," he added.