AN estimated 60 per cent of 1.6 million is an indisputably sizeable number. According to the Congress of Unions of Employees in the Public and Civil Services (Cuepacs), this is the proportion of civil servants and public sector employees who do not own a home. The figure is based on a survey conducted by Cuepacs last year. In a country that aspires to a housing democracy — where housing delivery is part of public policy — the situation causes much concern. Not being able to provide affordable housing to large swathes of the population is troubling. And yet, the government has not stopped talking about affordable housing and launching schemes and projects intended to overcome the problem, which extends beyond Cuepacs membership. Still, the average Malaysian wage earner is finding that house prices are beyond his reach.
That the rising prices of houses have outstripped the rate of salary increase is in no doubt. The resultant impoverishment of the housing market, therefore, is part of the problem. However, the question begging to be asked is why the shortage of affordable houses when the demand is clearly there? The answers to this quandary are many. Among them, high land prices, scarcity of land and rapid arrival of new residents leading to supply shortage, which in turn puts pressure on the prices of houses in the suburbs and the outskirts. It is no longer unusual to have employees working in Kuala Lumpur commute from Rawang or Seremban and even further out. Of course, the commuter trains make this possible.
The government has, through the annual budget, tried to stem this imbalance. Developers are willing to build high-end homes because of the large margin of profit and a market that reaches overseas. To dampen this enthusiasm, the government has fixed the floor price of property for foreigners at RM1 million. The government has also provided incentives for developers to improve the quality of low-cost homes through subsidies. Also, the 1Malaysia People’s Housing Programme (PR1MA) was set up under the Housing and Local Government Ministry to build affordable houses priced between RM100,000 and RM400,000. Financing schemes like MyDeposit were initiated to help first-time buyers. In short, Putrajaya has not stopped trying and is still doing everything it can to increase the supply and facilitate the purchase of affordable houses by first-time buyers.
For public sector employees, the most appropriate move would be to increase the number of government housing loans with a special low interest rate and have housing projects especially for Cuepacs members. Given the low-risk of bad debts in this respect, the move would serve to encourage the building of affordable homes, particularly, and the economy, generally. Unfortunately, expanding the market alone does not address the marginal profit margin that acts as a disincentive to developers. In the final analysis, there must be price controls over building supplies, and cost of land or more subsidies to absorb losses. For, only when cost of production enables a reasonable margin of profit will there be enough affordable houses to meet the burgeoning demand.