PETALING JAYA: The Real Estate and Housing Developers Association Malaysia (Rehda) Institute has identified nine structural problems in providing affordable housing.
These included:
* fragmented playing field between public and private sectors
* rigid housing policies
* unsuitable location
* land scarcity
* cross subsidies that purportedly made houses more expensive
* rising material costs
* unproductive use of public funds that led to oversupplies
* lower financial approval rate for the lower income groups
* lack of latest market data
Rehda Institute chairman Datuk Jeffrey Ng said there was a lack of coordination between the public and private sectors in providing affordable homes and this was compounded by the different definition of what affordable means.
He said the median household income also differed from state to state.
Ng said this at a media briefing session, here, following the release of a report titled “Affordable Housing Report”.
Also present were Rehda Institute trustee Datuk Ng Seing Liong, Rehda president Datuk Seri FD Iskandar and Rehda deputy president Datuk Soam Heng Choon.
Ng said there were also many agencies within the government that were in charge of providing affordable housing projects and likewise in the private sector.
He said this led to a lack of coordination, which has resulted in the mismatch of supply and demand, thus, leading to the tens of thousands of unsold units.
“Every housing project approval is imposed with affordable housing quota which is scattered in various locations, including where there may be no demand and lacking of a suitable eco-system,” he said.
To address this problem, Ng said Putrajaya needs to set up a Special Purpose Central Agency (SPCA) under the housing ministry to redefine the roles of public and private property developers to provide a holistic master planning for affordable homes.
“The SPCA should streamline the policy formulation based on household income and demographics in respective states and local areas,” he said.
For example, he said the unsold Bumiputera quota that is not released to the open market is adding up to holding cost and overall cost of property development.
As at March 2018, Malaysia recorded a total of 23,599 in residential overhang. Part of these unsold units were reserved for the bumiputera quota policy.
Meanwhile, Iskandar said Malaysia was the only country with high cross subsidy and this had been going on for the past 40 years.
"This can happen if the market is okay, but for the last four years the property market has been facing challenges,” he added.
Iskandar referred to the report that outlined the current cross subsidy model in private developments resulted in purchasers of non-quota houses to pay a higher price for subsidised affordable housing units.
"We would like to suggest that it is the government's responsibility to build affordable housing and the private sector to deliver market-driven properties, without price control and quota," he said.
Iskandar highlighted Rehda Institute report suggestions of converting subsidies to social housing stock such as rental programmes and sale of affordable homes to those who can afford, especially for middle and low income earning groups.
The report also proposed for banks to offer 100 per cent housing loan to the lower income group and first-time home buyers.
It also recommended reintroduction of the Developer Interest Bearing Scheme (DIBS) with a proper mechanism to tackle previous shortcomings.