Understanding Malaysia’s 3 categories of affordable homes

Is the current issue of Malaysians needing a home but being unable to afford one, an issue of demand or supply?

Some people just do not earn enough at present to think of buying a home. However, while the salaries of others are enough, there is a general negative sentiment about buying a house at present.

If this is because of supply, is it because developers are not building the right kinds of homes? Developers are definitely building homes because of the huge number of unsold units in the market at present.

It could be that the majority of Malaysians are still waiting for a concrete solution about our National Housing Policy by the Housing and Local Government Minister Zuraida Kamaruddin.

As reported in The Star, Zuraida said that the government will now be looking at affordable housing through three categories.

The categories are as follows: Houses fetching RM150,000 and below, RM150,000-RM300,000 and RM300,000-RM500,000 homes.

There will be a streamlining of all housing projects under the five housing entities comprising Perbadanan PR1MA Malaysia (PR1MA), 1Malaysia Civil Servants Housing Programme (PPA1M), UDA Holdings Bhd, Syarikat Perumahan Negara (SPNB) and the Hardcore Poor Housing Programme (PPRT).

In other words, she said, “This means that the housing entities will use the same design, same pricing and the same management.”

She added, “We are also looking at various options for social housing requirements in town areas, particularly the rent-to-own (RTO) scheme where those renting will be given time to plan and buy their house after five years (of renting).”

However, the phrase: “same design, same pricing and same management” is still unclear.

Does this mean the designs are exactly the same? The tiles to be used are the same? The pricing of homes in all areas are the same?

In this case, many people would prefer to buy nearer to the Kuala Lumpur city centre versus further away. The only reason why developments continue to stretch further away is due to affordability and connectivity.

Let’s wait for the full National Housing Policy. We can only hope at this stage, that it has gone through full consultation, brainstorming and even discussions with all concerned stakeholders.

This article first appeared in kopiandproperty.com

Charles Tan blogs at property investment site kopiandproperty. He dislikes property speculators and disagrees that renting is better than buying. He thinks it’s either property or poverty. He is presently the CEO of an auction house auctioning assets beyond just properties.