After months of speculation, the National Housing Policy 2.0 or Dasar Perumahan Negara (DRN) 2018 – 2025 was launched by Housing and Local Government Ministry (KPKT) on Monday, 28 January 2019.
The policy was the result of wide public and private sector engagement to address various issues surrounding the housing market. Initiatives announced as part of this policy include:
1. National Home Ownership Campaign
Under this campaign, the government is teaming up with developers and lenders to market about 30,115 completed houses at a discounted price in the upcoming property fair – Malaysia Property Expo (MAPEX 2019). Happening on 1 – 3rd March 2019 in KL Convention Centre, the campaign will see the participation of around 180 home builders and banks, which will help home buyers secure financing.
2. National Community Policy
Part of the government’s effort to improve the living condition of low-cost housing residents within the PPR’s and other public housing schemes.
3. National Affordable Housing Council
In line with the PH Government’s manifesto, the council, chaired by Prime Minister Dr. Mahathir Mohamad, will be in charge of monitoring affordable housing construction in the country, coordinating a database and to implement a self-renting scheme for the low and mid-income groups.
4.National Affordable Housing Policy (DPMM)
Clearer guidelines to be announced however among the focus areas include fixing property prices to between RM90,000 and RM300,000 depending on the location and average income of the local community as well as a minimum house size of 900 sq.ft. for properties within this price bracket.
5. Widening of the Rent-to-Own (RTO) Scheme
The RTO scheme is designed as an alternative form of home financing where home buyers can rent the property from the government for 5 years before obtaining end-financing in the 6th year to purchase the property outright.
These policies should be lauded for its focus on home ownership particularly for the B40 and a solution to the growing number of unsold units in the market or overhang. However, the policy as announced appears to focus squarely on addressing short-term demand related issues.
Notably absent is a plan to mitigate the factors that led to the current state of the market (ie. inflation, oversupply etc.).
The PH government in its manifesto had identified addressing landbanking or hoarding of prime development land by developers as well as the implementation of new building technology to reduce the cost of development. Initiatives crucial towards a healthy sustainable property market.
Coupled with revisions to RPGT and Stamp Duty including selected exemptions, the PH government appears to be taking short-term populist measures to managing what is a very complex and fragmented housing market.
Thor Joe Hock is the CEO of MyProperty Data
The views expressed are those of the author and do not necessarily reflect those of FMT.