NEW STRAITS TIMES. 10TH NOVEMBER: The government’s clearance to build 67,944 affordable homes this year in the Federal Territories alone and the stamp duty exemption show the need for help for first-home buyers, its commitment to the lower income group, and the value of affordable housing in nation-building.
Although there is a need for affordable housing, market forces such as rising living expenses, interest rates, and increases in the price of materials and commodities are making it difficult to meet demand, according to Datuk Jimmy Doh, managing director of Lagenda Properties Berhad.
While the Malaysian government and businesses are making an effort to meet this need for affordable home ownership, more work still needs to be done as post-pandemic inflation rates grow and Malaysians are forced to negotiate the mismatch between average housing costs and household income, he said.
According to Doh, developers have started to use smaller, staggered releases recently to make sure that the units on offer can be taken up by the market.
However, he claimed that the majority of the homes constructed for the B40 population under the affordable home projects are still seen as being “unaffordable.”
The average home price in Malaysia is more than RM380,000, yet Lagenda estimated that the B40 maximum affordability is RM230,000, demonstrating a significant price mismatch between affordability and property prices for this group.
These findings are supported by the National Housing Department which reported that just one in five houses approved for construction in the last five years was priced below the government’s affordable housing price ceiling of RM300,000.
This gap between housing costs and income is mostly caused by developers’ inability to withstand declining profit margins due to growing building, land, and regulatory costs amid inflation and a labour scarcity.
Doh said that Lagenda has been addressing this issue by enhancing the productivity and efficiency of its construction segment through the use of technologies like the industrialised building system (IBS) to lessen reliance on labour and internal construction and materials to reduce construction costs.
To retain a solid position in the market and diversify its landbank, Lagenda also makes the most of its expanding capabilities in the building construction and land acquisition business strategies.
The developer is setting the bar for private sector cooperation with the government since both the public and private sectors are battling to give critically needed access to sustainable, liveable, and accessible developments at reasonable rates.
According to Doh, these partnerships aim to close the gap between the two industries and put up strategies to provide homes for single people as well as families.
“We are exploring collaborations with various state-owned companies, enabling them to participate in the supply of affordable privately developed homes,” Doh said.
He mentioned the recent partnership between Lagenda and Kumpulan Hartanah Selangor Bhd, which will enable Lagenda to transform underutilised state-owned property into a township with around 2,000 affordable landed residences at under RM250,000.
Lagenda promotes affordable home ownership by basing the home price on building costs and median household income in the states where its townships serve the B40 and M40 income groups.
According to the National Affordable Housing Policy’s 2019 criteria, single-story terrace homes in these townships cannot cost more than RM250,000.
“We strongly believe in empowering every Malaysian family to own a home regardless of income level and this social cause is what drives us as a group. From a macro perspective, homeowners are the cornerstone of community building, they are economic drivers in an area, and homes are a constantly appreciating retirement plan,” added Doh.