THE EDGE. 2ND JUNE: The Real Estate and Housing Developers’ Association Malaysia (Rehda) reiterated it wants the government to build affordable housing, as the private sector is unable to do so without pushing up prices of open market units under current requirements.
In a statement, Rehda said it supports Prime Minister Datuk Seri Anwar Ibrahim’s call for the affordable housing requirements imposed on property developers to be reviewed to ensure affordable units can be rolled out sufficiently.
On June 1, Anwar reportedly said he wants the housing ministry to review said conditions to ensure developers provide affordable housing — citing that the 30% quota of affordable units per property project was not followed.
The ceiling price for affordable housing set under the National Affordable Housing Policy published in 2019 is RM300,000 per unit.
In the statement issued on Friday (June 2), Rehda president Datuk NK Tong said developers’ current practice of cross-subsidising affordable housing developments — often sold below costs — by raising prices of open market units, have made those units unaffordable to the M40 group.
When such properties fail to attract purchasers, those projects have higher risks of becoming late, sick or abandoned, he said.
“This rings especially true for projects being developed by SME developers without the fiscal means to cushion themselves against financial challenges, which is one of the reasons Rehda has asked for the government to take back the onus to build affordable housing,” he added.
“Rehda Malaysia believes that to make housing more affordable for all rakyat, the government should be fully responsible for the delivery of affordable housing, as it was over 50 years ago, and as it is in many countries worldwide,” Tong said.
This would eliminate the current practice of cross-subsidies that raise the costs of regularly priced housing, making it harder for the M40 community to afford homes, he added.
“Another unintended consequence of higher regularly-priced housing due to cross subsidy is the rise of completed but unsold properties, often referred to incorrectly as ‘overhang’,” Tong said.
He said amid current government initiatives such as Skim Simen Rahmah to address cement price hike, more needs to be done, adding that Rehda is ready to discuss with the government and industry players on how to make houses more accessible especially to the B40 group in a sustainable manner.