FREE MALAYSIA TODAY. 3RD AUGUST: Even government-subsidised low-cost homes cannot escape the attention of profit-seeking property speculators.
Many have been snapped up at up to double the original price, pushing these homes beyond the reach of those in the B40 community, for whom they were built in the first place.
This is a common practice in the secondary market, according to Joe Thor, general manager at PropertyGuru DataSense.
He estimates that at least 30% of buyers in the sub-sale market for low and medium-cost homes are investors.
Thor explained that these homes usually enjoy higher price appreciation because of the government subsidy.
This attracts investors, and at times they are prepared to pay in cash.
Senior research fellow at the Malaysia Institute of Economic Research Shankaran Nambiar, who sees it as a “leak” in the system, pointed out that subsidised housing would eventually benefit the rich rather than the needy citizens.
“The pool of low-cost homes will shrink (if this is allowed to go on),” he told FMT Business.
A check at a property auction company revealed that many low-to-medium-cost properties in Penang, Negeri Sembilan and Kuala Lumpur listed for auction have already been snapped up but the buyers do not fit the B40 profile.
Data from the auctioneer revealed that the purchasers were either those who already have multiple properties or property investment companies that buy to rent out. Many of them are seasoned bidders at auctions.
Even homes that are still under the no-sale moratorium, some of which come under Rumahwip and Rumah Selangorku low-cost housing schemes, are also up for sale.
In a written reply to FMT Business, Selangor Housing and Real Estate Board executive director Juhari Ahmad said there are no restrictions or conditions for the sale of such properties at public auctions.
“Nevertheless, as the agency responsible for monitoring prices, especially in the low-cost segment, we require successful bidders to register and declare that their property has been purchased through public auction when they seek to transfer ownership,” he said.
However, Public Sector Home Financing Board (LPPSA) member Khairudin Abd Hali pointed out to FMT Business that certain conditions must be fulfilled under the Registry of Titles before the ownership of a property listed as “low-cost” can be transferred to another party.
For a transfer to be successful, the new owner must comply with the requirements, such as a combined household income below RM10,000 a month and the buyer should not already own a property.
Khairudin, who is an industry expert and professor at the faculty of built environment at Universiti Malaya, said the government should review the eligibility and policies for low-cost homes.
Under Budget 2022, a total of RM1.5 billion was allocated for low-cost housing, up from RM1.2 billion in Budget 2021.
Thor revealed that data from PropertyGuru shows that only one in five purchasers of low-to-medium-cost homes can afford to upgrade to private housing, and in areas such as Petaling, Kuala Lumpur and Hulu Langat, their only option is a low-cost flat.
This raises the concern with regards to the fate of buyers whose homes have hit the auction market as a result of foreclosures. The auctioneer’s data shows that a large number of these homes had been funded under the LPPSA scheme.