FREE MALAYSIA TODAY. 9TH FEBRUARY: Malaysia will find it difficult to emulate Singapore in ensuring affordable housing for all, according to a property expert.
The director of property consultant Rahim & Co’s Petaling Jaya office, Choy Yue Kwong, said the challenge centred around the administrative process.
Unlike Singapore, Choy said, there are too many authorities that have a hand in deciding on affordable housing matters in Malaysia.
“It can get a bit confusing that way,” he said at a press conference where the consulting firm’s property market review for 2022/2023 was unveiled.
Nga said his ministry would also look at case studies for best practices on housing policies in other countries that have been successul in providing their people with affordable homes.
Choy pointed out that Singapore has a central body to oversee everything on public and affordable housing.
“The HDB also does everything in-house, from land purchase, planning and design to construction and maintenance, making it very efficient,” he said.
“While we have a ministry of housing, it is there only to offer advice to the states. On the other hand, there is only one authority in Singapore which enables them to plan centrally,” he added.
As a result, Rahim said, each state would have to deal with its own housing problem and “this can be difficult”.
On the issue of affordability, the firm’s research director Sulaiman Akmady Saheh said it is still a major problem in Malaysia and this has led to a property overhang in the market despite the fact that property prices are already moderating.
Based on the formula to determine a potential buyer’s financial capability, Sulaiman said affordability continues to be a major issue.
For instance, he said, it could take a person who lives and works in Kuala Lumpur up to 5.9 years of saving every sen of his gross income to pay for a median terrace house. That means not even spending on food for those years, he said.
In Selangor it would take 5.3 years, in Penang 5.4 years and in Johor it is 5.5 years.
Sulaiman said lack of affordability had resulted in an overhang of 29,534 properties in residential zones alone.
“With serviced apartments and small-office-home-office (SoHo), which may come under commercial zones, the total overhang is 55,482 units valued at RM41.57 billion,” he said.
He said high-rise properties account for 18.4% of the overhang, the largest proportion for any category.
The spread in terms of cost per unit is quite even for homes priced between RM300,000 and RM1 million.
“Therefore the assumption that unsold homes are only those that cost RM1 million or more is incorrect,” he said.
To prove his point, Sulaiman revealed that homes that cost below RM300,000 account for 13.9% of the overhang.
However, homes in Malaysia are still among the world’s best value-for-money properties.
For instance, it would take 23 years to pay for a house in Hong Kong based on the affordability formula. It is 15 years in Sydney, 13 years in Melbourne and eight years in London. The index in Singapore is about the same as Malaysia.