THE MALAYSIAN INSIGHT. 2ND JUNE: Developers are currently facing various challenges due to Malaysia’s affordable housing requirement, which must be met in order to build residential developments on the open market, said the Real Estate and Housing Developers’ Association (Rehda) president NK Tong.
Many of these concerns arise from cross-subsidy policies to which developers must adhere, where open-market property prices are increased so developers can build inexpensive houses frequently sold below construction cost, he said.
To make housing more affordable for the people, Tong said the government should be fully responsible for the delivery of affordable housing like it was over 50 years ago and as it is in many countries.
“This would eliminate the current cross-subsidies that raise prices of regularly priced housing, making it more expensive for the M40 group to afford homes,” he said in a statement following Prime Minister Anwar Ibrahim’s call yesterday for a review of the current policy on affordable housing.
Tong said price hikes in the open housing markets have contributed to developments’ failure to attract buyers.
“This rings especially true for projects being developed by small and medium enterprise developers without the fiscal means to cushion themselves against financial challenges, which is one of the reasons Rehda has asked the government to take back the onus to build affordable housing,” he said.
Tong said an unintended consequence of more expensive regular housing is the rise of complete but unsold properties, often referred to incorrectly as “overhang”.
“We are cognisant of and grateful for initiatives taken by the government thus far to mitigate pressing concerns in the housing and property industry, such as the recent introduction of ‘Skim Simen Rahmah’ to address price hikes for building materials.