MALAYSIAKINI. 13TH JULY: The housing market in Malaysia is a key sector of the economy, contributing to economic growth and providing housing for millions of people.
According to the National Property Information Centre (NAPIC), the total value of residential property transactions in Malaysia was RM141.98 billion in 2019, up from RM133.27 billion in 2018. However, the impact of the Covid-19 pandemic on the housing market in 2020 and beyond remains to be seen.
Economic conditions are a major factor that can influence the housing market in Malaysia. In recent years, the Malaysian economy has been relatively strong, with GDP growth of 4.3 percent in 2019.
However, the Covid-19 pandemic has caused significant disruptions and uncertainty. In 2023, the economy may continue to recover, but there may be lingering effects of the pandemic, such as high unemployment rates and reduced consumer confidence.
These factors could impact the demand for housing, as people may be more hesitant to purchase homes or take on mortgage debt in uncertain economic times.
Government policies are also important in shaping the housing market in Malaysia. The Malaysian government has implemented various policies in recent years to support the housing market, including the provision of affordable housing and incentives for homebuyers.
In 2023, the government may continue to implement policies that impact the housing market, such as changes in interest rates, mortgage policies, and tax incentives. These policies can influence the demand for housing and affect the affordability of homes for potential buyers.
Demographic trends are another important factor that can influence the housing market in Malaysia. The country’s population is expected to continue growing, and there may be an increasing demand for housing from younger generations who are entering the workforce and forming households.
At the same time, Malaysia’s ageing population may lead to increased demand for retirement homes and assisted living facilities. These demographic trends could influence the types of homes that are in demand and the prices of different types of properties.
Supply and demand factors are also significant issues in the Malaysian housing market. In recent years, there has been a shortage of affordable housing, particularly in urban areas. This has led to higher prices and increased demand for rental properties.
According to NAPIC, the number of unsold residential properties in Malaysia increased from 30,115 units in the fourth quarter of 2019 to 31,661 units in the first quarter of 2020. This could indicate a potential oversupply in the market. In 2023, the demand for housing is likely to remain strong, while the supply of affordable housing may not keep up, which could further drive up prices.
While the future of the housing market is uncertain, it is clear that economic conditions, government policies, demographic trends, and supply and demand factors will continue to shape the market in 2023 and beyond.
The Malaysian government has recognised the need to increase the supply of affordable housing to meet the growing demand from younger generations.
In recent years, the government has introduced several policies and initiatives to address the shortage of affordable housing, including the 1Malaysia People’s Housing Programme (PR1MA), which aims to build 500,000 affordable homes by 2022.
However, more needs to be done to ensure that affordable housing is accessible to all. One issue is the location of affordable housing. In many cases, affordable housing is located in areas that are far from urban centres and lacks basic infrastructure such as public transportation, schools, and hospitals. This makes it difficult for residents to access basic services and employment opportunities.
Affordable housing
The government may need to consider policies that encourage the development of affordable housing in more central locations that are well-connected to urban centres.
Another issue is the financing of affordable housing. Many Malaysians may find it difficult to obtain financing to purchase a home, particularly in the current economic climate.
The government may need to consider policies that provide greater access to financing for low-income households, such as subsidies, grants, or low-interest loans. The government could also encourage private developers to offer financing packages that are tailored to the needs of low-income households.
Finally, the government may need to consider policies that encourage the development of innovative housing solutions, such as micro-apartments, co-living spaces, and shared housing arrangements. These solutions can help to increase the supply of affordable housing and provide more flexible and affordable living options for younger generations who are entering the workforce and forming households.
Overall, increasing the supply of affordable housing is a complex challenge that requires a multi-faceted approach. The government needs to work closely with private developers, financial institutions, and local communities to ensure that affordable housing is accessible and sustainable.
By implementing policies that address the various challenges facing the housing market, the government can help to ensure that all Malaysians have access to safe, affordable, and sustainable housing.