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What is Your Definition of Affordability?
People’s Perception of
Affordable Housing
Due to the exponential price
expansion of the residential
property market in Malaysia, the
words “affordable housing” have
taken on new meaning. There
are also people who are stuck in
the middle-income trap who do
not qualify for low-cost housing
and yet, can’t afford to purchase
even “medium-cost” residential
projects.
In order to understand the
sentiments of the market,
an online survey has been
conducted to gauge the public’s
perception on this issue using
both quantitative and qualitative
methods.
According to answers obtained
from 104 respondents, 46% of
them have defined affordable
housing as being priced from
RM200,000 to RM400,00 per
unit.
From this figure, 35% rated
affordable housing as those
priced below RM200,000 per
unit while 13% thought that
affordable housing are those
priced below RM200,000 per
unit.
Only 6% of those who
participated in the survey
thought homes priced
RM400,000 to RM600,000 per
unit were within the affordable
range.
In terms of whether there
is a shortage of affordable
housing in Malaysia, a total of
89% respondents agreed that
the problem exists while 11%
thought otherwise.
According to 82% of the
respondents, the basic criterion
which affordable housing must
fulfill is being situated within
close proximity to work and
school.
61% are of the opinion that the
availability of amenities is a must
while 58% listed accessibility
to public transportation as an
important criterion.
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One noteworthy comment
came from a respondent who
cited “comfort, design and
a wellmaintained building”
as among the other criteria
he would like to see in an
affordable housing project.
In relation to the 1Malaysia
People’s Housing Programme
(PR1MA), 57% are aware of the
affordable housing initiative,
while 43% are not familiar with
it.
The most common challenges
house hunters face are steep
prices, inconvenient and unsafe
locations, as well as difficulty in
getting a loan.
Affordable Homes
It is likely that more Sabahans
are not able to afford to buy
houses with the 6% increase of
the Government Services Tax
(GST) this year. Despite about
50,000 units of affordable
homes believed planned for
Sabah in five years, more
Sabahans may not be eligible for
housing loans.
Naturally, with the introduction
of the GST, property prices will
go up and are expected to slow
down due to uncertainties in
the bank borrowing policies.
Demand for properties will
continue to increase but
loan approvals is expected to
dampen.
Income Growth Not InTandem with House Prices
According to Urban Wellbeing
and Local Government Minister
Dato’ Abdul Rahman Dahlan, it
will be hard for those earning a
monthly salary of RM5,000 and
below to obtain homes. Based
on the current loan repayment
requirement and the base
lending rate (BLR) of 6.6% this
group of households can only
afford houses costing less than
RM300,000.
He said, “Using this yardstick
for affordable houses price,
developers should focus their housing
development to cater for the needs of
this 80% of the households. However,
the 2012 NAPIC (National Property
Information Centre Report) states
that only 31.7% of all new housing
units launched were priced below
RM250,000.”
This creates an imbalance between the
demand and supply of houses towards
the right target group in Malaysia as
there exists a serious gap of about 40%
between the provision of affordable
housing below RM300,000 compared
with the demand.
He also lamented about the rising prices
of houses in Malaysia and especially in
his home state Sabah. House prices in
Malaysia and in Sabah too have been
rising too rapidly. As a result of these
rapid price increase, house prices in
Sabah have now become the second
most expensive in Malaysia.
Abdul Rahman said, “Of greater concern
is the fact that income growth has
not been keeping in-tandem with the
increase in house prices. The state
government must play their roles in
provision of affordable housing by
imposing a certain quota for the housing
development.”
He adds: “Currently, most of the state
governments only impose a low-cost
housing quota for housing projects and
in many instances even these are not
strictly enforced. This can done through
systematic registration and having a
specific database to conduct a thorough
demand and supply analysis at the state
level.”
Abdul Rahman, who is also the MP for
Kota Belud, also shared that the average
house price increases in Malaysia have
hovered between 9.96% and 12.3%
annually, while in Sabah the price
increases were 8.05% in 2011 and
13.11% in 2012.
“In Sabah, where there is ample land,
house prices should not be rising at
such a rapid pace,” he said.
Plans for More Affordable Homes
In 2014, three new developments with a