Property Hunter Magazine September Issue 2014 | Page 96

/// West Malaysia Property News

Property Consultants Urge Local Housing Market to Address Structural Issues
institutions have to step in to release
the land and do joint ventures
with private developers to develop
affordable housing, particularly in
the Klang Valley, Penang and Johor.
The Government can also absorb
some of the infrastructure costs
from the private developers so that
they can sell at lower prices. It will
also help if affordable housing and
housing for the low income group
are built to be rented out as an
alternative to buy.

Structural issues in the local housing
market need to be addressed if the
market is to advance into a more
well-balanced and sustainable one,
property consultants concur.
A double-digit jump in the prices of
houses of between 15% and 20%
in the last two years and a spiraling
cost of living has caused a widening
gap between income level and price
levels, and a resultant mismatch
between disposable income and
house purchase affordability. As a
general rule of thumb, mortgage
repayment should not exceed 28%
of gross monthly income, but for
many house buyers, they have no
choice but to contend with much
higher repayment amount leaving
them with very little disposable
income.
One of the obvious structural issues
is the mismatch in the housing
products being launched that
comprise a higher percentage of
higher priced housing products,
even though the supply of
affordable and medium-priced
housing is still grossly inadequate to
meet the high demand.

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Chartered surveyor and registered
valuer Dr Ernest Cheong says a
holistic solution to ensure a more
equitable and sustainable housing
market for Malaysians is certainly in
order.
“The only holistic approach to the
provision (or lack of provision) of
affordable housing in the form
of low-cost and medium-cost
houses is for the Federal and
state governments to assume the
role and responsibility to perform
their rightful public duty and
responsibility of providing for these
housing units. They have at their
disposal land reserves and the
financial resources to implement
the mammoth task of providing
affordable housing to the millions of
Malaysians who need F