KUALA LUMPUR (Aug 8): The Real Estate and Housing Developers’ Association (Rehda) Malaysia has suggested the setting up of a national affordable housing trust where developers contribute a certain percentage of their gross development value to the trust, for a targeted fulfilment of the affordable housing requirement, it said in a statement on Thursday.
This comes on the back of Prime Minister Datuk Seri Anwar Ibrahim announcing that the Kuala Lumpur City Hall (DBKL) has been instructed to incorporate one or two affordable Madani housing blocks in all future housing projects earlier this week.
“The committee of the trust — who could be a combination of the Ministry of Housing and Local Government (KPKT), the state authorities and even some Rehda representatives — can observe and analyse which part of the city or state has high demand for affordable housing, so that the affordable houses can be built strategically where the demand is, but not a flat quota that is not market-driven and causing some areas to be underprovided and other areas, over-provided,” said Rehda Malaysia president Datuk Ho Hon Sang in the statement.
To further assist homebuyers, Rehda has urged other industry players to play their part as well. Ho said that banks, for example, can offer subsidised loans for all affordable housing. “Other incentives, such as discounts in premium charges, development charges and improvement service funds, will also go a long way to make housing more affordable for the rakyat (people),” he added.
He noted that developers have been cross-subsidising the affordable housing units to manage rising costs. “The suggested requirement — whereby a full block or two need to be made into Madani housing, instead of a set percentage — will naturally cause a further increase in the free market prices for those who are not eligible for affordable housing,” cautioned Ho, adding that this includes those in the M40 group, whose income is higher than stated in the eligibility criteria.
He added that the requirement for the Madani units will exacerbate the mismatch of supply and demand, citing the National Property Information Centre’s (Napic) latest report, which states that 28.6% of completed but unsold residential properties in Malaysia in 1Q2024 were priced at below RM300,000, highlighting a mismatch of unsold affordable housing.
“We are committed to provide affordable housing, but the focus should be on the right location, as some areas require more affordable housing units, while some require less due to weak demand in those areas. There should be more targeted solutions rather than a one-shoe-fits-all approach to identifying the needs,” noted Ho.