KUALA LUMPUR (Jan 15): Homeownership among Malaysia's middle-income M40 group has fallen below the rate of low-income B40 group, said Rehda Institute chairman Datuk Jeffrey Ng Tiong Lip.

Speaking at the Rehda CEO Series 2026 conference on Thursday, Ng said this shift is due to a development model reliant on cross-subsidisation, which has inflated open-market home prices.

He explained that property developers currently bear most of the burden for delivering price-controlled housing while absorbing project risks, leading to a heavy dependence on cross-subsidisation from higher-priced units.

This practice, he said, has elevated overall market prices, contributing to the growing affordability crisis. B40 households continue to struggle to purchase houses, while M40 homeownership dropped to 75.9%, below the B40 rate of 76.3%.

The cost pressures have strained project viability, contributing to delays, financial stress and, in some cases, abandoned housing projects, Ng added.

Based on Rehda Institute’s past research on abandoned housing projects and affordable housing delivery, Ng said the challenges “are systemic rather than developer-specific, and require coordinated action involving financiers, utility providers and state, local and federal governments”.

“The challenge before us, therefore, should not be viewed narrowly as one of housing affordability alone, but as a question of delivery sustainability and ecosystem resilience. It spans land policy, financing structures, infrastructure and utility provision, compliance costs and approval processes,” he said.

“When any party of this ecosystem carries a disproportionate share of the burden, the system becomes fragile — resulting in delays, financial strain and ultimately, abandoned projects.

 In this context, Ng said the financial sector must play a more proactive role, not only as a lender, but as a partner in delivery. This includes preferential financing for first-time homebuyers, more flexible pricing of risk through longer tenures or income-responsive repayment structures and targeted risk-sharing mechanisms supported by policy incentives.

He added that utility providers should also be part of the solution by adopting more equitable cost-sharing arrangements for infrastructure provision.

“State and local governments also play a decisive role, particularly by streamlining approvals and accelerating speed to market. With coordinated action between the Ministry, Bank Negara Malaysia, state and local governments, banks, utility companies and developers, the entire development ecosystem becomes more resilient and outcomes improve for the economy as a whole,” he added.

Separately, Ng said the industry is seeking a review of the proposed increase in stamp duty on foreign home purchases to 8% from 4%, as announced by the government in Budget 2026.

Ng said foreign buyers, including participants under the Malaysia My Second Home (MM2H) programme, account for about 0.5% of total property transactions and are largely concentrated in the high-end segment, posing no competition to local buyers.

However, he added that such purchases generate spillover effects for the economy, supporting employment and local consumption in sectors such as retail, education, healthcare and services.

Ng warned that a sudden doubling of the stamp duty rate could deter investment and undermine Malaysia’s attractiveness to foreign talent and foreign direct investment.

“Therefore, the real estate fraternity respectfully proposes either maintaining the stamp duty at its previous rate of 4% or considering a moderate and gradual increase in stages,” he said.

“This balanced approach would encourage long-term international families to invest here, put their children in local schools and contribute significant spending to our economy, without impacting local homeownership,” he added.