Govt measures to meet demand for affordable houses
IN a move to address the increasing demand for affordable housing, the government has implemented the National Housing Policy and established the National Housing Council to provide a high quality and environmentally sustainable housing, while streamlining the delivery system and cultivating a vibrant housing industry.
Several measures were introduced to address the mismatch between demand and supply in the housing market, such as My First Home, MyDeposit, My Home, Youth Home, Housing Credit Guarantee and Employees Provident Fund account 2 withdrawal as well as initiatives to increase the provision of affordable housing through various programmes.
To deter speculative activities, the government has abolished the developer interest bearing scheme, which caused higher house prices as a result of the factoring of the interest absorption by developers during the construction period and factoring it into the house prices.
The build-then-sell concept is encouraged where house buyers are not liable for any losses, should property projects be abandoned during the construction period since the loans are not disbursed.
The Real Property Gains Tax has also been revised upwards for properties less than five years and a maximum loan-to-value ratio of 70 per cent for third houses were imposed to curb speculation.
The overwhelming demand, scarcity of suitable land and escalation of construction material prices remained challenges in ensuring sufficient affordable houses for Malaysians.
The imbalance of growth between house prices and income has affected the affordability of houses, especially among the low- and middleincome earners.
With the median multiple at 4.4, on aggregate, houses in Malaysia were considered as seriously unaffordable, while there had been an uneven pace of growth between house prices and income across key states, said the Economic Report 2016/2017.
The International Housing Affordability Survey stated that an affordable housing market was one with a median multiple of 3.0 and below.
Over the years, demand for houses remained strong underpinned by rising number of households, which increased to 7.4 million last year, compared with 6.6 million in 2010 with a high proportion of young working age population of 25.7 per cent.
Since the affordability is a function of income and prices, many low-income households, especially in the urban areas, are unable to own houses due to low income, coupled with high house prices.
Between 2009 and 2014, average house prices rose at a compounded annual growth rate (CAGR) of 7.9 per cent, exceeding the growth in average household income of 7.3 per cent during the same period.