Nga (fifth from left) launched the report while (from left) Teo, Iskandar, Chen, Ng, Tong, Ho, Chui Ping, Seing Liong and Mustaza each posed with a copy.

PETALING JAYA: The planning guidelines for housing development should not be uniform but instead be tailored to the demography of the area, necessitating a different approach to understanding housing affordability, population figures and household sizes, according to Rehda Institute. 

Rehda Institute is the training, education and research arm of the Real Estate and Housing Developers’ Association (Rehda).

In the unveiling of the Affordable Housing II: Closing The Gap: A Strategic Approach to Balancing Supply and Demand conference, Rehda Institute research and education director Malati Thevendran said the issue of housing affordability may have been distorted by incorrect benchmarks and the overlooking of changing demographic profiles. 

Comparing the analysis of the prevalent approaches of median multiple, and housing cost burden with the residual income approach, Malati said the median approach paints a picture where only 14% of urban households can afford a house, vis-à-vis 39.6% using the residual income approach. 

“As a measure, the median multiple is too conservative. We strongly believe that it could be the root cause of distorting the market because policymakers would (direct) more (lower-priced housing) to be built, causing imbalances between supply and demand,” she said, adding that policymakers should look for the most optimum measure, have closer collaboration between departments and go to the ground to have a deeper understanding of the situation. 

The report also found that there has been a decrease in the number of lower-income households, suggesting a possibility of oversupply in the affordable housing segment as there continues to be a high number of unsold properties in the price category of RM300,000 and below.

Malati also added that the number of completed and unsold properties by the National Property Information Centre (Napic), conventionally termed as overhang properties, also do not include social housing and government quarters. 

“Demographic and economic factors are changing. As such policies need to be formulated in line with the local demand. Most importantly, there is no one-size-fit-all in terms of locations,” she said.

Citing the blanket requirement for developers to provide affordable housing, Malati said that the developers end up targeting the same market even though there may not be enough demand for the housing, as well as having to resort to the practice of cross-subsidizing which resulted in open market units that are priced higher. 

“Our surveys indicated that there are many developers whose corporate mission is to provide housing of less than RM500,000. Let them be incentivized to deliver their mission. At the same time, developers who are more focused on the masses and branded products should not be imposed with (providing affordable housing). All developers should be operating in a free-market environment to achieve an equilibrium,” she said.   

Chairman Datuk Jeffrey Ng Tiong Lip said that Rehda Institute will kickstart the engagement process with policy makers and state authorities over the report recommendations including policy change. 

The report is an extension of the first Affordable Housing report published in 2018, where the latest iteration addresses the key issues at a more micro and quantitative level, with research collaboration from Universiti Utara Malaysia and Bank Pembangunan Malaysia Bhd. 

Launched by the Housing and Local Government Minister Nga Kor Ming, he said in his keynote address that the government was in the midst of defining different affordable price thresholds for different states and localities in the country.

“It will be a more scientific guide based on statistics and data. Previously under the National Housing Policy 1.0, the overall definition of affordable housing was not more than RM300,000.

“But the price of affordable homes in Kelantan, for example, and Kuala Lumpur was measured on the same threshold of RM300,000 which doesn’t make sense,” he said.

“As such, we are prepared to come up with a more realistic definition of affordable housing according to each region – for example the Klang Valley or the east coast region,” he added.

Also present were board of trustees members Tan Sri Teo Chiang Kok, Datuk Seri Iskandar, Tan Sri Eddy Chen, Datuk Ng Seing Liong and Datuk Haji Mustaza, Rehda president Datuk NK Tong, deputy president Datuk Ho Hon Sang and secretary general Teo Chui Ping.

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