Lagenda’s recent joint-venture will be an affordable township.

Affordable home ownership in Malaysia is becoming increasingly unaffordable despite efforts by public and private developers. While the full stamp duty exemption on first residential homes below RM500,000 as well as the approval for the construction of 67,944 affordable units in the Federal Territories is to help bridge the gap, it also reflects home buyers' demand.

There are also many obstacles with higher interest rates, and material and commodity costs hampering the ability to increase supply. Moreover, many upper B40 and the M40 groups who do not qualify for government housing schemes are forced into an increasingly expensive private market.

The average property price has increased by 99.3% since 2010, with 51% of Malaysians unable to afford a home according to the National Property Information Centre, made worse by the pandemic.

While private developers have supported the strategies put forth by the Wawasan Kemakmuran Bersama 2030 aspiration to provide greater access to adequate, safe housing, this talk has yet to turn into action.

Out of 117,766 new housing units built in 2020, only 12% were low-cost, failing to meet the National Affordable Housing Council’s annual target of 100,000 low-cost housing units. 

According to Lagenda Properties, most houses built under affordable home schemes are unaffordable. The developer reported that the B40 maximum affordability in Malaysia is RM230,000, while the average home price is more than RM380,000​, indicating a huge price mismatch between affordability and home prices for this group.

These findings are supported by the National Housing Department, which reported that just one in five houses approved for construction in the last five years was priced below the government’s affordable housing price ceiling of RM300,000. 

The disparity in housing cost versus income is primarily because developers face shrinking margins given the rising costs of building, land and compliance, as well as inflation and labour shortage.

To increase construction cost efficiency, Lagenda Properties has been improving the efficiency and productivity of its construction segment by harnessing technologies such as the industrialised building system (IBS).

The developer is also collaborating with government sectors to implement solutions for sustainable, liveable and affordable housing. 

“We are currently exploring collaborations with various state-owned companies, enabling them to participate in the supply of affordable privately developed homes. For example, our most recent joint venture with Kumpulan Hartanah Selangor Bhd (KHSB) will allow us to develop underutilised land owned by the state government into an affordable township with over 2,000 units of affordable landed homes that are priced at below RM250,000,” Lagenda Properties managing director Datuk Jimmy Doh said. 

The developer reverse engineers home pricing based on construction cost and average household income in the states where its townships cater to B40 and M40 income groups. 

Housing units in these townships do not exceed RM250,000 for single-storey terrace houses as per guidelines established in the National Affordable Housing Policy in 2019, emphasizing a holistic quality of life with multiple facilities and green spaces. 

“At Lagenda, our vision is for every Malaysian to own a home. Toward that goal and in support of the government’s affordable housing campaign, we understand that our core operating principles must align with social responsibility. We strongly believe in empowering every Malaysian family to own a home regardless of income level and this social cause is what drives us as a Group,”

“From a macro perspective, homeowners are the cornerstone of community building, they are economic drivers in an area, and homes are a constantly appreciating retirement plan. Home affordability is important because all other overarching nation-building efforts are built on this foundation of homeownership and putting down roots in a community,” Doh added.

Stay ahead of the crowd and enjoy fresh insights on real estate, property development, and lifestyle trends when you subscribe to our newsletter and follow us on social media.