Nearly 70% of the 500,000 affordable homes under the 12MP built

As Malaysia pushes forward on its ambitious affordable housing agenda, the goal of constructing 500,000 affordable housing units under the 12th Malaysia Plan (12MP) is steadily coming within reach. With 346,417 affordable units completed as of June 30, 2024, the country has achieved 69.3% of its target, marking a significant milestone in the drive toward ensuring accessible, affordable housing for all Malaysians.

Housing and Local Government Ministry secretary-general Datuk M Noor Azman Taib attributes this progress to the collaborative efforts of federal housing agencies, state governments and private developers. At the forefront of this initiative is the PR1MA Malaysia Corporation (PR1MA), which has played a pivotal role in delivering these much-needed housing units.

Driving the effort forward

The 12MP affordable housing target represents a broad commitment to social development, addressing a core necessity for Malaysians across economic spectrums. This achievement highlights the impact of partnerships, with government bodies and the private sector working together to address housing needs across the country. In a statement during the launch of the Giga PR1MA Homes event at Bulatan Sultan Azlan Shah on Sept 29, M Noor Azman praised the collective drive and stated: "To foster a prosperous, harmonious and safe community with access to public facilities, the National Affordable Housing Policy aims to provide quality affordable homes nationwide by 2028."

This plan aims not only to deliver affordable housing units but also to contribute to the creation of communities that support quality living, public safety and ample access to facilities. Achieving a balanced property market depends on continued collaboration among all parties involved, including federal and state governments as well as property developers, said M Noor Azman, who is also a PR1MA corporation member.

PR1MA’s role

PR1MA has been instrumental in reaching the 12MP’s housing goals. As of Aug 30, 2024, PR1MA has launched a total of 88 projects across Malaysia, covering 54,137 housing units at various stages of construction. Among these, a remarkable 40,686 units have already been sold, demonstrating the appeal and accessibility of PR1MA’s offerings.

In Perak alone, 15 PR1MA projects have contributed 7,631 residential units, with 679 of these ready for immediate sale. PR1MA’s commitment to making affordable housing attainable for Malaysians has been well-received, with increasing demand for these homes as the program expands.

The Giga PR1MA Homes campaign is a standout initiative, offering 2,785 residential units, including 679 units in the Perak region. The campaign is designed not only to raise awareness of PR1MA’s offerings but also to provide targeted incentives that ease the path to homeownership for Malaysians. Through these campaigns, PR1MA aims to enhance the visibility of its affordable housing projects, making it easier for potential buyers to find a home that fits their needs and budget.

Meeting the demand 

The demand for affordable housing has grown in recent years, spurred by the rising cost of living and economic uncertainties. Affordable housing provides a stable foundation for economic security and personal development, making the 12MP target crucial to Malaysia’s social landscape. The government's focus on creating affordable housing aligns with broader goals of improving the quality of life for Malaysians.

However, building affordable homes at such a scale involves careful coordination, strategic planning and a clear understanding of the housing market. Affordability is only one part of the equation - quality, accessibility to public services and community-centric design are equally important aspects. 

A major problem lies with building the affordable homes at the right places where the demand prevails and not just building cookie-cutter homes in the wrong locations, leading to a massive number of completed but unsold units as the nation has been experiencing.

Ironically, homes priced below RM300,000 that remain part of the overhang dilemma stands at nearly 30% of the total completed but unsold units and are the largest contributors to the overhang. This is followed by houses priced between RM300,000 and RM500,000 as well as  RM500,000 and RM1mil. The smallest contributor to the tally of unsold but completed homes is actually those that are RM1mil and above

Accurate, up-to-date information and relevant data are crucial to ensure that new stocks of affordable homes are built to the specifications and in locations where they are most needed, rather than relocating populations to areas with low demand.

The road ahead

To make affordable housing more accessible, banks could consider several supportive measures. As discussed during the StarProperty Budget 2025 Roundtable, one effective approach would be to provide 100% margin loans, removing the need for a down payment. Additionally, banks could cover interest payments during construction, easing the financial burden on buyers in the early stages. Committing a portion—such as 30%—of their loan portfolios to affordable housing initiatives would also reinforce their dedication to accessible homeownership.

Another impactful strategy could involve financing up to 110% of a property’s value, which would allow buyers to manage extra costs for renovations or furnishings. To keep properties affordable and prevent speculative investments, a ten-year resale moratorium could be implemented to prioritise access for first-time homebuyers.

Banks might also consider step-up financing options, such as those seen in Maybank's HouzKey programme. This type of financing starts with lower monthly payments, increasing gradually as the borrower’s income grows, making homeownership achievable for those with limited initial funds.

Affordable housing remains essential to Malaysia’s economic development as the nation seeks to maintain a positive growth trajectory. With a rising population, a sufficient supply of reasonably priced housing is critical. Ensuring equal access to affordable housing requires a cohesive strategy, ideally through a dedicated government framework backed by private-sector involvement. This joint effort is key to supporting Malaysia’s goal of becoming a developed nation. 

Achieving a balanced property market depends on continued
collaboration among all parties involved, said M Noor Azman.

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