The Real Estate and Housing Developers’ Association (REHDA) Malaysia has raised concerns regarding the government’s new policy requiring housing developers to allocate entire blocks for affordable “Madani” housing units. This move could inadvertently drive up prices for free market housing and impact those ineligibles for affordable housing.
The existing requirements vary across states, with Kuala Lumpur mandating that 20% of housing developments above five acres include Madani housing. The selling prices of these units’ range between RM150,000 to RM200,000, and the sizes are set at 700 square feet (sq ft), 750 sqft, and 800 sqft. Developers often rely on a cross-subsidy method to balance the costs of affordable housing. This practice keeps affordable housing prices below construction costs.
Source: https://www.wikiimpact.com
The suggested requirement of a full block or two need to be made into Madani housing instead of a set percentage, will naturally cause a further increase in the free market prices for those who are not eligible for affordable housing. This increase could impact middle-income groups, such as the M40, who do not meet the eligibility criteria for affordable housing.
Highlighting a supply and demand mismatch in the affordable housing market, a recent report from the National Property Information Centre (Napic), found that 28.6% of completed but unsold residential properties in Malaysia during the first quarter of 2024 were priced below RM300,000.
The association has called for the establishment of a national affordable housing trust, where developers would contribute a percentage of their gross development value (GDV) to the fund. This trust would be managed by a committee comprising representatives from the Housing and Local Government Ministry (KPKT), state authorities, and REHDA. The Government has yet to respond.
Many Government policies address an immediate issue, without a holistic approach to the problem. Housing is an issue for B40 or M40. It is time for the Federal Government to work with State Governments in sorting this out. And, why can’t the Government hear out suggestions from stakeholders?
Reference:
Madani housing policy could hike price for M40 and above, REHDA warns, Eynez Syazmeena, Focus Malaysia, 8 August 2024
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