Rush to deliver affordable homes can lead to glut

Have one agency to oversee the project and serve as a powerful regulatory body, says economist

By IZZAT RATNA / Pic By MUHD AMIN NAHARUL

The affordable housing schemes run by government agencies are creating an uneven playing eld for private developers due to possible surplus for low-to-medium products in the property market.

Real Estate and Housing Developers’ Association (Rehda) Malaysia chairman and past president Datuk Jeffrey Ng Tiong Lip said ever since the economic downturn in 2014, key sectors of the economy — specifically real estate — are finding it hard to regain their footing in the industry. Though the government has helped in filling the gap for affordable homes, it has also created a possible glut.

“Because private developers are shifting their focus from the high-end property market to the affordable housing market due to the current economy, they are finding it hard to compete with the government-run projects,” he told reporters at the Rehda Institute CEO Series 2017 conference in Kuala Lumpur yesterday.

Ng said in order to avoid a catastrophic phenomenon once the units are eventually rolled-out, the government should not be fighting with the private sector within the affordable housing market.

“They should in fact take on the role of incentive facilitator and provider — and help the market grow, as well as bring in more investments. For now, the private sector is having a tough time competing with the government housing schemes such as PR1MA (1Malaysia Housing Programme) homes, given that they are offering extensive pricing subsidies.

“An unhealthy operating environment might surface and cause a disruption in the market once products from the private sector starts to flood the market,” he said.

Alliance Bank Malaysia Bhd chief economist Manokaran Mottain pointed out that in an effort to boost the country’s home ownership level, a single agency is more than enough to govern the entire national affordable housing agenda.

He explained that by having too many agencies in charge of the various housing schemes available, it will further dampen the national agenda.

“Have one agency to oversee the project and make sure that completion of the development is within the stipulated time- frame and can serve as a more powerful regulatory body, rather than having so many smaller ones operating in different management and schemes.

“I am proposing a name for this, which is the Malaysian Affordable Housing Agency — a replica of the Housing and Development Board of Singapore,” Manokaran said.

Leading industry practitioners and analysts for the overall Malaysian economy — along with key sectors such as construction, real estate and property development — addressed the economic outlook for 2018 at the CEO Series (Annual Regional Property Development Conference) organised by the Rehda Institute yesterday.

Among the affordable housing schemes offered by the government are the PR1MA, Rumah Wilayah Persekutuan or Rumawip, the People’s Housing Project or PPR, the Youth Transit Home scheme, the MyHome and also MyDeposit programmes.

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