Renting Needs More Supply of Affordable Homes
Long-term rental is among the solutions proposed to address Malaysia's limited supply of affordable homes. However, an expert revealed that this requires an adequate number of existing properties being leased at low prices.
To establish a stable long-term rental market, there should be a sufficient inventory of genuinely low-cost flats, said Dr Suraya Ismail, a research director at Khazanah Research Institute who specialises in housing.
Another requisite is for developers to build homes at a faster rate to ensure there is enough pipeline to meet to high demand and prevent rent from sharply rising.
Under the eleventh Malaysian Plan, the authorities estimate that the country requires a minimum of 130,000 affordable homes per year. However, developers only launched 60,000 flats on average per annum over the past five years. These companies also opt to build high-end properties due to their larger profit margins.
Another requirement for a stable long-term rental market is rules and regulations that protect tenant's rights and ensure that the rental rates are within the means of the masses. For instance, rental increases in Germany are limited to three percent per year and is based on inflation.
But even if rental prices are capped, lax enforcement remains a major issue in Malaysia. One area that requires stringent implementation is the rental ceiling for a state's PPR flats that are intended for poor families.
Loopholes should also be plugged and the Malaysian Anti-Corruption Commission (MACC) should act on politically-connected individuals who are allowed by many low-cost flats for leasing purposes.
Furthermore, there should be a shift in the mindset of Malaysians, who are often embarrassed when renting, said Kelana Jaya's MP Wong Chen.
"Culturally, Malaysians don't have the concept of renting. In Germany or Europe, there is no shame in renting. In fact, it is highly encouraged because, in most of the European countries, the houses in the city centres are owned by the government" he explained.
"There is a social stigmaâ€¦ so we need to first overcome this problem" added Wong.