The Penang chapter of the Real Estate and Housing Developers’ Association (Rehda) has proposed that the government partners with developers in joint-venture efforts to build affordable homes at the new ceiling price of RM300,000.
Penang Rehda chairman Datuk Toh Chin Leong said such a move could entice developers to meet the market demand for affordable housing.
“If the location is good where there are amenities and infrastructure, then the land may be expensive,” Toh said when contacted.
“This would result in developers having to subsidise (the project meant for affordable homes).
“It would also result in the developers’ profit margins to be slim, unless the government partners with the developers. Then, the ceiling price would be acceptable.”
He was responding to Housing and Local Government Minister Zuraida Kamaruddin’s announcement on Monday that prices of houses, whether built by the federal, state, or private sector, would be fixed between RM90,000 and RM300,000, depending on the location and the average income of the local community.
Toh viewed positively the government’s initiative on the National Home Ownership campaign as it would help developers to clear unsold houses.
Zuraida said the ministry would help to promote RM22.5 billion worth of unsold homes, mostly priced below RM300,000, at a property exposition in March. It will feature more than 30,000 homes.
Toh also applauded the launching of Bank Negara Malaysia’s (BNM) Fund for Affordable Homes. The fund is available for two years starting Jan 2, 2019 or until the RM1 billion revolving fund is fully utilised.
The participating financial institutions are Ambank, Bank Simpanan Nasional, CIMB Bank, Maybank and RHB Bank.
Last year, Bank Negara Malaysia had reportedly disputed Rehda’s definition of affordable housing by saying that homes priced at RM300,000 and above cannot be called “affordable.”
“Houses in the price range of RM300,000 to RM500,000 are beyond what is affordable to the households earning the median income in Malaysia,” the central bank said.
It noted that based on international standards of using the Housing Cost Burden approach, an affordable home’s maximum price stands at around RM282,000.
This comes as the median household income in 2016 was RM5,228, as showed by the Household Income and Expenditure Survey by the Department of Statistics.
According to Bank Negara, there was a mismatch between the profiles of demand by households and new housing supply.