Ahead of the Budget 2024 announcement, PropertyGuru Malaysia, Malaysia’s leading property marketplace, would like to share key priorities for the government’s consideration aimed at spurring the property sector.

As Malaysia stands at a critical juncture in its economic recovery, it is essential that the government look beyond property prices and adopt targeted measures to alleviate the cost-of-living challenges faced by everyday Malaysians. This would align with the government’s MADANI Economy Framework, which aims to elevate the quality of life for all.

Addressing the Cost of Living and Consumer Income

The recent PropertyGuru Malaysia Property Market Report (MPMR) Q3 2023 highlighted resistance from potential homebuyers towards rising property prices, causing a 10.2% quarter-on-quarter dip in property inquiries in Q2 2023. In fact, property enquiries have been on a decline since Q2 2022. This tells us that aspiring homebuyers are being priced out of the market. In other words, the current homes on sale do not match their budget.  

Property affordability remains top of mind for Malaysians, with 87% of respondents from the PropertyGuru Malaysia Consumer Sentiment Study (CSS) H2 2023 identifying property prices as the biggest barrier to their buying ambitions. Amid this, stagnant wages and rising living expenses remain as significant bottlenecks to homeownership. This underscores the importance of a balanced property market where prices align with income growth and costs of living.

In light of the abovementioned trends, it is critical that the government strategically tackles not only property prices but the broader challenges related to the cost of living and stagnant consumer incomes. To address this, the government can consider implementing homeownership initiatives that provide financial assistance for homebuyers, similar to the successful Home Ownership Campaign (HOC), and initiate measures to spur income growth to make homeownership more attainable for a broader demographic.

Notably, the CSS H2 2023 also revealed that 45% of the respondents are struggling to secure financing for affordable housing schemes, which raises the question – are our affordable homes actually affordable? This entails a comprehensive reevaluation of existing housing schemes in relation to consumer incomes to ensure its accessibility to Malaysians, and creating greater incentives for developers to develop affordable housing in light of rising construction and labour costs.

Ensuring Quality in Affordable Housing Projects

We applaud the government's dedication to building affordable homes, a critical step in stabilising the property market. The Madani Inclusive Housing pilot project, which aims to develop 800 affordable homes for people from various income brackets in major cities, is a welcomed initiative that will benefit the rakyat while accommodating the housing needs of different target groups.

With the OPR rates kept at 3% and inflation easing, we are hopeful that an uptick in demand is on the horizon. To further stimulate demand, it is imperative that housing programs align with potential buyers' diverse preferences and needs. According to CSS H2 2023, consumer decisions are influenced by more than pricing and unit specifications to encompass location and livability. Notably, 38% of respondents voiced the need for more attractive home choices within the affordable housing segment.

It is essential that these homes are well-constructed and seamlessly integrated into townships with access to groceries, schools, health facilities and public transportation. This would significantly enhance their attractiveness to potential buyers, especially in budding hotspots like Cheras and Johor, which have seen a surge in inquiries due to its well-connected and mature township.

Data Transparency for Informed Decision Making

As we look towards the recovery of the property sector, we encourage the government to recognise the potential of digitalisation to empower decision-making for policy-makers and consumers alike. In addition to simplifying affordable housing scheme applications, this will also facilitate better data management for informed, real-time decision-making. The former could help ensure that the right groups of consumers are receiving the necessary housing incentives. Moreover, centralised data points can equip developers with critical insights, enabling them to respond efficiently to market dynamics and trends. This underlines our continuous effort to provide transparent insights through MPMR and CSS and underscores the importance of data-driven decisions in the property sector.

Looking forward, we remain optimistic that the Madani Economy Initiative will usher in policies ensuring better access to property and fostering a more inclusive housing market. As part of Budget 2024, we anticipate detailed strategies that restore confidence in public housing programs aligned with the National Housing Policy.

As we keenly await the Budget announcement on 13 October, we reaffirm our commitment to collaborating with the government, providing data-driven insights to facilitate Malaysia's recovery and cultivate a vibrant and inclusive property market for all Malaysians.