THE government should set out guidelines to clearly define the role of the public and private sector in providing affordable housing so that there is no unnecessary competition in providing for the M40 and B40 groups, said Rehda Institute, the research arm of Malaysia’s real estate and housing body.

Rehda Institute chairman Jeffrey Ng said the lack of coordination between the numerous providers of affordable housing from the government and the private sector had led to lack of direction and a shortage of affordable housing.

“There must be a new policy that effectively removes unproductive planning,” Ng said during a media briefing on affordable housing in Petaling Jaya.

Ng suggested the formation of a special purpose central agency under the Housing and Local Government Ministry.

He said this was crucial to redefine the roles of the public and private sectors to provide affordable housing in a holistic manner.

Ng said that the formation of the agency will help the B40 and M40 groups.

“Household debts are getting bigger and more unfocused. There is a shift in unproductive debts to productive debts (residential loans).

“There must be refreshed solutions to address issues of downpayment and financing for the borrowers.

“Newer financing planning to assist the public sector to build more affordable housing is needed,” he said.

According to the institute, in the first quarter of this year the residential overhang stood at 23,599 units and 14,739 units (62.5%) were below RM500.

Ng said that approvals based on quota and price control did not bode well for B40 and M40 groups.

“The government’s responsibility is to lower public land costs and the private sector should deliver affordable homes without price controls.

“In consideration, the private sector should make payment in the form of a special industry contribution to subsidise rental or public housing for B40 groups.”

The institute has found that an average of RM2 billion is spent in the federal budget, but supply is still is an issue.

Ng said that public housing was not sustainable, with an estimated RM120,000 in subsidies per unit for each public housing unit sold.

“The government should build public housing for M40 people within the affordability threshold for each state.

“M40 who cannot buy can opt to rent, and likewise for those who can afford it.”

The institute also found that people in the B40 group cannot afford median prices.

Ng said that according to Bank Negara Malaysia, there is a 23.1% rejection for loan applications.

“There is the inability of buyers to come up with downpayment.

“M40 groups have the ability to service the loans, but do not have the downpayment.

“There should be a lower loan margin with parental support for downpayment and negative gearing incentives for parents who mortgage their assets.  

“Other assistance is stamp duty waivers, reduced legal fees, and subsidised lower mortgage rates.” – July 14, 2018.