1Malaysia People’s Housing Programme (PR1MA) should stick to its objective of providing affordable homes to middle- and low-income earners, instead of jumping on the high-end property bandwagon, said property expert Ernest Cheong. 

Although PR1MA homes range between RM100,000 and RM400,000, the ones priced above RM250,000 are beyond what many Malaysians can afford, said the chartered property surveyor.

“They just have to accept that people’s salaries are stagnant. Those who can afford to buy anything today are those who have an income of RM10,000 and above.

“After all their expenses, they may be able to save RM1,000, and with that they can only get a RM200,000 loan.

“The reality is they can’t afford anything above RM250,000,” he told The Malaysian Insight.

The issue came up recently in the Dewan Rakyat, when Kinabatangan MP Bung Mokhtar claimed that Perbadanan PR1MA Malaysia, a government body tasked with building affordable homes, was selling houses that were unaffordable to many Malaysians.

Federal Territories Minister Tengku Adnan Tengku Mansor said it was not true as PR1MA had also built cheaper houses for the public. 

“I disagree as we have approved more than 70,000 units to be built for sale at a starting price of RM188,000, and up to RM300,000. We have had programmes, such as in Desa Pandan which was redeveloped and sold for RM42,000, too,” said the minister.

A check on PR1MA’s website showed 31 projects that are “Re-open Limited Units” and 18 other projects that are “Open for application”.

Fifteen of the “Re-open limited units” projects offered houses priced between RM100,000 and RM200,000, nine projects offered houses priced between RM201,000 and RM250,000, and seven projects that offered houses between RM251,000 and RM300,000.

For the projects that are “Open for application”, only the Changlun project in Kedah offered prices starting from RM187,000, while six projects elsewhere offered houses priced between RM201,000 and RM250,000 and another six projects offered houses priced between RM251,000 and RM300,000.

The house prices for the remaining five projects have yet to be announced.

The Malaysian Insight has written to PR1MA to seek figures on the number of houses it has built and the different price options.

PR1MA is planning to build more units next year, and has already obtained approval to build 259,881 houses. So far, it has completed 10,199 units nationwide and aims to build 17,000 more houses by year-end.

Budget 2018 allocated RM2.2 billion for housing, of which RM1.5 billion is for PR1MA to build over two years 210,000 units priced RM250,000 and below per unit.

The budget will also be used for 17,300 units under the People’s Housing Programme (PPR), 3,000 units of People’s Friendly Home under Syarikat Perumahan Nasional Bhd (SPNB).

As of November 15, 12,640 PR1MA houses with a gross development value of RM3.16 billion had been taken up.

This figure makes up about half of the 25,132 units of PR1MA houses that are open for sale at the moment, PR1MA said.

Based on the Employees’ Provident Fund’s (EPF) statement last year that 89% of the working population earned less than RM5,000, Cheong said most Malaysians had enough only for living expenses and no surplus for buying property.

“Those earning RM5,000 two years ago could save RM1,000, but today they can only save a few hundred ringgit.

“Malaysians are being squeezed for money to live,” he said, adding that the problem of price and income mismatch did not happen overnight as the economy had been stagnating for the past 10 years.

“When banks look at your salary of RM5,000, they know that you can’t even survive on that if you have a big family. So, how are they going to lend you?

“A RM250,000 house is the maximum that 95% of Malaysians can afford to buy,” he said.

Only qualified for a joint loan

Siti Mat Isa, 32, said she could only afford her first home, a RM290,000 serviced apartment, measuring 800 sq ft in Setia Alam, Shah Alam, after working for eight years.

“I had some savings when I first started working but I disciplined myself to save RM500 every month since 2013. 

“But some of the savings were used when I got married in 2015. So we had to rely on our EPF Account 2 and the remaining savings that I got to pay for the 10% down payment.”

She said it took the couple six months to look for a house that was within their means, as anything above RM300,000 was beyond their reach. Their joint income is around RM6,000 a month. 

“The location of my house is quite okay, it’s just 22km from our offices in Shah Alam.

“But what’s more important is we bought something that we could afford. Now, we only pay RM1,300 a month, unlike the RM1,800 that we would have had to fork out if we bought a house that was priced above RM300,000.

“We won’t have any savings if we spend almost RM2,000 a month on the instalments alone. The amount that we pay is still within our means and we can have some savings for our family,” she said.

When Siti first started working in 2009, she earned around RM1,500, but now her salary is around RM3,500. 

“When I did my research, the bank told me that we would only qualify if we took a joint loan. 

“If I used only my salary, I could still purchase a RM290,000 house but I could not have any other commitments, which is impossible,” the executive said. 

“We are not really picky on whether it’s landed or an apartment, so long as it’s below RM300,000.”

She added that she did register with PR1MA but the location of PR1MA homes and its prices were not realistic, especially for those who worked in the city. 

“Most of the PR1MA apartments are high density, something that I don’t like. My current apartment is only 11 storeys high. 

Price and income mismatch

A Special PR1MA End Financing (SPEF) scheme was introduced in January for buyers to gain access to a higher loan amount. To date, only 50 applications under the scheme have been approved. A total of 197 applications were made for RM44.1 million in loans.

National House Buyers Association (HBA) honorary secretary-general Chang Kim Loong said the main reason why people cannot afford to buy homes is because there is a mismatch between the prices of new launches and what Malaysians can afford. 

He said that based on Bank Negara Malaysia ’s (BNM) latest report, for 2016 to Q1-2017, only 21% of new launches were for houses priced below RM250,000. 

“HBA had previously classified affordable properties as those priced between RM150,000 and RM300,000, but REHDA (Real Estate and Housing Developers’ Association Malaysia) considers affordable properties as costing up to RM500,000,” he said.

Bank Negara’s Housing Watch estimates 57.6% of households in Malaysia earning up to RM5,999 a month can only afford a home costing RM354,111.

A family earning RM1,999 and less can afford a house priced between RM112,200 and RM124,700. 

Chang said that according to the BNM report the biggest issue was that house prices had increased too rapidly in recent years. – November 23, 2017.