Making affordable housing accessible

  • Business
  • Saturday, 04 Nov 2017

A COUPLE of years ago, a 20-something from Kuching working in Petaling Jaya wanted to buy a property under one of the many affordable housing schemes promoted by the government.

At that time, housing was already beyond the reach of many.

She registered with an agency. Nothing happened after a few months.

“How can I get my hands on a unit?” was her perennial question.

It was frustrating as much for her as for those covering the property sector because there was no single go-to place to seek information. She registered with other agencies, but still, nothing happened.

She soon left for greener pastures and probably, she now earns enough not to have to buy an affordable unit.

Although it is just one person’s experience, affordable units do not seem all that accessible. One hears a lot about them but there is no go-to place as one seeking to buy from a developer.

And yet, according to the National Property Information Centre (Napic), out of 4,589 units within the RM200,000-RM250,000 range, about a third of them – or 1,320 – remain unsold in its report on Property Overhang report as at March 31.

Research by StarBizWeek focused on the RM200,000-RM250,000 range between 10 and 12 agencies in the Klang Valley (KL and Selangor) and five other states.

The research focused on this range because Malaysia’s national median monthly household income at 2016 is RM5,228. At three times the household median annual income, the affordability level would be at RM188,000. The median income level in the Klang Valley would be higher.

Malaysia has more than 10 affordable housing programmes initiated by the federal and state governments.

1Malaysia People’s Housing (PR1MA), Rumah Selangorku, Rumah Mampu Milik Wilayah Persekutuan (RumaWIP) and Syarikat Perumahan Negara provide houses within this price range while Johor’s Mampu Milik begins from less than RM200,000.

Lack of awareness

Real Estate and Housing Developers’ Association (Rehda) says financing, awareness and speed of delivery are issues.

Its president Datuk Seri Fateh Iskandar Mohd Mansor says it is a myth that these houses do not exist.

“There must be better awareness. We know these properties are available throughout the country. We need one authority to provide the big data so people are aware of their availability.”

Iskandar says although financing is an issue, even before that issue can arise, there must be awareness as to who, where, what and how much they cost.

“This information is important because without it, how are people going to know about what is available. So there should be one body looking into this affordable housing segment across the country,” says Fateh Iskandar.

The second myth is that these are not available in the Klang Valley.

Research by StarBizWeek shows that they are – in Kajang, Bukit Jalil, Kepong, Setia Alam, Cheras, Klang and Cyberjaya.

Most of them are located more than 30km away from Kuala Lumpur City Centre – JadeHills@Kajang (31 km), Prima@Bandar Teknologi Kajang (36km), De Bayu@Setia Alam (37km), Prima@Cyberjaya (40km) and Laman Impian@Klang (40km).

There are also units in Ijok and Beranang, both of which are in Selangor.

Several of them are located in highly accessible areas like Residenci KepongMas@Kepong (12km) and Prima@Alam Damai, Cheras (18km), RUMAWIP Tasikmas@Desa Tun Razak (20km).

Despite all these seemingly viable options, there is another issue – pickiness.

Says an industrial source: “Buyers are picky. They want locations like Hartamas, Damansara or city centre area but prices of these units are beyond their affordability.”

Rehda deputy president Datuk Soam Heng Choon says these affordable units must be build where there is demand.

“The focus should be in cities and urban centres and not just everywhere and anywhere across the country,” says Soam, who is also IJM Corp Bhd CEO and MD.

Because developers are mandated to build affordable homes and other forms of social housing, developers may “have trouble selling their own units” which may be competing with the affordable units they are mandated to build.

Therefore, the supply of affordable units must be “carefully planned at the right location”, Soam says.

To a large degree, this explains why some affordable units remain unsold in some states.

Affordable housing priced between RM200,000 and RM250,000 are available in different states. In several states, they exist by the thousands as research show. But it is especially in the Klang Valley that the issue of its availability – or access – is most acute for urban dwellers for several years.

During Budget 2018 on Oct 27, the Government said PR1MA, among the largest affordable housing developer in Malaysia, will be launching 210,000 units below RM250,000.

According to PR1MA’s website, it has about 80 projects nationwide in different stages of development.

The Government said these 210,000 units would be concentrated in areas with strong demand, such as the Greater Kuala Lumpur area, Johor and Penang.

Other than a lack of awareness, financing issues, locating projects in areas which lack demand, yet another reason may be the current system of promoting such units.

According to research by StarBizWeek, registering for some of these housing programmes can be onerous. It involves online registration with the government and with one particular agency, having to read a manual just to register one’s interest.

This means one has to have a computer to gain access. In smaller towns, not everyone has a computer or Internet access.

Unlike buying a unit in the open market, buyers of affordable units are selected by the Government.

Their names are given to developers who then call these potential buyers, a source says.

“Sometimes there is a delay on the Government’s part in the submission of these names.

“If the buyers and developers can deal with each other directly, this will help to speed up the process,” says the source.

“The Government wants to filter them. I don’t know what the criteria are but for one reason or other, some of them do not qualify.

“They may not be able to get the financing or they may already have another house, or the location is unsuitable,” the source said.

The source says although these units will be sold, the “time taken can be lengthy”. Because the margin on affordable units are thin, developers prefer to sell them fast and put the money into more profitable use.

Size and form

About 70% of the affordable houses priced between RM200,000 and RM250,000 are apartments on a national basis, with density of about 300 units to possibly over 2,000 units in a single project.

Prima@Kuala Ketil, Kedah has about 320 units of apartments, likewise Prima@Cyberjaya with 325 units. RumahWIP Tasikmas@Desa Tun Razak, KL has 463 units and Prima@Bukit Katil, Melaka, 527.

Two projects have over 2,000 units, namely Prima@Klebang 1, Melaka with 2,646 units and Prima@Alam Damai, Cheras, 2,074.

Most of these affordable houses have a built-up area of 800 sq ft to 1,000 sq ft. There are some units with a built-up area of slightly less than 700 sq ft and at the larger end, 1,635 sq ft for a double-storey terrace house, depending on location.

Whatever size and form they come in, supplying this segment of housing where they are most needed is critical.

Malaysia is one of the most rapidly urbanising countries in Asia. In tandem with the country’s vast development, the proportion of urban population increased to 74.8% in 2015 (2010: 71%), according to the Economic Report 2017/2018.

Although the aim has of late been to “house as many as quickly as possible,” rapid urbanisation of major cities such as Kuala Lumpur, Penang and Johor Baru are attracting an influx of population.

Various approaches have been suggested to solve the different issues linked to affordability, but ultimately putting supply where there is demand is crucial for a start.

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