KUALA LUMPUR: Developers are currently facing various challenges due to Malaysia’s affordable housing requirement, which must be met in order to build residential developments on the open market, said the Real Estate and Housing Developers’ Association (Rehda) president Datuk NK Tong.
Many of these concerns arise from the cross-subsidy policies that developers must implement, in which open-market property prices must be increased so that developers can create inexpensive housing, which is frequently sold below the cost of construction, he said.
To make housing more affordable for the people, Tong said that the government should be fully responsible for the delivery of affordable housing, as it was over 50 years ago, and as it is in many countries worldwide.
"This would eliminate the current practice of cross-subsidies that raise the costs of regularly-priced housing, making it more expensive for the M40 income group to afford homes,” he said in a statement following Prime Minister Datuk Seri Anwar Ibrahim’s call yesterday to review the current policy pertaining to affordable housing.
Having said that, Rehda supports the prime minister’s call for the current affordable housing policy to br reviewed.
Tong said the price increase has caused houses in the open market, targeted towards the M40, to become unaffordable and due to this, developments that fail to attract purchasers also have an increased risk to become late, sick or abandoned.
"This rings especially true for projects being developed by Small and Medium Enterprise developers without the fiscal means to cushion themselves against financial challenges, which is one of the reasons Rehda have asked the Government to take back the onus to build affordable housing,” he added.
Tong also highlighted that another unintended consequence of higher regularly-priced housing due to cross-subsidy is the rise of completed but unsold properties, often referred to incorrectly as ‘overhang’.
"We are cognisant and are grateful for the initiatives taken by the government thus far to mitigate pressing concerns in the housing and property industry such as the recent introduction of ‘Skim Simen Rahmah’ to address the building materials price hike.
"However, much more needs to be done to ensure the recovery and sustainability of the industry for the benefit of the aspiring future homeowners,” he concluded. - Bernama
