Rehda: Govt should be responsible for delivery of affordable housing

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

Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!

Rehda , housing , developer , affordable housing , M40 , property


Next In Business News

Wall St set to open lower as yields rise ahead of Powell speech
Astro ends Go Shop home shopping operations
AMMB, MetLife aim to sell jointly-owned units to Great Eastern for RM1.12bil
Pestech wins RM21mil smart meter contract from TNB announces dividend policy to close share price gap
Epicon's unit bags RM130.89mil contract from Ibrahim & Sons
Bursa Derivatives extends derivatives trading strategic agreement with CME Group
Ringgit ends marginally lower against US dollar
reNIKOLA issues RM390mil Asean green SRI sukuk, world's first climate sukuk
Econpile wins RM101.3mil substructure works contract

Air Pollutant Index

Highest API Readings

    Select State and Location to view the latest API reading

    Source: Department of Environment, Malaysia

    Others Also Read