National Housing Policy to be reviewed to ease household debt, says Zahid

Zahid Hamidi Facebook picture.

PETALING JAYA: A proposed review of the National Housing Policy will make home ownership more affordable while increasing disposable income, says Datuk Seri Dr Ahmad Zahid Hamidi.

The Deputy Prime Minister said the review may be necessary because of the increase in household debt to gross domestic product (GDP) ratio from 67.2% in 2002 to 81.2% in 2022.

"The property sector continues to dominate household debt, with housing credit increasing from 36% in 1997 to 59.7% in 2022," he said in a statement after chairing the third National Action Council on Cost of Living (Naccol) 2024 meeting on Thursday (Oct 10).

"This trend is seen as having a significant impact on disposable income levels, and the meeting agreed to examine the matter further, particularly in the context of credit growth amid wage stagnation, especially for the lower 70% of households."

Also present were Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali, state government representatives, corporate figures, NGOs, industry players and consumers.

Ahmad Zahid said the Finance Ministry should take up the policy review proposal with Bank Negara and the Housing and Local Government Ministry.

"This includes reviewing the provision of long-term housing loans to ensure that individuals and less capable households can own homes without being burdened by rising prices, particularly long-term housing loan financing," he said.

The Statistics Department also presented the Cost of Living Indicator 2023, developed to provide an overview of the total expenditure required by households to meet a decent standard of living.

The meeting was also informed that this indicator will be launched by the Prime Minister on Nov 2, Ahmad Zahid said.

"This new indicator is expected to add value to government policy-making related to the cost of living, including implementing aid distribution, especially to targeted groups."

The meeting also discussed co-payment features for medical and health insurance and takaful (MHIT) products, presented by Bank Negara.

It was informed that the co-payment system provides consumers with more choices, and encourages healthy competition among insurance or takaful providers to match the financial situation of consumers.

"According to Bank Negara, co-payment can offer prices between 19% and 68% lower than products without co-payment, indicating a good balance between supply and demand in the country’s medical and health sector.

"We discussed the implementation of two co-payment features to help create a conducive and sustainable health ecosystem through transparency in medical bills," Ahmad Zahid added.