Rethink housing financialisation, says Liew

KUALA LUMPUR (Feb 22): It is time for Malaysia “to unwind and reverse the 50-year history” of “housing financialisation”, said Kluang MP Liew Chin Tong.

Writing in a column in The Edge Malaysia entitled “Thinking beyond the housing financialisation model”, Liew, who is also deputy minister of defence, said housing in the country has for very long been “treated as a commodity or vehicle for wealth creation and investment rather than meeting a social objective”.

Liew also revealed that “among the four biggest Malaysian banks, more than two-thirds of their loan portfolios are related to properties and cars as they are deemed ‘low risk’ compared with more complex businesses such as new and emerging industries”.

“The geographical mismatch caused by the financialisation model is another problem where those who have to work in the inner city often cannot afford to stay in the area and have to spend hours commuting each day,” he explained.

He called on GLCs and government-linked investment companies to “rethink their roles and at least commit themselves to not being the prime movers that cause further urban sprawl via the ‘plantation estate to housing estate’ model”, and become “the leaders supporting the return of Malaysians to sustainable housing in inner cities, including supporting a rental housing model”.

Liew said that the past half century, “housing financialisation in Malaysia also coincides with that in the Anglo-Saxon world, which was very well explained in a recent issue of the conservative publication The Economist”.

“I was amazed that even The Economist is now talking about financialisation of housing as ‘a horrible housing blunder’”, he said.

The law maker said the authorities “may have to consider building rental housing for the middle-class working population”.

“These housing units would allow them to walk, cycle or commute a short distance by public transport. Hence, there is no need to build carparks, slashing at least 30% of costs. Some of these housing units can be turned into real estate investment trusts (REITs) as long as they generate decent yields,” he added.

Liew suggested that old buildings in inner cities “can be repopulated with minor adjustments”.

“This will help give our buildings a new lease of life. I am a supporter of heritage conservation, but through repurposing usage, not turning all heritage buildings into museums, cafés and hotels.”

Read the full report in this week’s The Edge Malaysia