Homeownership going in the right direction, but affordability can be improved, says Rehda

• President of Rehda Datuk NK Tong noted that in terms of homeownership, Malaysia is at almost 77%, which is one of the highest in the world.
• “In that sense, the government is already there, right? So, what can it do more? I think it's all about making it more affordable, and that's why we (want to) talk about reducing compliance.”

KUALA LUMPUR (Feb 22): The Real Estate and Housing Developers’ Association Malaysia (Rehda) is hopeful that the property industry will continue to flourish and the government to look into the matter of homeownership and affordability.

“We hope that the government will remain cognisant of other concerns within the industry, particularly pertaining to home ownership for the rakyat,” president of Rehda Datuk NK Tong said.

He noted that in terms of homeownership, Malaysia is at almost 77%, which is one of the highest in the world.  

“In that sense, the government is already there, right? So, what can it do more? I think it's all about making it more affordable, and that's why we (want to) talk about reducing compliance,” he told EdgeProp.

However, Tong said, the matter is out of the federal government’s control as it is a state matter and the states introduce their own rules. 

He added that the new Local Government Development (KPKT) minister is aware of this matter has said that he would engage the state and local authorities in finding the solution.

“Adding more conditions at the state or local authority level don't necessarily make it safer, better quality as the federal government has already set a very high standard.

“So, we're asking that everyone reviews how we can work together to make it cost effective and safe, and of good quality, Tong said.

He said the new government can look at affordable housing as it is the key in homeownership.

“It requires a lot of political will. But if the government can take on public housing, that will free the cross subsidy,” he said.

He noted that if developers do not have to provide affordable housing, they can lower the price of the normal housing as currently developers are increasing the price to subsidise the affordable housing provided by them.

Tong added that if the normal price housing sales slow down in the next global slowdown, affordable housing could not be cross subsidised and the number of affordable units will drop.

“That's why I think it's important the government takes on affordable housing so that they don't have to depend on the private sector as when there is an economic downturn and the private sector cannot deliver, the B40 will suffer.”

Earlier, Tong delivered a presentation on Rehda Property Industry Survey 2H2022 and Market Outlook at the Rehda Media Briefing, today.

According to the survey, which involved 136 of Rehda members, there were an increase of 23% in terms of project launched in 2H2022 (9,669 units), compared to 1H2022 (7,843 units).

The respondents say 97% of the launches were residential, with serviced apartments being the highest, with 2,670 units, followed by two- to three-storey terrace and, apartment and condominium, with 2,610 units and 1,748 units, respectively.

The survey also stated that 75% of respondents reported an average increase of 13% in the overall costs of doing business in 2H2022, while 82% of respondents reported 17% average increase in 1H2022.

“Meanwhile, 94% of respondents are said to be affected by the current economic scenario, and have taken various cost-cutting measures including freezing recruitment, reducing salary, rescheduling the launch of planned projects and reducing the scale of launches,” Tong said. 

Similar to 1H2022, he said, respondents reported that the three main cost components affecting cash flow were material and labour cost, compliance cost (including but not limited to policies, contributions, planning requirements and so forth) and land cost.