Housing and Local Government Minister Datuk Seri Reezal Merican recently announced ‘Karnival Jom Beli Rumah 2022’, in which 10 000 affordable homes nationwide will be offered, priced at RM 300k and below. But is this a good initiative? And what should constitute affordable housing in the first place? We’re joined by Iskandar Fareez of the Think Tank, REFSA.
Summary
Iskandar Fareez sets out that the inaccessibility of “affordable housing” is caused by an overall symptom of housing in general being considered as “asset-class investments” for individuals rather than a public need for society. People buy properties to rent out, causing a lack of equivalence between house owners and house occupiers (see: the phenomenon of pandemic ghost cities, where people lacked shelter despite the abundance of empty houses), and making the inequalities in housing affordability even more acute. This causes a glut as high-end properties are touted as “affordable housing” when it is out of touch from the average Malaysian affordability. Where defining affordability depends on the income of a society, it should not constitute more than 30% of a person’s income.
The concept of home ownership as a whole needs to be rethought, especially pertaining to urban and suburban areas. If we continue to double down on the existing housing model, higher interest rates could set the average Malaysian up for difficult times. Where such Malaysians are already juggling with household debts, the more housing loans are administered, there is a potential, gradual set-up towards a banking crisis in the future. Shifting the paradigm towards a more rental model can be considered; social housing schemes, housing trusts or municipal models, for example, are methods that can be explored. Not to mention that public housing should push for design of units and public space that enhances usage, as well as integration into existing urban infrastructures such as roads and public transport, schools and health services.
Produced by: Dashran Yohan
Presented by: Dashran Yohan