I think by now people who read property related news would have heard that Pakatan Harapan intends to build 1 million affordable homes within 2 terms. Roughly, that’s within 10 years. Some would say that this is a lofty goal because this comes up to 100,000 homes every year, all within the affordable segment. Here’s that earlier article about this 1 million affordable homes. Personally, I think it’s a good goal to have because everyone should own at least the home which they live in. A home will always be a good hedge against inflation too which at the very least would keep the not so wealthy become poor in the future. RM300,000 even if growing at just 3 percent per year would still be close to RM750,000 when one retires after working for 30 years. I fully agree that by then, the RM750,000’s value is only like RM300,000 or even lower but that’s the reason why property is a good hedge. May not make everyone rich but will keep the owner from suddenly becoming poor when he retires and income stops. Okay, what do others think about this 1 million affordable home goal?
Institute for Democracy and Economic Affairs (Ideas) senior fellow Dr Carmelo Ferlito says that the building of so many affordable housing and the property market at large may hurt the industry. He says, “I believe the right question to be answered is if Pakatan’s proposals for the property market are not simply realistic and feasible, but if they are beneficial or harmful. The general perception I have regarding Pakatan’s manifesto on the property market is the one of a desire for an exponential growth of government control and regulation.” He also does not like the idea of a central planning agency because the central planner does not necessarily know the needs of the market better than the people themselves. He dislikes the time limit to develop a land because he said that this prevention against landbank hoarding is an open violation of property rights. Here are his views in full in edgeprop.my. He gave explanation to all his points too.
The Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS) president Foo Gee Jen likes the idea of a central planning agency for affordable homes. He says, “The [idea of] forming a National Affordable Housing Council is in line with the Real Estate and Housing Developers’ Association’s (Rehda) proposal of setting up a central agency to oversee affordable housing matters, which is the right way moving forward.” He shared that affordable homes focus should not just be in the quantity but also building where the demand is greatest. He shared, “Selangor, Kuala Lumpur and Penang are the critical states which have seen housing prices far beyond people’s affordability. Thus, the government should consider building more affordable homes in strategic locations with easy access to public transportation and amenities to meet their needs.” Here are his views in edgeprop.my and with full explanation too.
There is also a very comprehensive article from the National House Buyers Association in edgeprop.my In brief, HBA honorary secretary-general Chang Kim Loong said, “The proposals from Pakatan are well thought out and if implemented right, can go far towards increasing the supply of affordable housing and reduce the threat of a homeless generation.” First up is for the government to DEFINE what it meant by affordable home because currently, the interpretation by home developers and the Bank Negara Malaysia is not the same. An earlier article here. Besides that, Chang also said, “HBA hopes that the new housing minister will always put the interest of the rakyat and country first before the interest of housing developers and does not become a ‘Minister for Housing Developers’.” Happy reading the full article here with all HBA’s views. Very comprehensive really.
What are your views about the affordable homes then? Do you believe that 1 million affordable homes would distort the market since it is government led? Do you think having a single agency is not a good thing because it’s best to let the market forces decide instead? Frankly, I believe the government would be engaging the developers to do the job by providing lots of incentives. I also think that it is necessary for developers to continue moving forward in terms of reducing construction costs. We already know that there are cheaper ways to build today. HBA as usual is very protective of home buyers but this does not mean that it understands what the market wants in the future. Frankly, some surveys could be done with regards to what is actually needed. It may not be the typical 800 plus sq ft apartments that everyone is building feverishly today yeah. I wish every Malaysian would own a home sweet home.
written on 17 May 2018
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