The Real Estate and Housing Developers’ Association (Rehda) warned that the cost of cross-subsidising affordable units would be passed on to middle-income earners, potentially increasing market prices for them.
For mandatory Madani housing blocks to work, Rehda urged banks to provide subsidised loans for affordable housing mortgages.
It also suggested the establishment of a national affordable housing trust to strategically address supply and demand mismatches for affordable housing.
KUALA LUMPUR, Aug 8 — The Real Estate and Housing Developers’ Association (Rehda) has today urged other industry players to also do their part, after Prime Minister Datuk Seri Anwar Ibrahim directed for affordable Madani housing blocks to be included in every new residential projects.
In a statement, its president Datuk Ir Ho Hon Sang said banks can offer subsidised loans for affordable housing mortgages, pointing to how rising costs may affect the middle-income group who are not eligible for the scheme.
“Other incentives, such as discounts in premium charges, development charges and in Improvement Service Funds (ISFs) will also go a long way to make housing more affordable for the rakyat,” Ho said.
Ho said that since developers have to cross-subsidise these affordable units, the cost would inevitably be passed on to middle 40 per cent income earners (M40) who are not eligible for the Madani units.
“The suggested requirement, whereby a full block or two need to be made into Madani housing instead of a set percentage, will naturally cause a further increase in the free market prices for those who are not eligible for affordable housing,” he warned.
Ho highlighted a mismatch of supply and demand as a challenge for developers, saying some areas require more affordable housing units — and therefore the issue needs a targeted solution rather than a blanket policy.
To back this, he cited National Property Information Centre’s (Napic) latest report saying that 28.6 per cent of completed but unsold residential properties in Malaysia for the first quarter of 2024 were priced at below RM300,000.
He then called for the establishment of a national affordable housing trust where developers contribute a certain percentage of their gross development value (GDV) — overseen by a committee made up of representatives from the Ministry of Housing and Local Government, the state authorities and Rehda.
“[They] can observe and analyse which part of the city or state has high demand for affordable housing, so that the affordable houses can be built strategically where the demand is, but not a flat quota that is not market-driven and causing some areas to be underprovided and other areas overprovided,” Ho said.
Earlier this week, Prime Minister Anwar said he had instructed the Federal Territories Department and Kuala Lumpur City Hall (DBKL) to incorporate one or two Madani housing blocks in every new residential project.
He said this requirement is crucial for the approval of new housing developments, so low-income groups can also become homeowners.