KUALA LUMPUR, Jan 20 ― Putrajaya should push the private sector to provide more affordable housing to fill the gap between the limited supply and overwhelming demand, property experts said today.
Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector (PEPS) president Datuk Siders Sittampalam explained that the government-run affordable housing programmes are insufficient to meet the huge demand for such homes, while the private sector is less driven to build these due to its lack of profitability.
"We cannot entirely leave it to the developers to solve the affordable home problem it has to be from the government sector. Just like PR1MA, it's not achieving its target. It needs a total revamp of the affordable scheme and the government needs a plan.
"The private sector is more commercial-oriented and they're buying the land so if its not profitable for them to build affordable housing in city, they won't do it," he said during a press conference at the 9th Malaysian Property Summit.
The summit's organising chairman James Wong added that Putrajaya should form a partnership with private property developers or offer developers surplus land to encourage them to build more affordable homes which is in extremely short supply.
"Affordable housing has been a neglected subsector for a long, long time. Most developers have been focusing on middle- and high-end houses and only build low-cost houses because its a requirement.
"Low cost homes have been neglected by developers for many years. There's a big gap between supply and demand. These are in demand in highly-populated areas like KL, Penang, and JB but land is so scarce. You cannot buy land and build affordable homes because developers cannot afford it," Wong said.
PropertyGuru’s 2015 survey showed three out of four Malaysians were unhappy with the current property market, citing expensive properties and a lack of government action among the main reasons for dissatisfaction.
The main reasons cited are the perception that properties are overpriced (86 per cent), the rapid increase of prices (61 per cent), a lagging economy (57 per cent) and unpredictable real estate conditions (37 per cent).
Despite the various government schemes to encourage domestic property purchase, 37 per cent of respondents did not apply for such programmes, while another 36 per cent said they did not qualify for such assistance.
Only one out of five respondents applied for PR1MA while only four per cent applied for the Private Affordable Ownership Housing Scheme (MyHome).
Putrajaya has since pledged to build more affordable homes in the next few years and introduce new programmes like that of the First Home Deposit Scheme to help affordable home buyers with their down payments on their first house purchase but Siders believes this is not enough.
"Every affordable housing scheme is oversubscribed. They have the balloting process and you can see thousands there but only a few hundred houses. That's the demand for the affordable housing scheme," he said.
Wong also suggested that Putrajaya reintroduce the Developers Interest-Bearing Scheme (DIBS) scheme as consumers struggle to cope with the rising cost of living and the property market is on a downward trend.
"I think that if the government reintroduces DIBS, that should only be for first time buyers and confined to just affordable homes.
"Because we have seen with the introduction of DIBS, the havoc it has created in the property market causing so much speculation," he said during a press conference.
In Budget 2014, Putrajaya forbade DIBS in which the developer pays the interest payments for the buyers’ loans during the construction of a property, which was seen as an incentive for speculation.
