KUALA LUMPUR, Jan 16 ― The Najib administration's failure to deliver its pledge for a million “affordable” homes in the previous term could underpin the the challenge Pakatan Harapan faces to meet its housing target.
Property consultants CBRE ― WTW Malaysia managing director Foo Gee Jen said the current government's target to build a million affordable homes in 10 years or 100,000 a year is a “tall order”.
Foo based his views on the current housing policy, which he said is over reliant on the private sector to build those homes. Unless the government intervenes, the target may seem hard to achieve given the limitation developers face, he said.
“You look at GE 2013,” Foo told reporters at the firm’s Asia Pacific 2019 property outlook briefing here.
“They promised to build a million homes in five years, but if you look at what was delivered only around 100,000 homes.
“I give it a D minus,” he added.
As a severe undersupply makes homes unaffordable for most Malaysians, housing continues to be a key political issue.
Both Barisan Nasional (BN) and PH had tried to outdo each other in the past two elections by promising to build more affordable homes, defined as those priced RM350,000 below.
Likely drawing from BN’s failure, PH said it would instead aim to build a million medium-priced homes in the span of 10 years, although the new administration has yet to outline clearly how it intends to achieve this.
Foo said while PH may have an uphill task at hand, the target was far more realistic than BN’s.
“It’s possible the numbers are definitely more relatable,” he said.
Any hope for Putrajaya to correct the supply mismatch of affordable homes hinges on a rethink of its housing policy, Foo said.
He suggested direct federal-state intervention either by making land cheaper for developers or rolling out housing subsidies.
Currently, expectations are on the private sector to build those homes even as land is sold to them at a premium.
“The states still have many landbanks. This can help,” Foo told Malay Mail in a brief interview just after the media briefing.
“If we cross-subsidise for the B40 (bottom 40 per cent), the M40 (middle 40 per cent) will suffer.”
Up until now, private developers say exorbitant land prices have made it tough to build cheaper homes.
But because they are required to under state low-cost home policies, developers claimed they have to jack up the price of medium-ranged properties and use the profit to finance the low-range projects.
“So the M40 is the one that suffers,” Foo said.