Mon11202017

LAST_UPDATEMon, 20 Nov 2017 2am

Is PR1MA The Answer To Malaysia’s Urban Housing Crisis?

File picFile picMALAYSIA: For Viewing Purposes Only: this seemed to be the lamentation of many who are in need for their own homes as advertised by many developers. This is unfortunate for those who are working in big cities like Kuala Lumpur, Johor Bahru and Pulau Pinang.

The cost of these homes are not commensurate with the average income of a Malaysian household, especially those categorized under the lower income segment.

Those who want to own homes have to resort to buying them in more rural areas that lack many facilities, as well as severelly affecting mobility due to the distance. These so-called satellite towns in neighbouring regions like Seremban, Senawang and Kajang are increasingly becoming more attractive as property prices in the Klang Valley continue to soar.

According to the Economist from the School of Economics, Finance and Banking, Universiti Utara Malaysia, Professor Datuk Dr. Amin Hussin Baharuddin noted that current generations of Malaysians will face increasing challenges in acquiring their own homes, whereby they may end up paying for rental homes till the end of their lives, no thanks to these exhorbitant home prices.The Economist from the School of Economics Finance and Banking Universiti Utara Malaysia Professor Datuk Dr. Amin Hussin BaharuddinThe Economist from the School of Economics Finance and Banking Universiti Utara Malaysia Professor Datuk Dr. Amin Hussin Baharuddin

“In 2013, the home prices in Malaysia rose suddenly up to almost 30 percent compared to the year before; and for this year the prices rose another 8 percent during the first quarter,” he said when met by Malaysian Digest.

What is the government’s  definition of an “affordable home”?

According to the official website of PRIMA Malaysia, the price of an affordable home to be supplied by PR1MA is around RM100,000 to RM400,000 which is open to applicants who have household incomes between RM2,500 to RM7,500 a month.

Differing from “Rumah Mesra Rakyat 1Malaysia” supervised by Syarikat Perumahan Negara Berhad (SPNB) offering homes priced within the range of RM65,000, which is targeted to the lower income household. The applicants for “Rumah Mesra Rakyat 1Malaysia” must have household incomes of below RM3,000, comprising of family members who have never owned a own home yet.

However, many of the urban working class have found themselves stuck between the two categories. While they no longer qualify for low cost homes, they have also found themselves unable to own an ‘affordable home’ under PR1MA as the combined costs of downpayments, financing, renovation and transportation adds up to an unaffordable sum for most people who qualify in that category.

Another frequent complaint that the public have is the gap between what they can afford for downpayment in relation to a realistic monthly loan payment that meet the income eligibility set by banks. An online news site had highlighted the issue in 2013 when PR1MA introduced its first phase of affordable homes as many qualified applicants ended up having their loans applications for PR1MA homes rejected as the monthly repayment figure was beyond their income eligibility.

Do the current housing initiatives by the government, especially PR1MA still fall short of the rakyat’s expectations?

What do the public have to say?

Malaysian Digest met with several members of the public who have  applied for affordable homes, and among the respondent is Khairul Adha Azma, 25, who was initially enthusiatic to know that PR1MA scheme caters to those who are within his economic bracket.

File picFile picUnfortunately, when he found out that a PR1MA home unit may cost between RM100,000 to RM300,000, his enthusiasm went sour and he was very disappointed as that price range was still unaffordable.

In another case, a banking executive, Syami Abdul Mislan, 29, the price is still beyond his financial capabilty.

“For me, the price offered is still high, and if calculated again, the cost does not involve the maintenance cost of the building,” said Shaymi who has been married but still is living in rental home in Petaling Jaya.

Commenting further on the “affordable home” issue, he hoped that the government would consider developing more terrace homes, as opposed to apartments, as for now, he is still renting a flat in Jalan San Peng.

 “We still have plenty of undeveloped land banks that are not explored and can be used to build terrace homes,” he added

What are Malaysians’ hopes for affordable housing in the coming Budget 2015?

In Budget 2014, the prime minister had announced that PR1MA will provide 80,000 housing units with an allocation of RM1 billion with prices 20 per cent lower than market prices. Yet, affordability continues to be an issue for most urban dwellers.

Many Malaysians have high hopes for the coming Budget 2015 and have been invited by the government to provide feedback to the Treasury Department via This email address is being protected from spambots. You need JavaScript enabled to view it. from August 11 to 25 this year. Second Finance Minister, Datuk Seri Ahmad Husni Hanadzlah said that many respondents have highlighted the problem of affordable housing, as reported in The Malay Mail on Sept 26, 2014.  Many agree on the need for the government to  include initiatives in the budget that will help in bringing down home prices so that the concept of “affordable homes” truly acheives its intent.

According to Ismail Kasim, 56, a security officer in a  government school who is earning a  salary of  RM1400 a month; and with this, even a ‘Rumah Mesra Rakyat’ is out of his reach and beyond his means to afford to own his own home, let alone a PR1MA housing project.

When met by Malaysian Digest recently, Ismail expressed his hope for the government to analyze again the affordability factor for the prices of these homes offered. Especially for those with low incomes like him. This plea of affordability has been voiced by not just the lower income group but also the middle-class as housing prices have continued to soar unchecked in the past few years.

 “Affordable Homes” – Is it worth it?

According to Low Oon Jin, a private property developer in the Klang Valley, he said that though the prices offered by PR1MA is far more cheaper than those offered by private developers, sometimes the homes provided by PR1MA may not fulfill the needs of buyers in the ‘Affordable Homes’ category, This is because the product offered might not be  in accordance to the needs of the buyers as they will harbour lingering doubts about whether they will get a low quality product due to the price and how it “does not make sense” in terms of value for money.Pic by PR1MAPic by PR1MA

He also echoed a similar sentiment shared by many that although PR1MA housing projects are advertised as providing for the housing needs of Klang Vallley residents, the projects are  mainly located on the outer edges of the Greater Klang Valley. Many feel that when the properties are located so far away from the Klang Valley, then the price range offered might seem on the high side when compared with other developments in that area.

“However, if there are further infrastructral developments planned by the government such as an MRT link, highways and other facitilites, then it will further increase the attractiveness of these homes and also help their property investments to grow,” he told Malaysian Digest.

Malaysian Digest also managed to interview Construction Manager, Mohd Faiz Abd Wahab, 38, whose concern was that “affordable homes” should only be sold those who deserve it; not those with good positions in the government.

“The Government should focus their attention on the entire developent of PR1MA and help the underpriveleged citizens who can’t afford homes, as compared to attention to 1Malaysia Development Berhad (1MDB).

What says PR1MA?

On the other hand, PR1MA, too, has faced many issues in its mission towards building affordable homes for Malaysias, especially concerning land banks.

According to a local business publication, Malaysian Reserve last July, construction and property development firm Protasco Bhd group MD Datuk Seri Chong Ket Pen said the company was ready to start building PR1MA homes in Perak and Negeri Sembilan but these projects are being delayed over land matters.

“The state governments are having difficulties in alienating land for the project,” according to the Managing Director, Datuk Seri Chong as reported in Malaysian Reserve.

Datuk Seri Chong Ket PenDatuk Seri Chong Ket Pen

An earlier Bernama report had also stated that urban properties are already out of reach for those in the middle-income region; how about those who are in the low-income group?

To conclude, here is an opinion from Professor Madya Abdul Aziz Hussin, Assoc. Prof, of the School of Housing, Building and Planning, Universiti Sains Malaysia, who was quoted in a Bernama report dated October 2013 as saying that his “study reveals that land is the major cost component in the price of a house, particularly in the urban areas, therefore curtailing the land price increase could help to cap the house prices.”

He also noted that government measures are needed to curb real estate speculators and concluded with the observation, ‘.. the purchase of real estate is a form of long-term investment and buyers should be prepared to accept houses that they can afford though they may have to compromise on their dream house," he adds.

 

--mD