By Azlina Aziz
KUALA LUMPUR, Aug 29 -- Decent affordable housing is fundamental to the health and well-being of people, and to the smooth functioning of economies. Yet around the world, in developing and advanced economies alike, cities are struggling to meet that need.
In line with the country’s commitment to provide adequate and affordable housing for all income levels, particularly for the lower-income group, Bank Negara Malaysia (BNM) Governor Datuk Nor Shamsiah Mohd Yunus stressed that affordable housing is a shared responsibility and that the government is looking at how infrastructure providers could play their part in reducing the cost of houses.
“There are three components which make up the biggest proportion of the cost, namely land, construction and infrastructure,” she said in an exclusive interview with Bernama recently.
“There is a greater recognition now on the need to reduce costs. For land costs, the government is collaborating with the state government on mechanisms to reduce costs; and for construction costs -- that is where the government is looking to leverage technology such as the IBS (Industrialised Building System) to bring down the cost,” she pointed out.
Explaining further, the Governor said “more importantly is to adopt strategies to raise income levels of households to make housing more affordable to the rakyat.”
Over the period 2007-2016, growth in house prices have outpaced household income.
Based on the median multiple approach, a house is deemed to be unaffordable if it is priced more than three times the annual household income. Malaysia’s is at 4.8 times.
“Let’s take the B40 for example. With their median monthly income of RM3,000, they can only afford houses up to around RM108,000 -- three times their annual income.
“If you look at the 68 per cent of total unsold residential units, they are above RM300,000. That is why we also have to address the supply-demand mismatch.
“While there is demand for affordable housing, the developers are building outside the affordable reach of the majority of Malaysians,” said Nor Shamsiah.
Recently, the central bank expanded the eligibility criteria for those seeking to purchase property under the BNM’s RM1 billion Fund for Affordable Homes.
Effective Sept 1, 2019, individuals planning to apply for financing to purchase affordable houses would be eligible to do so if they have a maximum monthly household income of RM4,360, up 86 per cent from the earlier threshold income level of RM2,300 per month.
Plus, the maximum property price will be increased to RM300,000 from RM150,000. These new terms would help buyers from this income group to obtain financing to purchase their first house.
Meanwhile, the Governor reiterated the importance of the Guidelines on Responsible Financing.
“The Guidelines on Responsible Financing is still relevant because the main objective of these guidelines is to ensure that borrowers are able to afford the loan and can benefit from it.
“So, if a customer is taking the loan to buy a house, the customer should eventually own the house at the end of their loan tenure. Ultimately, the banks and the borrowers should also be responsible in the decision. It works both ways,” she added.
The central bank’s responsible financing guidelines are in place to protect the interest of borrowers by ensuring that those who borrow are within their capacity to honour the financial obligation until the end of the loan tenure and eventually own the property.
This is as opposed to merely buying the house upfront and then fall behind their obligations and end up losing the property.
On that note, the Governor said a lot is being done to educate consumers on areas relating to credit and financial management, especially through the Credit Counselling and Debt Management Agency, or commonly known as Agensi Kaunseling & Pengurusan Kredit (AKPK), which has gained greater traction.
AKPK is an agency established by BNM to help individuals take control of their finances through prudent financial management and financial education.
Financial literacy is among the factors that can contribute to sustainable and inclusive economic growth. It is the first line of defence for consumers to protect their rights when dealing with unfair market practices.
At the same time, to alleviate the public’s burden in coping with the rising cost of living, particularly for the M40 and B40 groups, the Governor said BNM has been emphasising the importance of improving technical skills, reforming the labour market and education system.
“There needs to be greater collaboration between training providers and the industry players to ensure Malaysia produces graduates with the right skills,” said Nor Shamsiah.
During the interview, the Governor also explained at length several other key issues pertaining to the country’s economic growth, the banking industry, the vital need to increase consumer awareness, as well as the importance of education, reskilling and upskilling in order to stay relevant in a challenging and constantly changing economy.
-- BERNAMA

GEORGE TOWN: The Penang government today issued a warning that it would blacklist developers who forced those buying the state’s affordable housing units to pay more than the price set.

This follows the revelation yesterday by the Consumers’ Association of Penang (CAP) that many first-time homebuyers are being forced to pay more than double for their low-medium cost units, which have a mandated price of RM72,500 for a 760 sq ft apartment.

At a press conference today, state Housing Committee chairman Jagdeep Singh Deo said he was very upset over the report, urging any buyer facing such problems not to sign up for the extras that they did not want.

He asked them to immediately report the matter to his office so that he could take action against these errant developers.

He said such developers would be given a show-cause letter.

Jagdeep warned developers who think they could get away by charging extra, saying they would be banned from being involved in any more projects.

“We can also stop giving them a list of first-time homebuyers to take up their affordable homes units,” he said.

“If the buyers do not want to take up carpark or renovation packages, then you cannot force them. They should be allowed to buy the bare units at the ceiling prices set by the state government,” he said.

The bare units are those without any tiling or other fittings.

Yesterday, CAP revealed that more than 10 homebuyers had paid between RM100,000 and RM182,000 for their 760sq ft apartments in Tanjung Tokong here.

Cashing in on the demand for these affordable units, the developers took a “take it or leave it” attitude with potential buyers.

These desperate buyers were forced to pick extras such as tiling work or car park lots, which cost them an extra RM50,000. The developers insisted that these buyers take up these add-ons if they wanted to buy the units.

Currently, the capped prices of homes under the “affordable homes” category on the island are RM150,000 (for 750 sq ft), RM250,000 (for 800 sq ft) and RM300,000 (for 900 sq ft).

On mainland Seberang Perai, the prices are capped at RM150,000 (for 750 sq ft), RM200,000 (for 800 sq ft) and RM250,000 (900 sq ft).

As for the “low-cost and low-medium cost” categories in Penang, the prices of homes are set at RM42,000 (for 650 sq ft) and RM72,500 (for 700 sq ft).