On the housing conundrum

The 2015 Budget was an absolute disgrace in terms of creating liveable, cheaper housing. And honestly, there were mixed messages aplenty.

Firstly, there are far too many separate housing programmes that have made this a mess.

In Budget 2015, there is the Youth Housing Scheme, the 1Malaysia People’s Housing Programme (PR1MA), the People’s Housing Programme (PPR), Rumah Mesra Rakyat (RMR), Rumah Idaman Rakyat and even Rumah Aspirasi Rakyat.

Frankly, looking at these programmes, none of them other than PR1MA is looking at liveable housing areas which would include the extension of public transportation networks and even commercial centres.

The lack of the two criteria for liveable housing will only create slums. It also does not help increase disposable income. While houses are cheap, the lack of public transport puts them in debt for automotive loans to get a car. The lack of local commercial zones causes the need to travel further to work and get jobs or set up shop.

Furthermore, none of the measures in the housing plan truly settles the issue that the property market is too expensive and forming a bubble. Instead of telling Malaysians to slow down and rent until prices topple from lack of demand, the government has instead told the people to go dip into their retirement savings to fund their want (not need) for a house.

This is not a move by a government that helps its people, but a move by a government that is actually helping the property development companies.

It is also a concern that nobody wants to mention the obvious problem here, which is household debt. Buying a house increases household debt among Malaysians. If the location is far from public transport, it is an increase in not only housing loans but also car loans.

To decorate the house, they go into further debt for furniture and fittings. Perhaps a one time thing, but it does not help when the lure of cheap monthly instalments by a certain gargantuan, mammoth furniture company is dangled without a care to the interest rate behind it.

And honestly, it begs the larger question: why is owning a home the largest want in Malaysia?

I have no idea, since I am renting a property in Kepong and taking the Komuter and LRT to work every weekday. I hope someone can answer this. Why would a household need (not want) to own a home?

Also, if there is a home shortage, why are developers asking the central bank to ease up on issuing loans?

The answer is two-fold. Developers are pricing houses at outrageous prices, and banks do not wish to lend in as spendthrift a manner as many developers had hoped. And, of course, those who want (not need) a home all suffer for it.

We have to ask ourselves even before we look at the government building more homes, whether or not the current supply of homes is adequate. And I believe it is, but I could be wrong.

We have property gurus who are telling us not to buy houses but instead to look into renting because the prices make no sense and occupancy rates in private developments are dropping.

Instead of the Real Estate and Housing Developers Association (Rehda) telling its members to slow down the building and opening of new housing areas, the association says that the central bank should help them sell more houses at exorbitant prices.

And if I may add, there is one aspect that we are not looking at inside the Malay community, which is that we have the rich cannibalising the poor due to our rather outdated affirmative action policy on housing.

Firstly, why are we giving a Bumiputera housing discount without taking into account a person’s income and his initial holdings?

Surely the initial idea of affirmative action in helping the Malay community was a “one family, one home” policy. It was never meant to be a “one family, a home under my sons’ names, daughters’ names, aunties’ names, uncles’ names” and such.

We have a community that never saw rent-seeking, the earning of money through no work at all, as a problem. Well, now it is, and as such the policy of a housing discount without considering wealth and holdings as a deal breaker is not helpful to the low-income and middle-income earners or even developers.

For the middle- and low-income earners, there will be cheap houses bought up by the rich who will rent it out. For developers, they can find the rich Malays to buy out the Bumiputera quota instead of making them reconsider the price scale.

This is the conundrum facing the Malay community at large, and I hope that the government takes this humble opinion into consideration. Because if not, we are stuck in a vicious circle that will end up with a burst bubble that benefits no one in this country. – October 21, 2014.

* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insider.