The Real Estate and Housing Developers Association Malaysia (Rehda) Institute has proposed affordable housing price thresholds in Peninsular Malaysia, with residential units in Kuala Lumpur and the Klang Valley topping the list at RM500,000.

In its summary research report on affordable housing released today, Rehda Institute said the benchmark for affordable housing varied across the country, based on the states median income loan eligibility.

Herewith, the thresholds proposed by Rehda Institute:-

Urban 1 : Kuala Lumpur and Klang Valley: RM500,000

Urban 2 : Other parts of Selangor, Penang Island and Johor Bahru: RM400,000

Urban 3 : Seberang Perai (Penang), Johor, Melaka, and Negeri Sembilan: RM350,000

Urban 4 : Terengganu, Kedah, Perak, Perlis, and Pahang: RM250,000

Urban 5 : Kelantan: RM200,000

The report states that affordable housing is currently being built across the country but there is no market demand for it as 14,739 units fetching below RM500,000 were unsold as at the first quarter of 2018.

The research identified nine structural problems in the current affordable housing system, namely fragmented and unlevel playing field, rigid housing policies, noted unsuitable location, and land price.

Other issues pointed out were uneven cross subsidy, rising development cost, unproductive use of public resources, low financial capacity for Bottom 40 and Middle 40 income groups, and absence of housing market data.

The research says that unsold Bumiputera quota that is not released to the open market were also adding up to holding cost and overall cost of development.

This will add to increase prices of non-Bumiputera lots as cost per unit is passed on to the buyers, it said.

In order to resolve the problems, the research suggests that it is the governments responsibility to build affordable housing and the private sector to deliver market-driven properties without price control and quota.

It also suggests that the government must walk the talk to unlock land for social and public housing purposes, as well as housing financial assistance.

However, Rehda Malaysia President Datuk Seri Fateh Iskandar said that the findings did not reflect the stand of the association.

Rehda Institute is an independent arm of Rehda Malaysia. Their research and studies were done independently, he told a press conference after the presentation of the research today.

Stressing that Rehda acknowledged the growth of intrastate migration, especially to cities like Kuala Lumpur for various reasons, including work and education, he said housing demand was on the rise due to such migration.

Once the economy picks up again, the demand for housing will be greater and we need to find a solution to this, in which we hope the government can work with us, it said.

Rehda Institute will compile its full report in four to five weeks time.