News & Articles Call To Reduce Inefficiencies In Housing Supply
Call To Reduce Inefficiencies In Housing Supply
24 Aug 2015
KUALA LUMPUR, Aug 24 (Bernama) -- There is a need to reduce inefficiencies in the current local housing supply and for intervention to make the supply side more elastic to be responsive to the needs of all sections of the population.
Managing Director of Khazanah Research Institute (KRI), Datuk Charon Mokhzani, said middle-income households were neither eligible for social housing nor able to afford private sector-supplied houses.
"The policy should therefore be geared to improving the elasticity of housing supply and make it more responsive to the needs of all sections of the population," he said at the launch of the institute's publication, 'Making Housing Affordable' here today.
Khazanah Nasional Bhd Deputy Chairman, Tan Sri Nor Mohamed Yakcop, launched the publication.
Charon said applying the globally-accepted measurement for housing affordability, the KRI's report found that Malaysia's housing market was deemed 'seriously unaffordable', where the median house price was 4.4 times median annual household income.
"An affordable market is one where the median house price is three times median annual household income. In Kuala Lumpur, as the median household income is the highest, the definition of affordable housing rate is around RM280,000," he said.
He said the developers should also be launching (affordable) houses starting from RM100,000, beside the high-end projects.
Charon said it was generally perceived here that high housing price was a direct result of high land and construction costs, but KRI's report indicated the contrary -- rising house price was seen as a determining factor for the rise in land prices.
He said it was important to reconsider housing as a social welfare issue and efforts must be moved towards a broader agenda of guiding and managing the housing sector as a whole.
The KRI's report calls for shifting the focus of housing policy from demand-led initiatives to reducing inefficiencies in housing supply.
It recommends institutionalising reforms and restructuring the way in which developers and government housing agencies procure materials and services from the construction industry, otherwise known as the procurement system for housing.
Earlier, Nor Mohamed, in his speech, said a dynamic and self-funding housing industry could save government on housing subsidy.
"It is crucial to enhance the capacity on the supply side in order to develop a sustainable and responsive housing sector," he said.
Managing Director of Khazanah Research Institute (KRI), Datuk Charon Mokhzani, said middle-income households were neither eligible for social housing nor able to afford private sector-supplied houses.
"The policy should therefore be geared to improving the elasticity of housing supply and make it more responsive to the needs of all sections of the population," he said at the launch of the institute's publication, 'Making Housing Affordable' here today.
Khazanah Nasional Bhd Deputy Chairman, Tan Sri Nor Mohamed Yakcop, launched the publication.
Charon said applying the globally-accepted measurement for housing affordability, the KRI's report found that Malaysia's housing market was deemed 'seriously unaffordable', where the median house price was 4.4 times median annual household income.
"An affordable market is one where the median house price is three times median annual household income. In Kuala Lumpur, as the median household income is the highest, the definition of affordable housing rate is around RM280,000," he said.
He said the developers should also be launching (affordable) houses starting from RM100,000, beside the high-end projects.
Charon said it was generally perceived here that high housing price was a direct result of high land and construction costs, but KRI's report indicated the contrary -- rising house price was seen as a determining factor for the rise in land prices.
He said it was important to reconsider housing as a social welfare issue and efforts must be moved towards a broader agenda of guiding and managing the housing sector as a whole.
The KRI's report calls for shifting the focus of housing policy from demand-led initiatives to reducing inefficiencies in housing supply.
It recommends institutionalising reforms and restructuring the way in which developers and government housing agencies procure materials and services from the construction industry, otherwise known as the procurement system for housing.
Earlier, Nor Mohamed, in his speech, said a dynamic and self-funding housing industry could save government on housing subsidy.
"It is crucial to enhance the capacity on the supply side in order to develop a sustainable and responsive housing sector," he said.
Source: Bernama