KUALA LUMPUR: Large, well-managed affordable housing projects are beneficial for the overall housing market and do not negatively impact property values in higher-end segments.

"Affordable housing is designed for those who cannot afford more expensive properties, so it does not interfere with the middle and upper tiers of the market," said Kashif Ansari, co-founder and group chief executive officer of Juwai IQI.

"In the long term, good affordable housing is positive for the market. Look at nearby Singapore for an example of how abundant affordable housing helps families build wealth and financial stability. Over time that translates into demand for higher-priced housing," he said.

Kashif commended the government's RM13 billion investment in its largest affordable housing initiative to date, describing it as a critical step toward addressing the country's housing challenges.

Housing and Local Government Minister Nga Kor Ming, in announcing the initiative, said it reflects the unity government's commitment to ensuring all citizens can achieve homeownership.

Kashif told NST Property that the new RM13 billion promises to be another tool in the toolbox for solving the problem of housing.

"With good affordable housing, families can have the stability they need to work, send their kids to school, and save money. That leaves aside the potential increase in value of the affordable housing they live in, assuming they hold the title," Kashif said.

When asked about the 688,663 civil servants still unable to own homes, Kashif noted that tailored programmes for specific groups, such as civil servants, are crucial.

He pointed out that while Malaysia's overall homeownership rate stands at about 76 per cent, it is only 47 per cent among civil servants.

"There's a gap to bridge. The RM13 billion initiative can contribute significantly, but solving such a large-scale issue requires a multi-pronged approach. A young couple in Kuala Lumpur will have different needs than a family in Sabah," he said.

Kashif added that existing initiatives like the Malaysian Civil Servants Housing Programme (PPA1M), Perumahan Rakyat 1Malaysia (PR1MA), Residensi Wilayah, Rumah Selangorku, My First Home Scheme, and BSN MyHome already play a role in addressing housing needs.

Meanwhile, Dr. Oh Si Eun, principal adviser at the Pacific Research Centre, offered a cautious perspective.

He noted that while the RM13 billion initiative could stabilise housing prices in the long term, it might also inadvertently lower property values in some segments.

"Both scenarios can happen, but that is inevitable, as mass low-cost housing would typically drive down property prices in general while making it more affordable for the low-income earners. The question is whether there are effective programmes to cushion the fall for existing owners," Oh said.

Dr. Oh stressed the importance of enforcement for the project's success.

"Very often the debt collection is neglected and subsidised loans are not new and sometimes go repaid. Rent-to-own is one possible idea," he said.