Housing in Malaysia has been fairly difficult for the public to be purchased. The matter has been discussed many times and it’s understood that the earning power doesn’t equate to the housing costs.
Apart from that, housing pricing has also been rapidly increasing over the years. Which makes it very difficult to purchase housing without being incurred a big debt to afford housing.
When compared to our counterpart nation Singapore, the citizens are still able to afford housing even with very little land. The Singaporean government’s plan to resolve the housing issue and to provide every citizen with housing was successful. The houses are also financed by the government which helps them with the costing of owning housing.
International Real Estate Federation (FIABC) Malaysian Chapter previous president, Yeow Thit Sang highlights that Malaysian’s earning power is not in line with the housing costs. He also said that the government is able to help potential buyers by exempting land costs from the entire cost.
A potential solution
Yeow also talked about the other cost involved in bringing utilities to the housing scheme. “Purchasers are also paying for the cost of bringing such utilities to houses. This should be borne by utility companies, which earn their profit by selling utilities services to house owners,” he said.
“Currently, housing developers are only paying for the capex of bringing utilities services to the houses. I know that in Australia, the government is paying for the laying of water pipes, electricity cables, and gas pipes to the house boundary. All such costs add more than 40% to the total expenditure.“
“With these costs (borne by the government), house prices can be greatly reduced. Then Singapore’s HDB model can be followed,” Yeow added.
Essentially, the Singaporean HDB concept where financial aid is allocated for the citizens and reduced utility costs. This could potentially help solve housing problems in Malaysia but around urban areas. Singapore’s land characteristics are different from Malaysia’s. It makes sense for them to build vertically as compared to Malaysia.