Revitalising the property market in Malaysia: A government perspective

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Local Government Development Minister Nga Kor Ming

Local Government Development Minister Nga Kor Ming

Revitalising the property market in Malaysia: A government perspective

In the wake of the global Covid-19 pandemic, the Malaysian government has orchestrated a series of policies and regulatory measures that not only catalysed a resurgence in the property market but also stimulated the development of new project units across the nation. This concerted effort seeks to not only breathe new life into the real estate sector but also address the evolving needs and aspirations of the Malaysian population.

The resounding call for affordable housing has become a cornerstone of the government's strategy, aligning with the nation's economic recovery post-pandemic. The surge in construction activities, fueled by the demand for affordable housing, has translated into significant ongoing developments throughout the country. Recognising the pivotal role of the real estate sector in economic revitalisation, the government has placed an emphasis on creating a conducive environment for robust property market growth.

Under the ambit of the 12th Malaysia Plan (12MP) for the period 2021-2025, the government has made a robust commitment to supply 500,000 quality and livable affordable housing units by 2025. This ambitious target is a testament to the government's dedication to providing better access to affordable housing, particularly for the targeted demographic groups. The Ministry of Local Government Development (KPKT) has been entrusted with the responsibility of meticulously monitoring the implementation of this strategy by federal and state agencies, as well as private housing developers.

Affordable housing targets

The National Affordable Housing Council (MPMMN), chaired by the Prime Minister Datuk Seri Anwar Ibrahim, serves as the vanguard for monitoring the progress towards the 500,000-unit target. As of June 30, 2023, a total of 261,901 affordable housing units have been completed and are in the construction phase, contributing significantly to achieving 52.38% of the targeted goal. This progress underscores the government's dedication to transforming its housing vision into a tangible reality.

In the fiscal year 2023, the government has allocated a substantial sum of RM389.5mil to fund the implementation of 29 ongoing People's Housing Programme (PPR) projects and 13 new PPR projects throughout the country. This injection of funds is expected to benefit 12,400 potential new residents. Looking ahead to 2024, an additional allocation of RM546mil has been earmarked to continue 36 PPR projects, including a new venture in Kluang, Johor. This forward-looking approach emphasises the government's unwavering commitment to providing high-quality PPR units with integrated facilities and advanced technological solutions for efficient maintenance management.

Facilitating home ownership via financing initiatives

The Malaysian Housing Financing Initiative, i-Biaya, has emerged as a crucial component of the government's efforts to facilitate housing loans for low- and medium-income groups. The Housing Credit Guarantee Scheme (HCGS) by Syarikat Jaminan Kredit Perumahan Bhd (SJKP) operates within i-Biaya, offering financing with a limit of up to RM500,000. This scheme, initiated in 2008, has witnessed the approval of 30,841 loan applications totaling RM5.85bil. Notably, 70.7% of successful applicants fall within the age range of 35 and below, showcasing its impact on empowering the younger demographic.

To further enhance accessibility to housing finance, the government has not only announced an additional guarantee of RM5bil in the 2023 budget but has also pledged another RM10bil guarantee, as disclosed during the tabling of the 2024 budget. This commitment aims to benefit up to 40,000 borrowers, demonstrating the government's proactive stance in addressing the financial aspects of homeownership.

Exemptions 

The Malaysian Home Ownership Initiative, i-Miliki, is a commendable effort aimed at incentivising first-time homebuyers and alleviating the financial burden associated with buying a home. Purchasers of homes priced at RM500,000 and below enjoy a full exemption on stamp duties for the Memorandum of Transfer (MOT) and loan agreement. Meanwhile, purchasers of residential units priced above RM500,000 up to RM1mil receive a 75% remission on these two stamp duties. This stamp duty incentive is applicable for sale and purchase agreements executed between June 1, 2022 and Dec 31, 2023.

Addressing abandonment issues

KPKT has been actively involved in addressing issues related to abandoned housing projects. Recognising the pivotal role of the housing development sector in the national economy, the government has celebrated significant accomplishments in the recovery of such projects. As of Oct 31, 2023, a total of 351 projects or 43,738 housing units with a gross development value (GDV) of RM32.87bil have been successfully revived. This includes the revival of eight abandoned private housing projects, comprising 37,392 housing units with a GDV of RM574.08mil. The government's vision for 2024 is to complete the revival of 20 abandoned housing projects, ensuring that these units contribute meaningfully to the housing landscape.

A forward-looking initiative, the Madani Inclusive Housing project, envisions the construction of 800 units of houses in various built-up areas in Kuala Lumpur, Selangor and Penang. This pilot project aims to adopt cooperative living arrangements, bringing together diverse target groups such as older people, youth and young families. The goal is to foster inclusive housing that creates a more livable environment, catering to the unique needs of different segments of the population. The Ministry is actively preparing the project proposal and identifying suitable sites for construction.

Leveraging Big Data 

Recognising the importance of data-driven decision-making, KPKT is in the process of developing Big Data Analytics (BDA) for housing as a data centre. This strategic initiative aims to leverage data analytics to facilitate evidence-based policy formulation and enhance institutional capabilities in planning and monitoring the housing industry. As the population of Malaysia continues to grow, the BDA for housing will play a pivotal role in addressing the evolving demands and ensuring that housing initiatives align with the unique needs of different localities.

According to the Household Income and Basic Amenities Survey Report 2019 from the Department of Statistics Malaysia (DOSM), Malaysia boasts a home ownership rate of 76.9%. However, the government's approach is shifting from an emphasis on ownership to providing shelter as a basic need and human right. The 12MP mid-term review outlines continued efforts to increase the supply of quality and affordable housing by improving access and promoting inclusive affordable housing. The overarching goal is to nurture the rental market as a viable alternative to homeownership, recognising the diverse preferences and circumstances of the Malaysian population.

The comprehensive government initiatives outlined above signify a holistic and forward-thinking approach to addressing the dynamic challenges and opportunities in the Malaysian property market. By putting together financial incentives, strategic planning and innovative projects, the government aims to not only meet the growing demand for housing but also create a housing landscape that is inclusive, sustainable and responsive to the evolving needs of the Malaysian people. The journey towards a vibrant and resilient property market in Malaysia continues, with a strong commitment to fostering economic growth, social well-being and housing security for all.

Local Government Development Minister

Nga Kor Ming


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