Industry players expect KPKT minister to solve housing woes

• Long-term solutions on affordability and high cost issues
• Law enforcement and local authorities’ function need to be improved

While Malaysians are still trying to understand the whole structure of the unity government, it is business as usual for newly-minted Local Government Development minister Nga Kor Ming (pictured).

Nga, who started duty helming the Local Government Development Ministry (KPKT) less than two weeks ago, is expected to hit the ground running in tackling the housing woes and affordability issues faced by the rakyat.

According to the International Real Estate Federation (Fiabci) Malaysia president Datuk Firdaus Musa, KPKT should work with the housing-related authorities and associations such as FIABCI Malaysia, Real Estate and Housing Developers’ Association (Rehda), and Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS) to discuss on the possible ways to manage the housing-related issues, such as the market mismatch and regulations.

“KPKT has to work closely with developers to discuss on housing-related issues. We can fine-tune the Dasar Perumahan Negara (for the purpose),” he said.

The president of PEPS, Subramaniam Arumugam, said the affordable housing supply is way below the national target, with many being built in the wrong locations, and there is mismatch between supply and demand.

“With the property market still on its slow recovery path, the property industry and market need a timely boost from the government to come up with policies, guidelines and incentives to revive the property segment,” he said.

Subramanian said the problems of affordable housing can be addressed if state governments and their agencies and GLCs such as Telekom Malaysia, Indah Water Konsortium, and Felda could release their surplus lands to work with property developers to build affordable housing.

“Malay Reserve Land and Wakaf Land can also be released to do joint ventures with Bumiputera property developers,” he said.

He also proposed that KPKT set up a unit to purchase all unsold units of affordable housing to be resold to private companies to provide housing for their staff or create a rent-to-own scheme for deserving B40 income groups.

A long-term solution for affordable housing schemes needed

President of Malaysian Institute of Estate Agents (MIEA), Chan Ai Cheng suggested that KPKT look into a long-term solution for affordable housing schemes in Malaysia.

“The minister should look into schemes in Malaysia modelling after the success of HDB in Singapore where needs are met and buyers are able to gain from capital appreciation,” she said.

Rehda has pledged to work with and support the KPKT minister and strive to ensure that its members carry out its nation-building role of providing quality, affordable homes to the rakyat effectively and efficiently, according to Rehda president Datuk NK Tong.

Tong said Rehda wishes that the government take measures to tackle the many issues afflicting the property and construction industry.

“Among the current hard-pressed issues are the building materials price hike and the shortage of foreign workers; both with lasting effects on the industry the longer they go on,” he said.

Resolving these issues, he added, will go a long way to helping the rakyat attain more affordable housing in the long run, in line with the government’s agenda.

“Engagements with both public and private stakeholders are already underway, but we still implore for a government-level intervention so the issues can be addressed swiftly and effectively,” Tong said.

Still facing multiple problems

On the matter of rising material costs in construction industry,  Firdaus proposed a waiver or reduction of duties on construction materials or regulate the price.

“According to Rehda, the three most important factors affecting developers’ costs are compliance, construction materials and labour, followed by financing and land. This is challenging for the developers and as a result, developers have no choice but to compensate their cost from the houses’ selling price, which will eventually dampen further the property overhang issues,” Firdaus said.

Subramaniam also stated that the property industry is still facing multiple problems of high overhang, increasing construction material costs, high compliance costs and labour shortage.

National House Buyers Association (HBA) honourary secretary-general Datuk Chang Kim Loong said the ‘compliance costs’ for development such as land premium for land conversion; development charges; submission fee and upfront deposits to local authorities; and other statutory contributions should be reduced.

“Developers will factor compliance cost into their sale price and if it could be reduced or waived (where unnecessary), the price of houses should also correspondingly come down,” he said.

Chang said a formula to control house prices must be established as currently, the prices of raw building materials such as cement, sand and steel are regulated by the government.

“Price controls might be necessary to allow people, especially the middle- and lower-income groups, to own their own homes. HBA suggests that the government cap the profit margins of property developers constructing ‘affordable’ houses.

“This would accordingly lead to a price reduction by those involved in the building of such homes, including sub-contractors, suppliers and vendors,” he noted.

Chang also touched on the matter of abandoned housing projects and said KPKT must salvage the problematic housing projects in the country.

“The plight of thousands of innocent housebuyers, who are shackled with problems created by errant and unscrupulous developers, should be looked into and ensure their legitimate rights are not short-changed,” he said.

On local authority function, Firdaus noted that we may need new procedures in managing maintenance of public facilities and more of up-to-date guidelines on approvals based on the structure and local plans.

“I notice that we have really bad road surface conditions despite having good infrastructure and connectivity. Probably we need to look into a more resilient road surface and strict road surfacing process and design,” he said.

Seven main focuses

Earlier, Nga announced that his ministry will be looking into seven main focuses, which include developing and empowering the integrity of local government; developing local authorities to be financially strong organisations; developing comprehensive housing plan with issues such as homeownership and home construction to be addressed; community empowerment; effective and efficient solid waste management; strengthening the smart city and safe city agenda; and strengthening the readiness of firefighter and rescue teams.

“I am aware that my duties and responsibilities in KPKT is big and challenging with a wide range of stakeholders and target groups … therefore, I promise to do my best to carry out my responsibilities, to ensure aspirations the unity government can be achieved as soon as possible,” he said during his clocking in at the ministry, last week.

The 50-year-old Teluk Intan MP, who was born in Kota Bharu, Kelantan, holds a bachelor of Laws (Hons) from University of Malaya.

Nga served as the Pantai Remis state assemblyman from 1999 to 2013, Taiping MP from 2008 to 2018, and later on becoming Kepayang state assemblyman (2013), Aulong Assemblyman (2018) and Teluk Intan MP (2018).