Rise in Sabah house prices “too rapid”.

The Sabah state governments must play its role in ensuring affordable housing by imposing a certain quota for the housing development, said a parliamentarian

KOTA KINABALU : Low-earning Malaysians are ina  pitiful state when it comes to affordable housing.

According to Urban Wellbeing and Local Government Minister Abdul Rahman Dahlan, developers don’t care that 80% of Malaysian households are earning below RM6,954 per month and are in dire need of affordable housing.

He said based on the current loan repayment requirement and teh base lending rate (BLR) of 6.6% this group of households can only afford houses costing less than RM300,000.

“Using this yardstick for affordable houses price, developers should focus their housing development to cater for the needs of this 80 percent of the households.

“However, the 2012 NAPIC (National Property Information Centre Report states that only 31.7 percent of all new housing units launched were priced below RM250,000.

“This shows that there is imbalance between the demand and supply of houses towards the right target group in Malaysia,” he pointed out.

He added that there exists a serious gap of about 40 percent between the provision of affordable housing below RM300,000 compared with the demand.

He also lamented about the rising prices of houses in Malaysia and especially in his home state Sabah.

“House prices in Malaysia and in Sabah too have been rising too rapidly. As a result of these rapid price increase, house prices in Sabah have now become the second most expensive in Malaysia.

“The average house price in Sabah is now at RM382,160 per unit.

Quotas not enforced

“Of greater concern is the fact that income growth has not been keeping in-tandem with this increase in house prices,” he said recently.

“State governments also must play their roles in provision of affordable housing by imposing a certain quota for the housing development.

“Currently, most of the state governments only impose a low-cost housing quota for housing projects and in many instances even these are not strictly enforced,” he said.

According to Abdul Rahman, besides that, state governments must also determine the actual needs and demand for affordable housing.

“This can done through systematic registration and having a specific database to conduct a thorough demand and supply analysis at the state level,” he stressed.

Abdul Rahman, who is also the MP for Kota Belud, also shared  that the average house price increases in Malaysia have hovered between 9.96 percent and 12.3 percent annually, while in Sabah the price increases were 8.05 percent in 2011 and 13.11 percent in 2012.

“In Sabah, where there is ample land, house prices should not be rising at such a rapid pace,” he said.

Meanwhile Sabah Housing and Real Estate Developers Association (SHAREDA) president Francis Goh was firm when he said private developers depended solely on market forces as they received “no guarantees” from the government.

“SHAREDA together with the other affordable home providers’ prime concern lies on the market demand.

“We are constantly exposed to volatile market risks, which are not cushioned by the government by means of government buy-back guarantee,” Goh bluntly said.