Enforcing Tenancy Protection Will Make Rental Housing Market Viable: Bank Negara

Enforcing Tenancy Protection Will Make Rental Housing Market Viable: Bank Negara

PETALING JAYA, APRIL 5: Enforcement of tenancy protection will work to develop the rental housing market into a viable option instead of a last resort, according to Bank Negara Malaysia’s (BNM) Annual Report 2016.

In addition to developing the rental housing market, BNM also recommends increasing supply and reducing cost of affordable housing; establishing a central repository to monitor and manage demand and supply; and diversifying sources of financing through innovative financing schemes.

According to the report, the increase in house prices has outstripped the rise in income levels since 2012 and, as a result, prevailing median house prices are beyond the reach of most Malaysians today.

“This is primarily attributable to a gross mismatch between housing supply and demand amid diverging expectations between households and developers. The issue has been compounded by the fact that the distribution of new housing supply has been concentrated in the higher-priced categories. The undersupply of housing is particularly acute in the affordable housing segment,” it said.

BNM warned that the deficit of affordable housing (priced between RM248,000 and RM261,000) could exceed one million units by 2020 as the housing market has not provided enough supply of affordable housing for lower and middle-income households, despite efforts by the state and federal governments via multiple programmes.

The supply shortfall was mainly due to the imbalances in supply and demand, which worsened between 2012 and 2014. The shortfall was exacerbated by the slower increase in household incomes (12.4%) relative to the rise in house prices (17.6%).

While demand for affordable housing had supported the expansion in end-financing by banks for residential property purchase, loan rejection rates for housing loan applications fell to 23.6% in 2016. – The Sun

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