KUALA LUMPUR: The government’s affordable homes scheme, the 1Malaysia People’s Housing Programme (PR1MA) has failed to meet the demand for affordable homes, said REI International Holding Sdn Bhd CEO Dr Daniele Gambero.
“PR1MA is a total failure. It is not delivering homes at the right value in the right places. The government, the developers and the market are not happy about it,” he said at the Outlook Forum 2016 yesterday.
Armani Media Sdn Bhd managing director K.K. Chua concurred, saying that only 10% of the 500,000 units targeted have been approved.
“PR1MA target is 500,000 homes by 2020 and 72 projects have been approved, which can only deliver 50,000 units. That is only 10% of the set target. Of the 50,000 units approved, none have been delivered and we don’t know when they will be delivered,” he said.
He said the main issue with the programme is the location of the projects, which are “far-flung”.
According to Gambero, PR1MA is just the tip of the iceberg as there are many other schemes for affordable housing in Malaysia. “Why not unify them under one name, one minister – International Trade and Industry Ministry or Finance Ministry – and just have one entity in charge of it.
“In terms of figures, the numbers in the last three Budgets are ridiculous. If we consider that all developers in Malaysia cannot deliver more than 160,000 homes a year (based on Rehda statistics), how can the government or agencies promise 500,000, 600,000 or 700,000 units?” he questioned.
He said under Budgets 2014, 2015 and 2016, a total of 800,000 homes have been promised, of which less than 25,000 have actually been launched. “It’s time for the government to look seriously at this issue in a proactive way,” he added.
However, Andaman Property Management Sdn Bhd managing director Datuk Seri Dr Vincent Tiew said PR1MA is a good programme but lacks communication. “There are projects that are actually built in very prime areas but I think PR1MA lacks communication, of consistently sharing information and creating awareness with the public.”
He highlighted two concerns – the questionable approval of many units in areas with low population and the segregation of allotments in such projects.
He said some PR1MA projects with up to 6,000 units have been approved in areas with a population of less than 20,000, just to meet the numbers. It is also unclear whether or not the bumiputra quota still applies to PR1MA.
“PR1MA is a good thing to do. But as they moved along, PR1MA suddenly realised that the funds to buy land and build are getting tougher to get, almost impossible. So they changed the style to joint venture, to deliver the numbers.”
Meanwhile, Smart Financing CEO Gary Chua expects the property market to remain soft, if not worse, in 2016 as financing gets tougher for both developers and home buyers.
According to him, approval rates of home loans continued to trend downwards from 65% and above some seven to eight years ago compared with 53% in the first quarter of 2015 and less than 50% now. As of last quarter, the approval rates were 47% for residential loans and 41% for commercial loans. It is tougher to get financing now,” he said.
He said homes are becoming more unaffordable as prices have increased but salaries are not catching up with prices while banks have become more stringent on the lower income group.
He said the statutory reserve requirement, which is now at 4%, could be improved to 2% or 3%, in order to improve the liquidity of banks and their ability to give out loans.
He added that 2016 will be full of opportunities to find good properties at good prices before the market turns again but buyers and investors must be prepared and plan early.