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Showing posts with label Housing. Show all posts
Showing posts with label Housing. Show all posts

Tuesday, January 30, 2024

Owning a home beyond reach of most millennials (Poll Inside)

It makes more sense to buy than rent, says an academic who was involved in the Universiti Putra Malaysia study. — Photos: Filepic

Public university study shows majority prioritise buying cars, prefer to rent homes near workplace

FINANCIAL reasons continue to keep young Malaysians living in major cities from realising their dream of owning a home.

Among the younger generation, the major concern is high property prices that are many times more than their annual household income.

It is not easy for those with no fixed income or low salary to secure a housing loan.

While money issues are already weighing heavily on people’s minds, the younger generation’s inability to afford a home is exacerbated by the high cost of living.

Affordable housing is often beyond the reach of millennials in Kuala Lumpur, Selangor and Putrajaya.Affordable housing is often beyond the reach of millennials in Kuala Lumpur, Selangor and Putrajaya.

Housing affordability remains a conundrum in Malaysia despite various initiatives taken by the government through the National Affordable Housing Policy.

The initiative aims to ensure housing affordability is handled in a holistic manner.

A study shows that those aged between 25 and 45 seem to be delaying the purchase of their first home.

Financial commitments

Universiti Putra Malaysia (UPM) Human Ecology Faculty lecturer Dr Mohammad Mujaheed Hassan said the study had shown that other factors also contributed to the issue.

“The Variations in Preferences of the Young Generation in Klang Valley Towards Housing Property Demand” study conducted by UPM in mid-2022 found that the younger generation had high financial commitments.

A total of 2,523 respondents aged 25 to 45 in Kuala Lumpur, Selangor and Putrajaya with individual monthly income of between RM4,360 and RM9,620 were interviewed.

The study aimed to identify this group’s financial level, in terms of their ability to save and invest as well as their financial liabilities.

Mohammad Mujaheed, who was involved in the research, said out of the total, 1,697 respondents or 67.3% were committed to monthly vehicle hire purchase instalments of between RM800 and RM1,200.

“For them, owning a car is a benchmark of their success in life,” he told Bernama.

Some millenials say it is cheaper to rent homes than buy. — BernamaSome millenials say it is cheaper to rent homes than buy. — Bernama

“Ironically, some of them take public transport to work and leave their cars at home.”

Mohammad Mujaheed, who is with the Social and Development Sciences Department, said the study also showed that 1,833 respondents or 72.7% had credit card commitments with at least two banks.

“To the younger generation, having a credit card is an alternative for them to have regular access to credit and as a cash advance.

“The study also reveals that 843 (33.4%) of respondents were renting a home for between RM500 and RM1,200 a month,” he said, adding that 73.9% of respondents had no disposable income for savings or investment.

Option image
POLL: Do you prioritise buying a car or owning a home?

Mohammad Mujaheed said based on the study, the younger generation preferred to rent due to several factors, although they could afford to buy their own home based on the monthly rental they had been paying for years.

“They argue that the location of the house that they can afford to pay for is far from their workplace.

“They have to factor in other payments linked to owning a property such as assessment tax and maintenance fees and higher fuel consumption that will further add to their financial burden.

Many people surveyed say affordable housing is too far from their workplaces.Many people surveyed say affordable housing is too far from their workplaces.

“By renting, they only have to fork out for rent and utility bills.

“They say their rented houses are only for rest and sleep.

“Much of the time is spent outside their house and at work.”

At the same time, some millennials are tied to personal loans, among others to fund their wedding, while others are caught in the credit card debt trap.

This situation is not surprising as the Credit Counselling and Debt Management Agency (AKPK) had earlier highlighted that the majority cases of youths declared bankrupt in the country was due to credit card debt.

Worrying trend

Mohammad Mujaheed said the tendency for young adults to not prioritise home ownership had caused many to be saddled with longstanding debt, preventing them from buying a house despite getting older.

“The situation is rather serious and has contributed to many being blacklisted by financial agencies, living in debt, declared bankrupt and encountering problems such as stress and borrowing from illegal moneylenders or ‘ah long’,” he said.

He said while it was not wrong for the younger generation to own a vehicle or apply for personal loan, they should give priority to home ownership as it was an asset.

Vehicles, meanwhile, depreciate in value annually.

“The value of a house will appreciate every year.

Millennials may opt to purchase a car as a benchmark of their success.Millennials may opt to purchase a car as a benchmark of their success.

“By paying monthly rental, it appears that we are ‘helping’ the owner to settle his housing loan repayment,” said Mohammad Mujaheed.

He said if the problem persisted, young adults would continue to delay purchase of their home to meet other needs.

It is feared that they will not be able to own their own house in future given the consistent upward trajectory in residential property prices.

“The younger generation should no longer adopt a wait-and-see attitude.

“The longer they wait, the higher the price, given that the growth of household income is not at par with the increase in house prices.

Youths who do not pay their credit card bills on time will find it tougher to get a housing loan.Youths who do not pay their credit card bills on time will find it tougher to get a housing loan.

What was worrying, he added, was this group ending up “homeless” when they reached their golden years.

On the possibility that this group would “share” a home with their parents or other family members, Mohammad Mujaheed said this could only be realised if their parents owned property.

“Otherwise, a family will be faced with the possibility of being homeless or continue to rent permanently (from one generation to the next) as they do not own any property.”

He said the younger generation should not use high property prices as an excuse for not buying a house as there were affordable home schemes offered by the federal and state government such as Rumah Selangorku, Federal Territory Affordable Housing Programme and Malaysia Civil Servants Housing Programme.

Affordability gap

Universiti Teknologi Mara (UiTM) Seri Iskandar senior lecturer Dr Azizul Azli said the huge gap between income levels and house prices had prevented the younger generation from owning a house.

“For example, average annual salary increments are about 2% while property values increase between 6% and 8% each year.

“Imagine, in only two years, property prices would have risen by 12% and salaries increased by 4%.

“Despite price fluctuations in the post-pandemic property market, prospective buyers are still not able to ‘catch up’ as their income is still at minimum level,” he said.

As an example, he said the average starting salary for fresh university graduates was around RM2,500 a month.

If they bought a house worth RM300,000, their monthly financial commitment would be about RM1,500, he said, adding that this was not viable with the escalating cost of living factored in.

An academic says double-storey houses are popular with developers as they take up less land.An academic says double-storey houses are popular with developers as they take up less land.

Azizul, who is with UiTM’s Architecture, Planning and Survey Faculty, urged the government to play a more effective role in helping youths own their first home at a younger age.

Among others, incentives should be given to developers to build more landed property so that units can be sold at lower prices.

“We still have an abundance of land that developers can build on,” he said.

“However, they (developers) prefer double-storey houses as this involves smaller built-up areas.”

Azizul said Indonesia had undertaken measures to build affordable landed homes for the younger generation.

“Various house sizes at affordable prices are offered, and if converted to our currency, prices are below RM100,000.”

He said the current practice of allowing developers to provide basic amenities at housing areas had contributed to the hike in house prices.

To reduce costs, he said the government could take over construction of such facilities in addition to providing subsidies for building materials.

“At the same time, there is also a need to reduce red tape as this has also contributed to higher construction costs, causing developers to inflate their selling prices,” he added.

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Related posts:

Young adults in developed countries rent, we buy for good


While young adults all over the world are renting homes, Malaysias prefer to own homes as soon as they get their first pay cheque.

Instead of blowing their cash on pricey gadgets, young Malaysians are saving up for their first home.


Friday, December 29, 2023

Tenants’ misdeeds not property owners' fault

Leasing ­is serious business: An aerial view of a residential area in Ampang, Kuala Lumpur. — GLENN GUAN/The Star


PETALING JAYA: Making landlords fully liable for their tenants is an infringement of fundamental liberties under the Federal Constitution, say property owners’ groups.

While a tenancy agreement must be in place to state the tenancy purpose and rights to terminate it, they said the proposed Residential Tenancy Act (RTA) must address all issues affecting both landlords and tenants.

Strata Owners Association Malaysia chairman Datuk Theng Book said it was unfair to put full responsibility on the landlord alone.

“Firstly, how would the landlord know if the tenant is a criminal? It is against the freedom of contract and Constitution to deal with our own property,” he said in an interview recently.

Theng, who is a lawyer, said landlords must have a tenancy agreement to spell out the purposes of the tenancy and rights to terminate it upon breaches, such as when tenants conduct illegal activities on the property.

“Or landlords can lodge a police report. The police must act,” he said.

When asked if a tenancy agreement was enough to safeguard landlords and tenants, he said it was as much as landlords can do.

“What else can landlords do? The police cannot pass their responsibility to landlords. It’s their job to go after criminals,” he said.

When asked further about the RTA, Theng said it should address the concerns of liberties being infringed while it is being drafted.

Senior lawyer Datuk Joy Appukuttan agreed, saying that the fundamental liberties under Article 5(1) of the Constitution, as well as equality before the law and protection under Article 8(1), would be infringed if the landlords are made absolutely liable for their tenants.

“The proposed RTA should be fair and address all issues affecting both landlord and tenants,” he said.

Joy, who is also Strata Property Owners Association Selangor legal adviser, said landlords could only provide stricter contractual terms in the tenancy agreement, which still boils down to enforceability.

“If the landlord knowingly allows his premises to be used for illegal purposes, then perhaps there is a case. If not, we can’t blame the landlord alone,” he added.

However, he also said the RTA was a move in the right direction.

“Many countries have such laws. However, the RTA must also provide a tribunal for adjudication of disputes between landlord and tenant.

“It is similar to the set-up of the Housing Tribunal and Strata Management Tribunal,” he said.

Joy said the tribunal could provide a swift form of remedy for landlord and tenant disputes.

“Such tribunals will be able to act swiftly and efficiently. If the landlord and tenant can represent themselves at these tribunals, then the cost would be lower.

“The current process of going to court is tedious, time consuming and costly,” he added.



Related:

https://www.edgeprop.my/content/property-owners-should-not-be-held-responsible-tenants%E2%80%99-wrongdoings

https://www.baymgmtgroup.com/blog/7-actionable-tips-for-dealing-with-terrible-tenants/


Related posts:

Tenancy tales of horror, Cops may go after landlords who rent units to criminals; owners had the right to do monthly inspection, Law needed to lay out rights, responsibilities




Sunday, September 25, 2022

Steady residential property sector and positive 1H property market data trends, Malaysia

  


Market spurred by latent demand post pandemic

 

“Residential property transaction volume and values are up year-on year in 1H22.” Datuk Siders Sittampalam >>
SINCE the resumption of economic activities and reopening of international borders, the residential property market has seen a pick-up in activity.

According to the National Property Information Centre (Napic), the residential property sector recorded 116,178 transactions worth Rm45.62bil in the first half of 2022 (1H22), which was an increase of 26.3% in volume and 32.2% in value year-on-year.

However, in light of prevailing uncertainties such as the upcoming Budget 2023, potential 15th General Election and macroeconomic headwinds, can the steady trend so far be sustained for the remainder of 2022?

PPC International managing director Datuk Siders Sittampalam says it’s “anyone’s guess” how the local residential property market will fare for the remainder of this year.

“With plenty going on such as the looming elections and global economic uncertainty, it could have an indirect effect on the property market,” he tells Starbizweek.

Still, Siders says the residential sub-sector has been off to a good start this year.

“Residential property transaction volume and values are up year-onyear in 1H22 and it’s been the highest increase since 2016.

“This can be attributed to latent demand, post pandemic. Many that held back purchases in the market are now back again (since January 2022),” he says.

Siders adds that loan approvals have also picked up, adding however that approval rates are still below pre-pandemic levels.

He also points out that the increase in interest rates so far this year has not had an impact on the market (in terms of demand).

“Going forward, I believe that volume and values should sustain, just like how they were in the first half of this year. It will be steady, barring unforeseen factors, be it domestically or externally.”

According to Napic, the property market performance recorded a rebound in 1H22, a reflection of normalising economic activity as the country moved towards endemicity.

“With the positive projection on economic growth by Bank Negara (at between 5.3% and 6.3% in 2022), supported by the implementation of various government initiatives and assistance, the property market performance is expected to be on track.”

Meanwhile, CBRE|WTW in its property market performance for 1H22, believes that moving forward, transactional activities should remain resilient in locations with good accessibility and comprehensive amenities.

“Developers are anticipated to remain prudent, focusing on established townships and mature locations. In addition, upcoming launches would see a shift towards more sustainable elements to meet buyers’ shift for cost-efficient and eco-friendly homes.”

As at the first quarter of 2022, CBRE|WTW says the Klang Valley landed residential sector remained encouraging.

“Average transacted prices rose 6.8% year-on-year while transacted volume increased 11.2% year-onyear (more than 9,100 units), but was less than the 10,000 units transacted in the fourth quarter of 2021.”

CBRE|WTW says new launches picked up slightly in the second quarter, despite developers maintaining a cautious approach.

“Landed launches continue to perform well and launch prices of terraced houses remained between RM500,000 and RM800,000, except for some priced above the Rm1mil mark in the City of Elmina, Setia Eco Templer and KL East.”

Meanwhile, locations such as Klang Valley South, such as Sepang, Salak Tinggi and Kuala Langat remain the hotspots, says CBRE|WTW.

It says these locations recorded consistent growth, encouraged by industrialisation and good road accessibility.

“Several areas located in the north of Klang Valley are also hotspots of new launches, typically in Rawang, Puncak Alam and Sungai Buloh.”

As for high-rise residential units, Siders says a market study needs to be conducted to ease the oversupply of such properties.

“Comparatively, landed properties tend to do well as there’s always demand,” he says.

Siders also believes that the government could consider bringing back the Home Ownership Campaign (HOC) to spur the market.

To help drive the sector, the government introduced the HOC in June 2020 under the Penjana initiative.

The campaign ended on Dec 31, 2021. Many industry observers and property players believed that the HOC was a huge help to the market and urged the government to extend the campaign period into 2022.

Meanwhile, CBRE|WTW says additional measures are still required to improve market activities for the high-rise residential sub-sector.

“The waiver of stamp duty should continue. A continual increase of the overnight policy rate (OPR) is expected in 2H22 amid the global high-cost environment.

“Since project launches have been limited, competition would also not intensify, with prices remaining stagnant. The cost of borrowing may further impact demand and prices if there is an additional OPR hike 2H22.”

CBRE|WTW adds that the upcoming launch of Mass Rapid Transit 3 may benefit property valuers along the route, including an increase in project launches, particularly in Mont Kiara.

“Moving forward, developers may shift focus to offerings emphasising exclusivity and low-density living with better facilities.”

CBRE|WTW says the existing supply of high-rise residential units stood at 68,555 units in 1H22, whilst 219,398 units are in the pipeline for completion by 2024.

“The bulk of incoming supply will be in central Kuala Lumpur, namely the golden triangle area (30%).”

On market activity, CBRE|WTW says both the average transacted value and asking rents are stable at RM779 per sq ft and RM3.80 per sq ft, respectively, supported by the increased interest from homebuyers and renters.

“The average occupancy rate also increased slightly to 64% due to improved market conditions. Following that, project launches have been limited and the focus is still on the sales of ongoing projects.

“Nonetheless, two transit-oriented development projects were launched in 1H22 in Pudu and Bukit Damansara, with unit sizes ranging from 480 sq ft to 1,080 sq ft priced from RM360,000 and units sized from 1,001 sq ft priced from Rm1.8mil and above.”

According to Napic, Penang, Kuala Lumpur, Johor and Selangor formed about 47% of the total national residential volume in 1H22.

“More than 10,000 units of new launches were recorded, down by 66.7% against 31,687 units in 1H21.”

Against 2H21, the new launches were lower by 13.3% (2H21: 12,173 units),” it says.

“Sales performance for new launches stood at 20.3%, slightly lower than 1H21 (20.6%) and 2H21 (28.1%).”

According to Napic, Johor recorded the highest number of new launches in the country, capturing nearly 23.8% (2,509 units) of the national total with sales performance at 31.8%.

Sabah recorded the second highest number (1,335 units, 12.7% share) with sales performance at 10.6%. This was followed by Perak (1,317 units, 12.5% share) with sales performance at 19.4%.

Terraced houses dominated the new launches. Single storey (2,047 units) and two-to-three storey (5,150 units) together contributed 68.2% of the total units with sales performance at 22%, followed by condominium / apartment units at 19% share (2,009 units) with sales performance at 12.4%. 

  • By eu.ene MAHALIN.AM eugenicz@thestar.com.my

 

Positive 1H property market data trends

 

THE recently released property market data for the first half of 2022 (1H22) by the National Property Information Centre (Napic) showed that the Malaysian property market has found a firmer footing over the review period.

On a half-yearly basis, while transaction volume and value surged to a new record high of 188,002 units worth Rm84.4bil, what was most revealing is that the overhang market trend has finally eased, while future and planned supply was reduced.

For the past four years, this column has been calling for stricter measures to control the market’s oversupply situation and for property developers to be more mindful of the market’s overhang status.

The data for the 1H22 shows that finally, some sanity has set in. 


Having said that, as far as prices are concerned, the Malaysian House Price Index (HPI), as seen in Figure 1, continues to show a declining trend with the growth in the 1H22, slowing down to just 0.5% year-on-year (y-o-y), dragged by a 2.5% y-o-y drop in Penang HPI, and in terms of segment, detached homes and high-rises continue to dictate the downtrend with a 2.3% and 0.5% y-o-y drop respectively.

An improved picture

For property overhang, this column aggregates the supply in the residential segment and takes the data from both service apartments and the Soho sub-segment to gauge the market’s overall residential overhang status.

After all, it is the combination of the three that is the real market supply in the residential market segment as shown in Figure 2. 


In total, the residential overhang eased to 59,321 units valued at Rm42.59bil.

Although compared with a year ago, the number of overhang units and value increased by 3.8% and 2.5% respectively, the overhang situation for the residential segment improved as both the number of units and value dropped by 6.5% and 4.4% respectively compared with six months ago.

Nevertheless, the overhang situation within the high-rise segment (which includes residential high rise, commercial service apartments, and Soho units) remains elevated.

For the 1H22 period, Napic data showed that the overhang data is now at a new record high of 45,502 units against 44,800 units as at end of 2021.

Only in terms of value, the 1H22 figure is relatively flat at Rm33.22bil against Rm33.32bil six months ago.

Overall, this translates to 76.7% of the overall market overhang in volume and almost 78% of the total value.

The overhang situation within the high-rise segment has indeed increased as more than three out of four unsold properties are highrise units.

A steep drop

Figure 2 also shows the property market’s unsold units that are under construction.

From here, one would note that the 1H22 data showed a total of 108,826 units remained unsold valued at Rm60.95bil, down by 12.5% and 9.6% compared with a year ago, and lower by 9.7% and 6.4% when measured against the market’s position six months ago.

With the lower overhang and those under construction, overall, the market saw total unsold properties down to 168,147 units worth some Rm103.54bil.

Compared to a year ago, when the figure was 181,460 units worth Rm108.93bil, the data for 1H22 saw a drop of 7.3% in volume and 4.9% in value respectively.

When compared with the 183.918 units worth Rm109.69bil as at end of 2021, the 1H22 data showed a reduction of 6.4% in volume and 8.6% in value respectively.

For the residential segment by state, the key overhang is located in Kuala Lumpur and the states of Selangor, Johor, and Penang as they account for 59% of total overhang units worth some Rm16.2bil, which translates to 74.5% of the total overhang value in the residential segment.

In terms of price points, properties marketed at above RM500,000 account for 43.4% of the market’s overhang.

For service apartments, Johor, Selangor, and Kuala Lumpur are key geographical areas with the most overhang with a total of 96.8% of the segment’s overhang in terms of units and 97.5% in terms of value.

Johor alone accounts for 68% of the segment’s total number of units and nearly 69% of the segment’s total value at Rm13.34bil.

Interestingly, in terms of the number of units, 89% of service apartment overhang in Malaysia are priced at RM500,000 and above, valued at Rm18.36bil, and they represent 95% of the total service apartment overhang valued at Rm19.32bil. As this column has repeatedly highlighted in the past that Malaysia has a serious overhang issue, we are now finally seeing some light at the end of the tunnel as the market has now seen a drop in future supply.

For easy reference, the data in Figure 3 for future supply includes starts, incoming supply, planned supply, and planned new supply. 


Overall, other than a 34% jump in purpose-built office space to 2.59 million sq m, all other segments are seeing a downtrend in future supply with a reduction in the total number of units by between 8.1% for the industrial segment to as much as 26.2% in future hotel room supplies. The residential, service apartments and the Soho segment saw a reduction of 16.3% in the total number of units to 1.196mil units from 1.430mil units six months ago.

As a percentage of total in-stock, the future supply is lower by between 0.8 percentage points (pps) for the industrial segment to 21.1 pps for the residential segment.

A word of caution though. Despite the reduction in future supplies, the incoming supply for both the service apartment segment and Soho remains significant at 104.4% and 92.8% respectively.

Despite the positives, the property market remains challenging as we are still saddled with a high overhang as well as incoming supply. While the positives are there based on the 1H22 data, it is not time to pop the champagne just yet as it will still take a while (three to five years) for a more positive trend to emerge.

Overall, the Malaysian property market is still up against a massive over-supply situation and prices too are not expected to improve much, as evident from the flattish growth or worse, negative, in the Malaysian HPI.

Given the higher borrowing cost with an increase in the overnight policy rate, homebuyers are expected to remain cautious.   

  StarBiz PANKAJ U. KUMAR 

 

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House prices down in 2Q, Penang residential market picking up pace

 

  PETALING JAYA: House prices in Malaysia fell in the second quarter of 2022 (2Q22), marking the worst quarterly contraction since the star

 


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Saturday, November 21, 2020

RCEP to boost our property market

RCEP will promote and facilitate international trade among the 15 participating countries in the Asia-Pacific region and the expected increase in free trade will have a significant impact on the Malaysian property market. -NST/file pic.

The signing of the Regional Comprehensive Economic Partnership (RCEP) signifies the world's largest trade agreement and will contribute towards sustaining Malaysia as a preferred trading hub and investment destination.

RCEP will promote and facilitate international trade among the 15 participating countries in the Asia-Pacific region and the expected increase in free trade will have a significant impact on the Malaysian property market.

Higher trade and economic activities will impact on the occupation, investment and development sectors of the property market. Real estate space is a local input in the production and supply of goods and services. Increased exports lead to the expansion of domestic production.

Increased domestic production increases the demand for industrial space. Imports also have an impact on demand for real estate space. Goods imported need to be stored and distributed through warehouses and logistic properties.

These goods are then displayed and marketed at various outlets points thereby increasing the demand for retail spaces in retail malls.

Regional trading bloc and trade liberalisation will encourage foreign direct investments (FDI). These FDIs will create demand for industrial land and buildings. New capital investments will spur demand for more financing activities from the banks.

Once the plants and machines are in operations, it will create employment and demand on other factors of production. Higher economic growth will drive the capital market which will attract more foreign investment fund flows investing into local equities.

With increased economic activities, occupation demand for real estate space will cause rental increase. With inelastic new supply, potential future rental growth and prospective capital appreciation, investors will start to invest in real estate leading to an active investment market with the more participation from the institutional investors.

Developers will react to prevailing rents and capital values when they appear to signal a profitable opportunity. If prices rise, more developers will respond to these signals, the aggregate flow of supply into the market increases.

These new spaces will meet the requirements of the occupiers and investors e.g. floor plate size, specification and network connectivity requirements

Real estate service providers such as property consultants played an important role in the whole process by aligning their service standards to the requirements of the regional and global clients.

It is envisioned that the RCEP will open up markets and help in the recovery post Covid-19 pandemic. With increased economic activities, it will give rise to more derived demand for various real estate spaces thereby leading to an improved property market performance in the future.

DR. TING KIEN HWA

Professor of Property Investment

Centre of Real Estate Studies

Faculty of Architecture, Planning & Surveying

Universiti Teknologi MARA


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Tuesday, September 24, 2019

Home Is Where The Heart Is

https://youtu.be/a_B80AIQegE

Harking after a home: Officials have acknowledged that the lack of affordable housing is one of the issues that sparked the unrest in Hong Kong, which has been going on for months. — AFP
Owning a house is the standard ambition of any individual, however, getting there is increasingly becoming not only a local, but global struggle.

THERE’S a lesson to be learnt from the protests in Hong Kong – politics is about selling hope. So if the young people living in a depressing environment feel they have no future, then the alarm bells should ring loudly.

In the case of Hong Kong, the leaders – mostly technocrats and government officials – didn’t see it coming, or maybe they were just indifferent.

Many young people in Hong Kong feel they stand no chance of becoming a homeowner in their lifetime, and officials have acknow-ledged that the issue is one of the causes that sparked off the unrest.

The controversial Extradition Bill, which allows a Hong Kong resident to be sent to mainland China to face trial, was merely a catalyst. Those protesters couldn’t all possibly believe they’d fall on the wrong side of the law and face the consequences, could they?

Last week, former Hong Kong chief executive Leong Chun-ying was in Kuala Lumpur for appointments with businessmen, opinion leaders and officials, to update them on developments on the island.

I was among the lucky Malaysians picked to hear his thoughts and views on Hong Kong, while he, too, listened to our concerns during the two-hour closed-door meeting.

My co-host and meeting organiser, Datuk Seri Azman Ujang, and I both feel that of all the problems faced by any country in nation- building, none deserves greater priority than housing the people.

What expectation could be more basic than having a roof over our heads, and with it being a decent and affordable one at that? And when we talk about affordable, it should be truly attainable by the low-income people who form the bulk of the population in most countries.

Azman, the Bernama chairman, rightly outlined the consequences of the failure that stems from a lack of will in resolving the housing problem of the masses. And as he said, this could easily lead to people pouring into the streets protesting issues not even directly related to housing.

It’s a fact that many poor Hong Kong people live in a room less than 75sq ft, and millions live in deplorable conditions.

More recently, “nano” flats – tiny apartments less than 200sq ft – have fast become the norm in overcrowded Hong Kong.

According to a South China Morning Post report, the cost began at HK$2.85mil (RM1.52mil) for an apartment no bigger than an average Hong Kong car park space, but the lack of interest forced a rethink by the developer.

But what’s mind-boggling is that while there are plenty of poor people in Hong Kong, or many who feel poor, Hong Kong’s fiscal reserves stood at HK$1.16tril (RM620bil) as at the end of January.

In a report, Financial Services and the Treasury Bureau said there was a surplus of HK$86.8bil (RM46.2bil), bringing the cumulative year-to-date surplus up to HK$59bil (RM31bil).

All this wealth belongs to Hong Kong and not mainland China, so a lot can be done with that money for a population of just seven million people, especially low-cost housing!

In comparison, Malaysia’s official reserve assets amounted to US$102.03bil (RM425bil) as at end November 2018, while other foreign currency assets stood at US$51.6mil (RM215mil) for the same period, Bank Negara said. Malaysia has a population of 32 million.

It can’t be denied that Singapore has done well in housing its population, with over 90% of the seven million population reportedly living in homes of their own, and the home-ownership ratio is said to be the world’s highest.

The Singapore Housing Development Board (HDB) deserves global recognition for its feat in solving the housing problem of the people, especially the poor.

The middle-class and poor must be able to have a roof over their heads. That’s an essential human need. No country can have peace and stability if the poor are not able to own a home in their lifetime.

A prosperous and satisfied middle-class will lead to political stability. A huge middle class will also mean greater purchasing power, and this will lead to a better economy with spillover effects for everyone.

When there are angry citizens protesting everything from the escalating food prices to housing, then even the elite (including politicians and businessmen) will not feel safe. In South Africa, the rich live in houses with high walls and electric fences to protect themselves, but that’s not the best way to live. It’s living dangerously.

Malaysian politicians who still wield the race and religion card will realise that at some point, these will be “dead issues”.

With well-documented shrinking numbers, the Chinese and Indian population will no longer be the proverbial bogeymen in the future. Instead, it is class stratification that will be a matter of concern.

Last year, it was reported that the gap in income between the rich, middle class and poor in Malaysia had widened since 2008, according to a study by Khazanah Research Institute (KRI).

In its “The State of Households 2018” report, the research outfit of sovereign wealth fund Khazanah Nasional Bhd noted that the gap in the real average income between the top 20% households (T20) and the middle 40% (M40) and bottom 40% (B40) households had almost doubled, compared to two decades ago.

The report, titled Different Realities, pointed out that while previous economic crises, in 1987 and the 1997/98 Asian Financial Crisis, saw a reduction in the income gap between the T20 and B40/M40, post-2008/09 Global Financial Crisis (GFC), those disparities had not reduced.

But the Gini coefficient, which measures income inequality in the country, had declined from 0.513 in 1970 to 0.399 in 2016, denoting improvement in income inequality in Malaysia over the past 46 years.

Explaining the phenomenon, Allen Ng, who is the lead author of the KRI report, said income of the T20 households had continued to grow, albeit at a slower pace than that of the M40 and B40 since 2010.

“However, because they (the T20) started at a higher base, the income gap between the T20 and M40/B40 had continued to grow despite the fact that the relative (income growth) is actually narrowing post-GFC, ” Ng explained at a press conference after the launch of the report yesterday.

In his bestselling book The Colour Of Inequality: Ethnicity, Class, Income And Wealth In Malaysia (2014), economist Dr Muhammed Abdul Khalid wrote that “the future does not look rosy for Malaysia; the current policies are encouraging wealth disparity between rich and poor, and between ethnicities.

“Unless bold and drastic actions are taken urgently, a harmonious future for Malaysia is uncertain. There must be an urgency to give every Malaysian economic security, a better and sustainable future.”

Muhammed, the managing director of the research and consulting firm DM Analytics Malaysia, said last year that contrary to popular belief, most Chinese (70%) are wage-earners, as are most Malays (72%). In fact, the poverty gap between races has dropped compared to 40 years ago, though the disparity remains.

And what about Malaysia? We have a disastrous, if not scandalous, record, particularly the pathetic business activities, dealings and performance of the 1Malaysia People’s Housing Programme’s (PR1MA) set up to build affordable homes.

More than RM8bil has gone up in smoke because PR1MA’s management failed to meet its targets, despite all the assistance and facilities accorded to their projects by the previous federal government and most state governments.

PR1MA reportedly built only 11,000 homes, compared with its target of half a million residential units to be delivered by the end of 2018. That’s less than 5% of the original plan.

PR1MA Malaysia was set up to plan, develop, construct and maintain high-quality housing with lifestyle concepts for middle-income households in key urban centres. Its homes are priced between RM100,000 and RM400,000.

PR1MA is open to all Malaysians with a monthly household income of RM2,500 to RM15,000.

A total of 1.42 million people registered for PR1MA, a promise of one million homes by 2020, but only 16,682 units, or 1.6%, of the target, were completed between 2013 and 2018, costing the government billions in public funds.

Poor management, exorbitant land acquisition costs and unsuitable sites have turned the people’s housing project into a major financial flop. PR1MA’s failure, which could cost the new government billions, is apparently already saddled with ballooning debts, rendering the loss-making company untenable.

It’s the responsibility of the government to build affordable homes – not the private developers. Private developers, especially those who helm public listed companies, have profits and dividends to answer for to shareholders. They are in the business of making money, and with the expensive land bank they have acquired, they need to build expensive homes, too.

Even if there are requirements with the obligated mixed homes for social housing needs, it still won’t resolve the problems.

Our politicians shouldn’t pass their responsibilities to them. They just need to have qualified and competent professionals with integrity to run a set-up like HDB. Obviously, the people who ran PR1MA didn’t do their jobs. We can help Malaysians own homes, or at least rent them at affordable rates, if we’re truly committed. The question is, are we?

As for Hong Kong, there is another lesson the young protesters need to learn: a full democracy doesn’t guarantee you a home and a decent job. Just ask the homeless in the United States and Britain.

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