1.
0 INTRODUCTION
1.1 Introduction to Malaysian National Housing Policy
According to (Leng, 2019), housing is so deeply entwined in a country's economic, social,
and political spheres that it can't be studied in isolation from the larger spectrum of
governance and policy. It has multiple significance in addition to being a tremendously
valuable asset as it plays an important role in speeding economic growth and it has social
relevance as a spatial center of personal and familial life.
Increase in population, along with fast development, has resulted in a rise in property costs
in many cities, particularly in emerging nations such as Malaysia. The emergence of nuclear
families as opposed to extended families as a result of economic progress has aided this.
Furthermore, increased migration, shifting patterns of population economic status, shifting
expectations, and deterioration of existing stock have resulted in a significant lack of
affordable housing, as mentioned by (Leng, 2019).
Therefore, Malaysia has introduced its very own National Housing Policy which is also
known as ‘Dasar Perumahan Negara (DRN)’ in Malay. Housing policies and schemes are
stressed in Malaysia's national housing policy, which is defined in the country's development
plan, which is changed each five years. According to (Tan, 2019), the government has
developed numerous plans and initiatives, enacted required legislation, and formed public
organizations and tools to help the housing industry in order to achieve the goal of national
housing policy.
According to (Government, Disember), the national policies are regularly reviewed and
updated to address issues and current development challenges. Given that the National
Housing Policy (NRP) 2013-2017 has expired its implementation period, the Ministry of
Housing and Local Government (KPKT) has re -evaluated the existing DRN to identify gaps
to be used as a basis in outlining policies and strategies new for DRN (2018-2025).
The year of the beginning of the implementation set out under the Action Plan DRN (2018-
2025) is as follows:
Time Frame
Year
Implementation
Short Term Period 2018-2020
Mid Term Period 2021-2023
Long Term
2024-2025
Period
Figure 1.1 Time Frame Implementation and Year of the DRN (2018-2025).
1.2 Definition of Malaysian National Housing Policy (DRN 2018-2025)
According to (Tan, 2019), the Malaysian National Housing Policy (DRN 2018-2025) intends
to describe policies and action plans for the period 2018-2025, taking existing housing
concerns into account. It functions as an internal national framework for housing
development at the federal and state levels, as well as a catalyst for systematic housing
provision based on housing demand and needs. In order to ensure economically feasible
township and conurbation growth, a comprehensive housing strategy that is in accordance
with current demands is required.
The DRN (2018-2025) was also introduced to address the issues and challenges faced by
the industry housing nowadays. These complex and challenging issues require a solution
efficient to ensure the healthy and sustainable growth of the country's housing industry.
Thus, for realizing the goals and objectives of DRN (2018-2025), an action plan has been
drawn up for outline strategic measures in line with the goals and focus of the National
Housing Policy, as mentioned by (Tan, 2019).
Comprehensive housing policy and in accordance with current requirements is absolutely
necessary in ensuring urban development and viable conurbation in terms of economy.
Strategies and action plans which is framed holistic in nature meet needs as well as care the
welfare of the people in addition to fulfilling state housing industry.
1.3 Goals of Malaysian National Housing Policy
The goal of DRN (2018-2025) is to guide the country’s housing sector with emphasizes
systematic, quality, inclusive housing planning, development and management, efficient and
affordable by the people to generate sustainable and livable habitats, according to (Tan,
2019). The aim of the National Housing Policy is also concentrating on addressing the
country's supply and demand imbalance and assisting low-income individuals in purchasing
a property.
Strategies and action plans are holistic in meeting the needs and caring welfare of the
people in addition to meeting the country's housing industry. Implementation and monitoring
of DRN (2018-2025) is important to address current housing issues as well as a proactive
measure and comprehensive for the Federal Government to achieve the aspirations of a
sustainable housing industry on future, as mentioned by (Leng, 2019).
According to (Government, Disember), the National Housing Policy, which was first
implemented in 1957, has been revised four times since then to address various difficulties.
It has now been re-evaluated in light of the present problem of assisting Malaysians in
owning a home without breaking the bank. Since independence, each phase of housing
construction has been directly linked to the country's social, political, and economic status. In
light of this circumstance, Malaysian housing policies and initiatives are unique in terms of
meeting the country's present demands. Many other developing countries frequently cite
Malaysia's performance and achievements in housing schemes after independence.
5.2 ISSUE 2
Mismatch Between Supply and Demand of House According to Location
According to (Tobi, 2020), the supply of affordable housing in urban areas needs to be
increased. For low-cost housing, it is seen that its supply is declining. This is likely due to a
change of approach and the government’s focus nowadays is more towards providing
affordable housing. Although however, based on the pattern of housing turnover in Malaysia,
it is found house transactions priced below RM500,000 and RM250,000 are at 98% and 91%
at 2002. However, this rate has decreased to 83% and 52% in the third quarter of 2014. In
cities, housing supply is more geared towards high-cost housing. In Penang, for example, all
housing units launched in 2016 cost more than RM250,000, with a large portion in the range
of RM500,000 to RM1,000,000.
According to research in 2017 by Bank Negara Malaysia, the housing market is becoming
more active. This rise, however, was accompanied by an increase in unsold housing units,
the majority of which were valued above RM250,000. This suggests that it may be regarded
expensive by Malaysians. One of the major hurdles for developers, according to REHDA
Institute trustee Tan Sri Eddy Chen, is "placing the appropriate product in the right place with
the right pricing to satisfy market demand." A moderate growth in median income matched
the quick development in unaffordable dwellings. A large number of these homes were also
positioned distant from economic areas and public transportation. Furthermore, in order for
all concerns relating to public housing to be adequately coordinated, there must be a single
authority that is accountable for all of them, as mentioned by (Tobi, 2020).
The figure below shows the main causes of supply and demand mismatch of housing:
OVERCROWDED
POPULATION LAND
BANK
CONSTRUCTION LOAN -
APPROACH
INTEREST
RATE
INFLATION HOUSING
RATE SUPPLIERS
Figure 5.2 Main Causes of Supply and Demand Mismatch of Housing
5.2.1 Overcrowded Population
As stated by (Tobi, 2020), although Malaysia's urban population is rising, the supply of
affordable housing is delayed due to a lack of coordination among numerous government
bodies involved in housing construction, from the federal to state and municipal levels. As a
result, many individuals who work in the city now live on the outskirts of the city. This is
consistent with the notion that people would relocate to another region where houses are
being constructed, but houses are not always constructed in the areas where people desire
to dwell.
5.2.2 Land
Land is a limited natural resource that is both precious and non-renewable. Land prices rise
as a result of the scarcity of land resources, which is reflected in the cost of housing,
particularly in big cities. This forces a developer to use limited land resources to maximize
profit and limit the availability of affordable homes in their development plan. Furthermore, as
reported by (Tobi, 2020), the increased development of office buildings and shopping malls,
particularly in large cities, has heightened the risk of commercial property overbuilding,
which might negatively affect the real estate market. Because the cost of creating a unit
rises, the price of housing will rise as well.
5.2.3 Construction Approach
BIM (Building Information Modelling) is a smart technology that combines a data-rich tool
with object-based software via a 3D virtual design platform. This BIM technique has the
potential to drastically alter the construction environment, working culture, project delivery
process, and construction workflow. It's referred to as a parametric model for exchanging
knowledge and using it to make decisions during the procurement, design, building, and
operation stages. This might be accomplished through improving interdisciplinary
construction actors' coordination, communication, and integration. This will undoubtedly
assist in lowering building costs, as mentioned by (Tobi, 2020).
5.2.4 Bank Loan – Interest Rate
According to (Tobi, 2020), the Base Landing Rate (BLR) was replaced by Base Rate (BR) in
January 2015, with the base rate no longer regulated by the National Bank of Malaysia. On
the other hand, all Malaysian banks are free to set their own BR rates using the National
Bank's methodology. The BR varies from one bank to the next based on each bank's
aptitude and efficiency in lending to their individual consumers. This increases the bank's
transparency in conducting banking activities, allowing clients to make better financial
decisions based on their needs. As a result, interest rates have an impact on capital
availability and investment demand. These financial transactions have an impact on property
supply and demand, as well as on property prices.
5.2.5 Inflation Rate
In the framework of the economy, inflation affects the buyer's purchasing power. Houses,
like physical goods, are not immune to the impacts of inflation brought on by a country's
economic conditions, as stated by (Tobi, 2020). As a result, each increase in inflation
decreases the amount of housing available by hundreds of actual payments on a long-term
fixed-rate mortgage. It should be mentioned that, given the current global situation, boosting
the money supply generates inflation and increases housing costs.
5.2.6 Housing Suppliers
Suppliers in the housing supply environment come from two institutions: the government and
private developers. PR1MA, RUMAWIP, PPA1M, and Selangorku are some of the
Malaysian government's affordable housing initiatives. These fall under several levels,
whether federal or state, and provide a wide range of alternatives to suit various elements of
society. Private sector developers, on the other hand, provide a wide range of housing
options for both domestic and foreign buyers. These private businesses should be registered
with Malaysia's National Housing Department (NHD), which oversees the housing building
process. The NHD is a federal government body in charge of overseeing all housing
developers and collaborating with state and municipal governments to ensure that they
follow existing regulations. NHD also looks after the interests of buyers by giving information
on the developer's status, such as whether they are registered or not, as well as keeping
track of the development's progress, whether it is finished, under construction, or even
abandoned, as reported by (Tobi, 2020).
In conclusion, according to (Tobi, 2020), the NHD was established to help state
governments in meeting the demands of low-cost housing and affordable housing projects in
their various states. According to statistics gathered from the National Housing Department
(NHD), 30 percent of housing projects in Peninsular Malaysia were abandoned between
2009 and 2018. This 30 percent is represented by 83 development projects, with a total of
195 finished developments. Selangor had 35 abandoned projects, Johor had 10, and Negeri
Sembilan had 5.
8.6 THRUST 6
Enhancing the Level of Social Amenities, Basic Services and Liveable Environment
Several residential communities lack fundamental social amenities and services such as
accessibility for transport, security, and routine maintenance. The NHP suggests that
housing supply also includes enhancing the level of basic and social facilities, as well as
establishing a conducive and live-able environment, because housing is such an important
part of shaping prosperity and peace among communities. This may be accomplished
through well-planned development and community building in accordance with the Safe City
philosophy.
OBJECTIVES OF THE POLICIES
NHP 6.1 NHP 6.2
Producing residential and sustainable
growth with basic infrastructure and Stratified building's and general
services based on standards and current property's management and
demands, and several other social needs, maintenance are being
in order to produce a suitable and strengthened.
reasonably comfortable environment.
NHP 6.3
Applying the Safe City idea in
residential areas
9.0 HOW COVID-19 AFFECTS THE RECENT GROWTH OF HOUSING DEVELOPMENT
According to (Jagun, 2022), housing development makes a substantial contribution to the
economical of a nation by ensuring economic stability, producing jobs, building community
cohesiveness, and maintaining or growing house prices. The construction of new project
units in Malaysia has expanded as a result of policies and regulations of the Malaysian
government. Throughout time, a number of workers, as well as on-site development projects
and building operations, have been embedded. It has resulted in large ongoing construction
projects all around the country. Because construction includes physical contact and a high
potential of transmission owing to interaction between numerous workers, the number of
workers on site has affected the spread of COVID-19.
Due to a rise in infectious diseases during that time, the federal government has
implemented lockdowns, proximity limits, and movement control orders. Virus and pandemic
control efforts, on the other hand, have had a detrimental influence on national enterprises
and economies. Similarly, as stated by (Jagun, 2022), Malaysia's construction sector and
economy have been impacted by the COVID-19 outbreak. Most building projects in Malaysia
have been paused, with the exception of crucial or critical services. Contractors encountered
tight standard operating procedures (SOPs) and numerous occupational health and safety
restrictions on work sites even after the MCO was abolished.
Malaysian housing development has been impeded by the COVID-19 outbreak. Firstly, the
coronavirus outbreak exposed new operational and policy challenges in the management of
construction workers. Furthermore, as mentioned by (Jagun, 2022), the COVID-19 epidemic
has cast doubt on the present construction business concept. Finally, given that worker
infection is no longer acceptable, how does a high COVID-19 transmission and infection rate
affect the site?
International best standards for housing development remain ambiguous even in the post-
Coronavirus period. As a result, containing the COVID-19 pandemic may take years. Due of
the COVID-19 outbreak, Malaysia has set many entry and mobility restrictions. These limits
have raised project uncertainty and presented additional obstacles, as reported by (Jagun,
2022).
According to (Jagun, 2022), housing development locations must be secured during the
outbreak to avoid COVID-19 spread. According to a REHDA assessment, the COVID-19
outbreak has hampered building progress in existing projects. Similarly, REHDA's findings
from the "2H2020 Property Industry Survey" reveal that 121 members participated in the
survey between October 12 and October 30, 2020. Overall, 78 percent expect their land
banking reinvestment projects and upcoming projects to be significantly hampered.
According to the poll, 81 percent of respondents had cash flow problems, with the majority
(82 percent) having trouble covering human resource and management costs. The majority
of businesses (94 percent) saw a drop-in activity, while 88 percent saw earnings drop from
44 percent to 40 percent in 2019.
Workers' health, manufacturing costs, and project completion have all been affected by
outbreaks or clusters. As customers become more conscious of their lifestyle, budgets, and
time, the housing development sector will surely alter substantially over the next decade.
Furthermore, as stated by (Jagun, 2022), the value customers spend on their local
surroundings and related difficulties will increase with time. As a result, the impact of COVID-
19 and other pandemic-related issues on the building sector must be highlighted.
IMPACT OF COVID-19 TO HOUSING
DEVELOPMENT
INCREASED
SOFTER UNCERTAINTY
LOWER TOTAL
LOW DEMAND BUSINESS LEAVING SLIGHT
FACTORY GROWTH
MOODS OPPORTUNITY FOR
GROWTH
NEGATIVE IMPACT ON
NEGATIVE INLUENCE
PERFORMANCES OF LOWER INVESTMENT
ON LABOR
FIRMS WITH LOW- ACTIVITY
PRODUCTIVITY
SCALE INVESTMENTS
After the first MCO phase, nevertheless, several housing developers in Malaysia
experienced difficulties. New health and safety SOPs, workforce shortages, and time
constraints were prevalent difficulties following the MCO. Disruption was also caused by
worker limitations imposed by social distance rules. As reported by (Jagun, 2022), these
doubts and disruptions have likely lowered productivity and pushed project completion
deadlines back, resulting in higher contractor costs.
Unfortunately, because productivity loss is difficult to identify and quantify, the ramifications
for a construction project are typically overlooked. Measured mile, earned value, and
program analyses can all be used to determine productivity loss. Appropriate research, on
the other hand, need ample and exact contemporary records and data. These records are
also essential to demonstrate the relationship between interruptions and lost production.
6.1 OBJECTIVES 1
PROVIDE A DEVELOPMENT FRAMEWORK HOUSING SECTOR TO ASSIST THE
GOVERNMENT AND PRIVATE PARTIES IN PROVIDING HOUSING BASED ON SUPPLY
AND DEMAND BY EACH LAYER OF SOCIETY
According to the efficiency of the housing supply system is impacted by planning
mechanisms, notably through development plans and development controls, as well as the
market system as it operates in the housing development process. Previous research has
shown that the planning and market systems interact closely, particularly when it comes to
the structure, operation, and results of housing supply. Even when the housing market is
flawed and collapses, it becomes a function of planning mechanisms to remedy the problem,
as mentioned by (Rameli, 2006).
According to (Rameli, 2006), in terms of the planning system's responsiveness in regulating
housing supply, it is critical for the planning system to include components of effective
demand, housing choice, and market circumstances in the housing planning process, in
addition to focusing on satisfying broad housing requirements.
Housing is a fundamental human necessity and an integral component of the urban
economy, according to the Malaysian government. As a result, regulations and initiatives
have been developed to ensure that all Malaysians have access to suitable shelter and
related activities. Housing development initiatives are undertaken by both the public and
private sectors in Malaysia. As reported by (Rameli, 2006), the public sector focuses
primarily on low-cost housing programs, whereas the private sector (housing developers)
focuses on medium and high-cost housing programs, aside from meeting the 30% low-cost
housing unit requirement. The Malaysian government has also developed a housing strategy
that intends to increase the private sector's engagement in housing production and supply,
particularly in the creation of housing developments.
Aside from the federal government's involvement, the present housing development
mechanism also gives state and local governments the legal authority to set housing and
land use policies. In general, housing policy is developed through the creation of a structural
plan that covers the whole territory of each state. The structural plan's general policies will
be defined in the local plans. The local plan will define the overall land availability, amount,
and appropriateness for future home construction in terms of housing, as stated by (Rameli,
2006).
As mentioned by (Rameli, 2006), the Town and Country Planning Act of 1976 legislated all
of the aforementioned processes and procedures for preparing development plans (structure
and local plans) and managing growth through development control (Act 172). After
receiving planning authorization, the home construction application must additionally go
through the State Authority's land approval procedure (particularly for land conversion and
subdivision), as outlined in the Malaysian National Land Code, 1965. (Act 56). At this time,
any land development approved by the State Authority will be based on planning
authorization granted by the Legislation of 172 (planning act).
It becomes a nature of the planning system to meet an objective of meeting housing needs
in the activities of forecasting, formulation of housing policies, allocating land supply for
future housing in development plans, and assessing, 'filtering,' and controlling new housing
supply at the development control process. According to (Rameli, 2006), in this context,
housing requirements are defined as the amount of housing necessary to provide suitable
housing to the population without taking into account individual household financial
resources. In general, housing planning goals are deemed met if the choice provides a
sufficient and consistent supply of homes.
Therefore, it is truly important to have a development framework housing sector to assist the
government and private parties in providing housing based on supply and demand by each
layer of society. This is due to avoid the issues and challenges such as housing construction
that is unsold, overhang and is oversupplied across the country. As for example, the
National Economic Action Council (NEAC) (1999) highlighted overhang and oversupply in
the property market, especially housing property, as one of the reasons why the country's
economy fared so badly during the 1997 economic slump, as mentioned by (Rameli, 2006).
7.1 FOCUS 1
ENSURING QUALITY HOUSING FOR ALL
According to (Samui, 2021), quality housing is important in helping to achieve the
environment a livable and sustainable life. There a number of importance of having a house
with high quality. First and foremost, the health of the occupants is guaranteed in a high-
quality housing. Consider the case where a developer built a house without paying close
attention to the cladding panel's security. Before the cladding panel eventually gives way,
the house will be functioning for a while. The panel then hits one of the house's residents or
a passer-by. The first thought could be that this is an instance of a safety incident, but is it?
The cladding came down owing of bad building techniques. Poor building methods are linked
to the presence of health and safety problems on a property. When low-grade materials are
used in the construction process, for example, the chance of a home falling unexpectedly
and hurting the residents is fairly significant.
Next, a good quality house is also important due to the fact of cost management.
Developers who choose to build houses out of low-quality materials typically have one goal
in mind. They're doing everything they can to keep building costs down. They intend to break
even in the quickest time possible if they develop for investment objectives by cutting
building costs. When such developers choose the "short" approach, however, they often get
the opposite consequences. As stated by (Samui, 2021), when it comes to construction,
buying cheap, low-quality materials and employing low-grade labor sounds like a brilliant
strategy. The issue arises shortly after the construction process is completed. The structure
may not collapse in certain circumstances, but it will suffer maintenance concerns within a
year after it is constructed. To fix these problems, they will have to devote additional
resources. The fact that the problems will return simply adds to the long-term expense.
Having to do minor repairs over a longer period of time saves a lot of money. In compared to
low-quality building, high-quality construction provides considerable value to the owner.
Lastly, a good quality house contributes to environmental protection to the occupants. The
globe has recently been put under pressure as a result of the detrimental effects of climate
change. Consider the growing number of wildfires that are destroying communities in various
regions of the world. It is incumbent upon all of us to take basic steps to safeguard the
environment. As mentioned by (Samui, 2021), choosing to create a high-quality house is a
terrific way to help the environment. During the construction of high-quality homes, qualified
architects comply with the principles of sustainable design. Construction materials must be
replaced frequently due to poor quality construction. Not only does removing and disposing
garbage cost money, but it also has significant environmental consequences. This takes the
shape of landfills, where trash is disposed of.
In order for the government to attain their goal on constructing good quality housings, the
government will provide ‘Piawaian Perumahan Berkualiti (PPB)’ to detail the definition of
"quality housing" as well ensuring the quality of new and existing housing. However, there
are a number of strategies that needs to be taken to achieve a good quality housing which
includes:
STRATEGY DESCRIPTION
Strategy 1.1 Developing ‘Piawaian Perumahan Berkualiti’ (PPB) to improve the overall
quality of housing in this country.
1.1.1 Study of National Housing Conditions
1.1.2 Preparation of PPB Guidelines
1.1.3 Application of PPB in line new housing guide
1.1.4 Periodic review of the PPB Guidelines
Strategy 1.2 Creating a program of redevelopment to facilitate building rejuvenation to
meet the standards in ‘Piawaian Perumahan Berkualiti’
1.2.1 Use of PPB in the rejuvenation program of existing buildings
1.2.2 Application of PPB in existing housing guidelines
Strategy 1.3 Practice improving on building maintenance to ensure in compliance with the
‘Piawaian Perumahan Berkualiti’
1.3.1 Building maintenance according to PPB criteria
1.3.2 Use of ‘Building dilapidation report’ in maintenance of public housing
1.3.3 Application of life cycle costs for maintenance
1.3.4 PPB Roadshow to JMB/MC/COB and other housing agencies
Strategy 1.4 Refine the role of government and create an appropriate institution
framework in the preparation and maintenance of quality housing
1.4.1 Enactment of relevant Acts implementation of PPB
1.4.2 Establishment of Special units for administration and monitoring of PPB
1.4.3 Preparation of monitoring framework and PPB assessment
1.4.4 Establishment of Evaluation Committee PPB and implementation
progress
Strategy 1.5 Determine the needs and willingness in improving the preparation of housing
and setting targets for government assistance housing programs
1.5.1 Provision of government agencies housing is targeted at social sector
housing
1.5.2 Preparation of framework to determine the eligibility of public housing
applicants
1.5.3 All integration application systems of existing public housing in
between agencies
1.5.4 Involvement and empowerment community - housing regulation
1.5.5 Formulation of Affordable Housing Policy State Ownership (DRMM)
References
Government, M. o. (Disember). Retrieved from Portal Rasmi Jabatan Perumahan Negara
Kementerian Perumahan dan Kerajaan Tempatan:
https://ehome.kpkt.gov.my/index.php/pages/view/297
Jagun, Z. T. (2022, January 5). Retrieved from Springer Link:
https://link.springer.com/article/10.1007/s11356-021-18378-2#citeas
Leng, T. A. (2019, January 28). Retrieved from The Edge Markets:
https://www.theedgemarkets.com/article/national-housing-policy-20182025-aims-
reconcile-market-mismatch-focus-renttoown-scheme
Rameli, A. B. (2006). THE MANAGEMENT OF HOUSING SUPPLY IN MALAYSIA. Johor Bahru: Universiti
Teknologi Malaysia.
Samui, K. (2021, September 30). Retrieved from CJ Samui Builders: https://cjsamuibuilders.com/the-
importance-of-high-quality-construction-when-building-a-home/
Tan, C. (2019, January 29). Retrieved from kopiandproperty.com:
https://kopiandproperty.com/national-housing-policy-focus/
Tobi, S. (2020, January). Retrieved from ResearchGate:
https://www.researchgate.net/publication/338352121_Overview_of_Affordable_Housing_fr
om_Supply_and_Demand_Context_in_Malaysia
