“mismatch between demand & supply of affordable...

“Mismatch Between Demand & Supply Of

Affordable Housing”

National Property Information Centre (NAPIC)

Valuation & Property Services Department (JPPH)

Ministry of Finance Malaysia (MOF)

01

02

03

Existing supplystood at 5.4 million houses

Incoming supplynearly 0.45 million

Planned supplyat more 0.45 million

Residential Market Inventory (2018)

1

Residential Market – New Launches (2013 – 2017)

Average 48,000 units

2

Residential

Market

Volume & Value of Residential Transaction (Q1 2014- Q1 2018)

5

VO

LU

ME V

AL

UE

Volume & Value of Residential Transaction by Price Range (Q1 2014- Q1 2018)

6

VO

LU

ME

VA

LU

E (R

M m

illion

)

Unsold Under Construction 61,266 units3

4

Completions Q1 21,641 units5

Overhang 23,193 unitsRM15.68 billion6

Incoming Supply 453,175 units 1

2

Overall Performance Residential Stock and Status (Q1 2018)

Unsold Not Constructed 14,00 units

Existing Stock 5,489,518 units

Future Supply902,849 units

Planned Supply449,674 units

7

Residential Future Supply (Planned Supply & Incoming Supply (Q1 2018)

High-rise buildings continue to dominate the future supply, followed by terrace houses.

vo

lum

e

8

Residential Future Supply -Planned Supply + Incoming Supply by State (Q1 2018)

High-rise buildings continue to dominate the future supply, followed by terrace houses.

9

Volume

Residential Market Status

2016

14,792 units

2014

8,839 units

2015

10,285 units

2017

24,738 unitsQ1-2018

25,196 units

Types : Flat/condo/Apartment: 10,238 units (40.6%)

Price range : 1. Below RM100k – 7,931 units (31.5%)2. RM300k – RM500k – 7,447 units (29.6%)3. RM500k – RM1 Mil – 6,179 units (24.55)

State : 1. Johor - 5,002 units2. Penang - 4,092 units3. Selangor – 3,765 units

Overhang (Completed)

1.8%Value : RM15.68 bil

10


Type : 1. Flat/condo/Apartment: 28,761 units (46.9%)2. Terraces : 22,123 units (36.1%)

Price range : 1. Below RM300k – 19,825 units (32.4%)2. RM300k – RM500k – 16,413 units (26.8%)3. RM500k – RM1 Mil – 19,677 units (32.1%)4. > RM1 Mil – 5,351 units (8.7%)

State : 1. Selangor - 11,191 units2. Johor - 10,880 units3. Penang – 8,625 units

Unsold Under Construction

2014 2015 2016 2017 Q1 -2018

40,791 units 49,568 units 64,077 units 61,882 units 61,266 units

-1.0%

11


Type : 1. Condo/Apartment: 10,449 units (74.6%)2. Terraces : 2,272 units (16.2%)

Price range : 1. Below RM100k – 7,221 units (51.6%)2. RM300k – RM500k – 4,136 units (29.5%)3. RM500k – RM1 Mil – 2,172 units (15.5%)4. > RM1 Mil – 471 units (3.4%)

State : 1.Kuala Lumpur - 8,008 units 2.Sabah – 992 units3.Terengganu – 932 units

Unsold Not Constructed

2014

2016 2017 Q1 -2018

8,372 units 8,032 units 11,622 units 12,626 units 14,000 units

10.9%

2015 2016 2017 Q1 -2018

1

Affordable Housing Issues

(Demand And Supply

Mismatch)

Affordable Housing

Demand And Supply

● 77.3% of transaction is below RM500k and 52.5% is below RM300k (on par with

national affordability level of median household).

● Therefore, we will assume affordable housing will fall in this price range.

● This presentation will now onwards focus on below RM500k price range.

2016 - Q1 2018

• Overall market preference slated towards Terraced and Condominium/Apartment

2016 - Q1 2018

PERCENTAGE OF TRANSACTION BY PROPERTY TYPE AND

PRICE RANGE

Generally, 1- storey terraced house between RM100k-RM300k is the most

transacted in Malaysia

2016 - Q1 2018

Affordable House Price for Median Income Household by Income

Group

Malaysians are categorised into three different income groups:

Top 20% (T20), Middle 40% (M40), and Bottom 40% (B40). Over the years, the bar for

each group’s income level has increased and this is one of the indicators of economic

growth.

Here’s the affordability to buy houses according the income group:

Househo

ld Group

Media

n

Income

2016

(RM)

Percentage

of monthly

income for

housing loan

repayment

Monthly

Loan

Repayme

nt (RM)

Mont

hs

Per

Year

Yearly Loan

Repayment

(RM)

Loan

Term

(Year)

Total Loan

Payment

(RM)

House

Value

Afforded

(interest

@4.5% per

year)

T20 13,148 30% 3,944 12 47,333 35 1,656,648 643,358

M40 6,275 30% 1,883 12 22,590 35 813,240 307,049

B40 3,000 30% 900 12 10,800 35 378,000 146,796

Affordable House Price for Median Income Household by Selective

District

Source by DOSM Calculated by NAPICEven in the same State, the household income differ. Hence,

different affordable house price range needed between big cities

and small cities.

Differences Between

Demand and Supply For

Affordable Housing

REFERENCE:

DEMAND:

BASED ON NUMBER OF TRANSACTIONS IN 2016-Q1 2018 (PRIMARY & SECONDARY)

TRANSACTION)

SUPPLY:

BASED ON (NO. OF UNITS LAUNCHED IN 2016-Q1 2018 (PRIMARY ONLY)

NOTE: THE DIFFERENCES ARE TO SHOW THE TRENDS OF DEMAND AND SUPPLY

DIFFERENCES BETWEEN DEMAND (TRANSACTIONS) AND SUPPLY (NO. OF

LAUNCHES) IN (Sec. 1-100) KUALA LUMPUR TOWN

MISMATCH

2016 - Q1 2018

DIFFERENCES BETWEEN DEMAND (TRANSACTIONS) AND SUPPLY (NO. OF LAUNCHES)

IN MUKIM KUALA LUMPUR

MISMATCH

2016 - Q1 2018

DIFFERENCES BETWEEN DEMAND (TRANSACTIONS) AND SUPPLY (NO. OF LAUNCHES) IN MUKIM PETALING, KUALA LUMPUR

MISMATCH

2016 - Q1 2018

DIFFERENCE BETWEEN DEMAND (TRANSACTIONS) AND SUPPLY (NO. OF LAUNCHES) IN

PETALING, SELANGOR

MISMATCH

2016 - Q1 2018

DIFFERENCE BETWEEN DEMAND (TRANSACTIONS) AND SUPPLY (NO. OF LAUNCHES)

IN HULU LANGAT, SELANGOR

MISMATCH

2016 - Q1 2018


GOMBAK, SELANGOR

MISMATCH

2016 - Q1 2018

DIFFERENCE BETWEEN DEMAND (TRANSACTIONS) AND SUPPLY (NO. OF

LAUNCHES) IN SEREMBAN, NEGERI SEMBILAN

MISMATCH

2016 - Q1 2018


PORT DICKSON, NEGERI SEMBILAN

MISMATCH

2016 - Q1 2018


JOHOR BAHRU, JOHOR

MISMATCH

2016 - Q1 2018


LAUNCHES) IN KULAIJAYA, JOHOR

MISMATCH

2016 - Q1 2018


MUAR, JOHOR

MISMATCH

2016 - Q1 2018


MELAKA TENGAH, MELAKA

MISMATCH

2016 - Q1 2018


ALOR GAJAH, MELAKA

MISMATCH

2016 - Q1 2018

DIFFERENCE BETWEEN DEMAND (TRANSACTIONS) AND SUPPLY (NO. OF LAUNCHES) IN DAERAH

TIMUR LAUT, PULAU PINANG

MISMATCH

2016 - Q1 2018


LAUNCHES) IN DAERAH TENGAH, PULAU PINANG

MISMATCH

2016 - Q1 2018

DIFFERENCE BETWEEN DEMAND (TRANSACTIONS) AND SUPPLY (NO. OF LAUNCHES) IN KOTA

SETAR, KEDAH

MISMATCH

2016 - Q1 2018


LAUNCHES) IN KUALA MUDA, KEDAH

MISMATCH

2016 - Q1 2018


LAUNCHES) IN KOTA BHARU, KELANTAN

MISMATCH

2016 - Q1 2018


LAUNCHES) IN KUALA TERENGGANU, TERENGGANU

MISMATCH

2016 - Q1 2018

DIFFERENCE BETWEEN DEMAND (TRANSACTIONS) AND SUPPLY (NO. OF LAUNCHES) IN KUALA

TERENGGANU, TERENGGANU

MISMATCH

2016 - Q1 2018

DIFFERENCE BETWEEN DEMAND (TRANSACTIONS) AND SUPPLY (NO. OF LAUNCHES) IN KUALA

SANDAKAN, SABAH

MISMATCH

2016 - Q1 2018


IN KUCHING, SARAWAK

MISMATCH

2016 - Q1 2018


IN MIRI, SARAWAK

MISMATCH

2016 - Q1 2018


IN SIBU, SARAWAK

MISMATCH

2016 - Q1 2018

ConclusionRecommendations● Prices of land is beyond government control. It was based on

demand and supply. But, Federal and State authorities could help by reducing or waiving land premium or development charges, provide facilitation fund or provide land for affordable housing projects.

● Government funded agency should be helped by the state government to obtain better location land and a better infractructure (by pass to nearest highway) and frequent public transportation for projects further from working area.

● Industrialised Building System (IBS) could be a way to lower the cost of construction. Government should support by funding R&Dto suit it for local preferences.

Conclusion...continueRecommendations● As for suppliers or vendor, they could play a part by reducing their

transportation charges to reduce the construction cost.

● Projects with affordable housing elements should be given approval priority by state governments. State government should monitor the approvals according to the market demand in order to avoid oversupply. Hence, they need to have their own database.

● Every state should implement 40% of approvals in a year should comprise affordable housing based on affordability in specific area.

● More incentives or tax relieves for those developers that build more than 30% affordable housing in a year.

Conclusion...continueRecommendations● NAPIC publications is based on the feedback by the stakeholders

(developers, property managers, local authority and etc). Lack of cooperation from stakeholders (data providers) is the main challenges faced by NAPIC data collector in order to report more precise reporting.

● Maximize the usage of the data provided in the report. Join study with other agencies reporting such as DOSM is needed for a more thorough and precise feasiblity study. Maximize profit by meeting the correct demand, not by selling the highest price and when can’t achieve selling target, build low quality houses or worse, abandoned.

Conclusion...continue

Recommendations● Malaysia already have existing centralised Property Data

Warehouse which called Property Information System Malaysia(PRISM). napic.jpph.gov.my

● A join online system between JPN and NAPIC for a single platform property data collection is underway, currently called Sistem Perumahan Negara. Expected to operate in 2019.

Thank You

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