“We may have a federal ministry that is in charge of housing but they only advise the state and they cannot force the state to do anything," said Abdul Rahim. “This is unlike Singapore, where there is only one body (the HDB) and everything is centralised."
PETALING JAYA: Malaysia has too many regulatory bodies that are tasked with affordable housing-related matters.
Rahim & Co Petaling Jaya office director Choy Yue Kwong said having multiple bodies was not beneficial, as it ultimately hinders effective implementation.
“Recently our Local Government Development Minister Nga Kor Ming said he wanted to study how Singapore’s Housing and Development Board (HDB) became successful in implementing its objectives.
“I have worked in HDB (before) and I observed that in Singapore, there is only one centralised body that governs everything on public and affordable housing,” Choy said at Rahim & Co’s Property Market Review 2022/2023 presentation.
He noted that the body regulated related matters such as land purchase, planning, design, construction and maintenance of HDB flats.
“It is done very efficiently as it is all in-house. If something is done in such a manner then you can save a lot of costs and these savings can then be reflected by lower selling prices.
“But in Malaysia there are so many bodies that are in charge of affordable housing and it is getting very confusing.”
Commenting on this matter, Rahim & Co executive chairman Tan Sri Abdul Rahim Abdul Rahman noted that a key difference with Malaysia is that all land matters are decentralised and treated as a state matter.
“We may have a federal ministry that is in charge of housing but they only advise the state and they cannot force the state to do anything.
“This is unlike Singapore, where there is only one body (the HDB) and everything is centralised.
“So we have to overcome this somehow. Each state must consider its own (unique) problems on housing which can be quite difficult to tackle,” he said.
Separately, Rahim & Co director for research Sulaiman Akhmady Mohd Saheh noted that property developers had to deal with land costs, apart from compliance costs.
Land costs keep rising every year, which would indirectly cause higher property prices, he noted.
“Higher cost input will reduce a developer’s profit element. Perhaps we should look at a new approach to tackling land costs that are still steadily rising until today,” Sulaiman Akhmady said.
“This is especially from the developer’s side, as well as the bankers and financiers. Basically, land is valued based on the income or profit that it can generate. These are the fundamentals of deriving land prices,” he said.
Meanwhile, Abdul Rahim said it would be good if the government can look into updating the existing law that governs retail spaces which are owned by individuals.
“The issue now is that some of these commercial centres are now having problems, as the existing law in Malaysia is that one cannot redevelop a retail site unless all of the owners agree to the redevelopment.
“There have been cases where only two owners out of 300 had objected to a redevelopment out of sentimental reasons, thus the economic value of the entire site and the rest of the owners are held back due to this.”
Abdul Rahim suggested that the law should instead allow a redevelopment if 80% of retail space owners agreed to its redevelopment.“This is an area that the government has to look into so that it reflects the development interests of the majority of owners.”
He noted that this is also the same in advanced countries such as the United Kingdom, Hong Kong and Singapore.
“It is a concern because if you look at the state of some shopping centres that are not doing well, because they lack the funds to even upgrade their escalators,” Abdul Rahim said.
