The challenge of housing affordability in Malaysia, as highlighted in MASA Economic Insight No.6/2023, stems from two root issues: a mismatch between demand and supply, and stagnated wages.
Following that, this edition aims to delve into the underlying causes of affordable housing in Malaysia, specifically focusing on the supply of public housing and the issues related to social housing.
According to the Cambridge Dictionary, public housing refers to houses or flats provided by the government at low rents for people who have low incomes. Some examples of public housing in Malaysia include Program Perumahan Rakyat 1Malaysia (PR1MA) and Residensi Wilayah Keluarga Malaysia (RUMAWIP).
On the other hand, social housing in Malaysia typically involves housing initiatives aimed at assisting individuals or families with specific needs, which is commonly delivered by both the public and private sectors. Where the public sector primarily focuses on providing social housing in major urban centres like Kuala Lumpur and George Town, as well as in rural regions; private developers often plays a significant role in delivering social housing within urban and suburban locales, as exemplified by the Program Perumahan Rakyat (PPR).
OpenDOSM data indicates that the current population comprises 32.7 million people, with 78% are dwellers living in major urban areas. Among ASEAN countries, Malaysia stood as the third most urbanised population, with Brunei being the first runner-up and Singapore leading as the most urbanised country.
Housing affordability was a significant issue in Malaysia, particularly in urban areas and major cities. The country faced several challenges related to housing affordability, affecting various segments of the population. While efforts have been made to improve housing affordability, the situation remains a pressing concern, and ongoing efforts are needed to ensure that adequate and affordable housing is available for all Malaysians, especially in urban areas where the demand is highest.
In recent years, the development of high-rise, low-cost housing in urban areas especially within the Klang Valley, has raised several issues that concern the rakyat.
There has been a constant shortage of low-cost housing in Malaysia to support those with low incomes due to persistent structural issues. Thus, in the context of Malaysia’s public and social housing, rakyats are affected by rooted issues, as follows:
- Public Housing (Governance Issue); and
- Social Housing (Poverty-Cycle Trap).