Should There Be a Limit on Investment Properties to Address Affordable Housing Shortage?
A proposal to cap the number of properties individuals can purchase for investment has sparked debate in Malaysia. The National House Buyers Association (HBA) believes that while it makes sense to limit the number of affordable homes an individual can buy, extending this cap to all property categories could unfairly penalize those who want to invest their hard-earned money.
Pros and Cons of Capping Investment Properties
On a recent episode of the Keluar Sekejap podcast, former UMNO officials Khairy Jamaluddin and Shahril Hamdan proposed that such limits could help address the growing shortage of affordable housing in Malaysia. They argue that unrestricted property investment has led to a surplus of high-priced homes that remain unsold, contributing to rising prices in the housing market.
HBA Secretary-General Chang Kim Loong expressed concern over a blanket restriction. He emphasized that people often choose property investments due to limited knowledge of alternative options such as gold, jewelry, or art. He noted that affordable housing units, typically priced at RM300,000 and below, are already reserved for first-time buyers through government schemes.
Experts Suggest Additional Measures for Affordable Housing
Real estate negotiator Iwin Tay supports the proposal in principle but stresses that it must be complemented by policies to ensure an adequate supply of affordable homes. Tay advocates for tax breaks or grants for developers building affordable units and calls for mandates on future housing projects to include a percentage of affordable homes.
“Putting a cap on home purchases for investment could help stabilize property prices, especially in high-demand urban areas like Kuala Lumpur,” Tay explained. “However, without increasing the availability of affordable homes, restrictions alone may have limited impact.”
Rising Property Prices and Unsold Units
Data from Juwai IQI shows that median home prices in Malaysia have surged by 42% over the past decade, rising from RM330,427 in 2014 to RM467,143 in 2023. Additionally, the National Property Information Centre recently reported 22,642 unsold completed residential units as of mid-2023, primarily in the below RM300,000 category, indicating a market imbalance in terms of supply and demand.
Moving Forward: Balancing Policy and Investment Freedom
While the call for capping investment properties highlights an ongoing issue with affordable housing, experts agree that an all-encompassing restriction may not be the most effective solution. A balanced approach that includes incentives for affordable housing development and potential caps on specific property categories might offer a way to ease demand pressures and stabilize the market.
For now, all eyes are on the governmentโs next move in addressing housing affordability and ensuring fair opportunities for first-time homebuyers.
