Malaysia should learn from Singapore’s success in housing

Local Government Development Minister Nga Kor Ming found himself and his ministry under attack for wanting to learn from the highly acclaimed Housing & Development Board (HDB) of Singapore.

It is incredible how an attempt to improve the Malaysian public housing model, which is totally outdated and no longer feasible, could be viewed in a negative light.

Instead of sticking our heads further into the sand and engaging in a blame game, we should focus on the what and how of making public housing work.

The deteriorating state of affordable housing in Malaysia is an open secret. Save for a handful that stand out for the right reasons, the rest are in shambles. In fact, many of these homes remain unoccupied even years after completion, contributing significantly to the property overhang in the country.

According to the latest available government data (as at September 2022), the overhang in residential properties (excluding serviced apartments as these are categorised as commercial properties) totalled 29,534 units with a value of RM19.95 billion. Of these, 7,095 units (24% at RM1.42 billion) are priced less than RM300,000, while 8,656 units (29.3% at RM3.53 billion) go for between RM300,000 and RM500,000. Although the overhang situation has improved in recent years due to fewer launches by developers, the scenario is still mind-boggling.

Overhang units are those that have received certificates of completion and compliance (CCC) but remain unsold for more than nine months after launch. This simply means unsold properties that are still under construction are not considered overhang. They will be if they remain unsold after the CCC is issued for the project.

Most of the overhang homes that are affordably priced are located in less than desirable areas with poor accessibility. If the amenities for everyday living are far away, how on earth can we expect the already struggling families to call these their homes?

The question that begs to be asked is: Why were these built there in the first place? More importantly, what needs to be done moving forward to ensure the problem does not repeat itself?

As for the affordable public housing that are occupied, their liveability is highly questionable. There are issues aplenty, ranging from safety to security. The upkeep of these buildings is far from satisfactory, and I am not talking about aesthetics. Basic needs such as working lifts and cleanliness are often lacking.

With little sign of the cost of doing business, land, building materials and construction work easing, the potential hazards in a Malaysia devoid of a proper and time-proofed public housing solution are real.

Humility is not a weakness

HDB is Singapore’s public housing authority, set up in 1960 to solve a housing crisis. Many of its citizens were living in unhygienic slums and overcrowded squatter settlements. Only 9% of Singaporeans then lived in government flats, with others yearning for a place to call home.

In less than three years, HDB built and delivered 21,000 flats. Singapore’s public housing authority has housed an entire nation and today, more than one million flats have been completed in 23 towns and three estates across the island republic. HDB flats house 80% of the city state’s resident population, of which about 90% own their homes.

Interestingly, not only has HDB provided and continues to provide quality and affordably priced public housing but these homes are now a valuable asset class. HDB flat prices rose nearly 13% in 2021, according to a report published last year.

Hence, what is so bad about seeking insights on a public housing model that works?

If we recall, following an official visit to the island republic last April, Johor Menteri Besar Datuk Onn Hafiz Ghazi said the state’s public housing development planning would model the concept of the highly successful Singapore HDB flats. He also acknowledged that for this to work, “drastic action” would be required of the Johor State Housing Development Corporation (PKPJ) to work with agencies such as the finance ministry and local authorities. What Johor has done since is not immediately known.

What we do know is that the HDB success story has been on Malaysia’s radar screen for years. We are not the only ones impressed. The governments of Hong Kong and Changsha, the capital of China’s Hunan province, have openly offered their compliments.

Changing a national public housing model for the better is not something for the weak as, understandably, affordable housing is close to the hearts of Malaysians. Be that as it may, changes are not only inevitable but necessary. The blueprint that seemingly worked before is no longer workable.

The public housing model needs reimagining. There is no room for nostalgia or procrastination. We need to act and we need to move now.

Building cookie-cutter affordable homes is not just doing a disservice to those who need them, but fanning a burning issue that has been around for too long.

Reimagining public housing

Just like the rest of the changing property landscape, public housing must be reimagined. By this, I do not mean building them to look different.

Public housing is more than just putting a roof over the heads of the B40 group and even the M40. It is not about building blocks. It is about building inclusive communities. It is about liveability.

Healthy and harmonious living is the foundation of a prosperous nation. Let us build homes, not concrete boxes. Evolving housing needs and aspirations must be considered. Given the push towards sustainability, surely this is a good time to rethink our affordable homes?

It is important to remember that the role of the government does not stop at ticking off the boxes of supply. Regular engagements with both residents and industry experts are required to establish areas of improvement.

While HDB is a great model, its success does not come cheap. For FY2021, HDB booked a record net deficit of S$4.37 billion before the government grant — 86% higher than the S$2.34 billion deficit incurred in FY2020.

Of the S$4.37 billion deficit, S$3.85 billion was incurred for the home ownership segment, almost double the S$1.95 billion deficit recorded in FY2020.

Still, in the words of Singapore’s National Development Minister Desmond Lee, the city state is committed to keeping public housing affordable and accessible, to meet the housing aspirations of Singaporeans and to help them own their homes.

What Malaysia needs is political will to get there, alongside a sense of responsibility, accountability and transparency. Isn’t that the Real Deal?

Source: EdgeProp – Au Foong Yee

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