A Study on Affordable Housing Within the Middle Income Households in the

A STUDY ON AFFORDABLE HOUSING WITHIN THE MIDDLE INCOME HOUSEHOLDS IN THE MAJOR CITIES AND TOWNS IN MALAYSIA

Dr Wan Nor Azriyati Wan Abd Aziz1

Assoc. Prof. Dr Noor Rosly Hanif 2

Dr Kuppusamy a/l Singaravello3

Centre for Studies of Urban and Regional Real Estate (SURE)

Faculty of Built Environment

University of Malaya, 50603 Kuala Lumpur

ABSTRACT

Housing forms one of the basic needs of human. Maslow’s Theory Hierarchy of Needs sees that housing forms the foremost important needs, in addition to security, food and others, at the lowest among the five levels. Acknowledging this importance, the Malaysian government has drawn various policies to facilitate homeownership. This has resulted in the housing industry to tremendously grow over the last 30 years through provision of housing to a large section of the population guided by the vision of “home owning democracy”. The growth of the Malaysian housing sector has been underpinned by the interface between three forces; growing population, high rates of urbanisation and growing economy. There are policies currently in place that assist to address housing for needy. However, little is done to attend to the needs of the middle income group (MIG). This is made worse by non-existence of the authoritative definition of the term “middle income household” itself. Against this background, the main objective of this study is to investigate the affordability profiles of middle-income earners in each major city to derive the levels of house prices they can afford. The second key objective is to evaluate accessibility to affordable housing amongst the middle income households. In undertaking this, the study will investigate the profiles of affordable housing supply in terms of prices, the types of houses and the locations. The study discusses the findings and analysis based on the literature review and surveys on respondents from households in each of the major towns and cities of Kuala Lumpur, Penang, Kangar, Alor Setar, Melaka, Johor Bahru, Kuantan, Kota Bharu, Kuching and Kota Kinabalu. It adopted three interview techniques; structured interviews, semi structured interviews and in-depth interviews. The findings of this study establishes that middle income households can be categorised into three main sub-groups; Low-Middle Income, Middle-Middle Income and Upper-Middle Income. The acceptable price range for affordability is between RM120,000 and RM150,000 except for Kuala Lumpur. In Kuala Lumpur the findings demonstrates that a median of between RM180,000 and RM200,000 as the affordable price. For Kota Bharu and Kuantan, the range for affordability is wider to be between RM120,000 and RM180,000. Further analysis on the affordable price by both current MIG home owners and prospective buyers compared to mean housing price according to state explicitly suggest mismatched between affordability and housing price for the MIG. The study concluded that more government intervention is warranted to address this affordability issue in relation to the types of houses preferred by MIG.

Key words: Affordability, middle income households, affordable housing, affordable prices