Government's Role Towards Homeownership: Case Study of Penang

  GOVERNMENT'S ROLE TOWARDS HOMEOWNERSHIP:  CASE STUDY OF PENANG

(Project Leader)

Dr. Ernawati Mustafa Kamal

&

Dr.  Hasnanywati  Hassan

Dr. Atasya Osmadi

[Universiti  Sains Malaysia (USM)]

ABSTRACT

Housing has been the long-term focus of urban development and social and economic policies. Addressing the housing needs of the nation is one of the important agendas for developed and developing  countries. Previous studies suggested that the government plays a central role in creating, sustaining, and improving the housing system. This research sought to investigate the role of the government in homeownership in Malaysia, focusing on Penang, and to develop a mechanism of housing price control. This research applied both quantitative and qualitative methods. Questionnaire surveys were conducted among private housing developers, and semi-structured interviews were performed with representatives from the federal government (Ministry of Urban Wellbeing, Housing and Local Government, Malaysia), the  state government (Penang State Secretariat Housing Division and Penang Housing Exco), and the local government. Focus group meetings were conducted to discuss the research findings, based  on which recommendations were made. Five main factors influencing the housing price in Penang from the  developers' perspective, namely, (1) location, (2) macroeconomics factor, (3) demographic factors, (4) land/zoning, and (5) industry factors, were identified. The role of the government  in homeownership was determined to focus on low-income and low• middle-income groups. With the tremendous increase in housing prices, the initiatives of the government towards homeownership have extended only recently to the middle• income group with an income of <RM  10,000. This research also determined  that the mechanism of housing price control implemented by the government (federal and state) is only for  low-cost, low-medium-cost, and  affordable housing schemes for housing prices up to RM 400,000. The housing price for other types of development is solely determined by the developers. Housing location, housing affordability rate, and demographic factors were determined significantly related to the mechanism of housing price control. Thus, this research proposed that the mechanism of housing price control should reflect these factors. This research contributes to the body of knowledge on housing studies by highlighting the issues related to the role of the government in homeownership and housing price control. This research benefits the Ministry of Housing and Local Government by providing the mechanism of housing price control as an input for an increasingly effective National Housing Policy as well as the Penang State Government and local authorities by presenting guidelines  on housing price control and by specifying the factors influencing the housing price in Penang.