{"id":21151,"date":"2016-01-18T10:27:31","date_gmt":"2016-01-18T02:27:31","guid":{"rendered":"https:\/\/www.imoney.my\/articles\/?p=21151"},"modified":"2018-08-24T01:08:41","modified_gmt":"2018-08-23T17:08:41","slug":"how-3-countries-deal-with-the-problem-of-affordable-housing","status":"publish","type":"post","link":"https:\/\/www.imoney.my\/articles\/how-3-countries-deal-with-the-problem-of-affordable-housing","title":{"rendered":"How 3 Countries Deal With The Problem Of Affordable Housing"},"content":{"rendered":"

Your house is your roof and shelter, and the place where you lay your head at night, as well as where you store precious material possessions. Your house provides a personal feeling of comfort, luxury, prestige and identity. In that sense, home ownership is a basic right.<\/p>\n

However, in recent years, Malaysians are finding it a struggle to own a home. With the property market flourishing, prices of houses have sky-rocketed, especially the ones in the urban areas. Malaysians have resorted to renting or buying homes in the out-skirt of the city, and then waste hours in commuting to and fro to their work in the city.<\/p>\n

The Government has initiated many cooling measures to curb property speculation that was driving property prices up. These measures include raising the Real Property Gains Tax (RPGT), raising the minimum property price for foreigners from RM500,000 to RM1 million, and also abolishing the Developer\u2019s Interest Bearing Scheme (DIBS).<\/p>\n

On the other hand, to ultimately combat home unaffordability, Malaysia has taken a few measures such as:<\/p>\n\n\n\n\n\t\n\n\t\n\t\n\t\n\t\n\t\n\t
Government initiatives<\/th>Description<\/th>\n<\/tr>\n<\/thead>\n
1Malaysia People\u2019s Housing (PR1MA)<\/td>What does it do?
\n\u2022\tTo plan, develop, construct and maintain high-quality housing with lifestyle concepts for middle-income households in major urban centres throughout Malaysia.
\n
\nEligibility
\n\u2022\tHouseholds with a monthly income between RM2,500 and RM10,000.
\n
\nHow much?
\n\u2022\tBetween RM150,000 to RM400,000
\n<\/td>\n<\/tr>\n
First Home Deposit Scheme<\/td>This scheme aims to help affordable home buyers with their down-payments on their first house purchase. If households have their down-payment covered for, it will be easier for them to obtain a bank loan.
\n<\/td>\n<\/tr>\n
Private Affordable Ownership Housing Scheme (MyHome)<\/td>What does it do?
\n\u2022\tProvides a subsidy of up to RM30,000 per low-cost house
\n
\nEligibility
\n\u2022\tFor first-time buyers with a monthly household income of RM3,000
\n<\/td>\n<\/tr>\n
Program Perumahan Rakyat (PPR) Homes<\/td>PPR allows purchase of new low cost houses, limited to low-income earners of RM2,500 per month and below. Under this scheme, a 650 sq. ft. home is priced at RM35, 000 per unit.
\n<\/td>\n<\/tr>\n
Rent-to-Own (RTO) scheme for PR1MA homes<\/td>A deferred home ownership scheme especially for successfully balloted applicants of PR1MA homes whose loans were rejected by PR1MA\u2019s panel banks.
\n
\nUnder the RTO scheme, you are eligible to rent the PR1MA home for up to 10 years before deciding to buy it at the end of the fifth or tenth year at a pre-determined price.
\n
\nHouseholds can choose between: PR1MA Basic RTO or PR1MA Zero RTO.
\n
\nPR1MA Basic RTO
\nMonthly payments: Rental + Buyer\u2019s Savings Account (BSA)
\n\u2022\tPayment of your monthly rent includes a savings amount. The savings is accumulated towards payment of your house value. If you decide to exit the scheme without purchasing the house, the savings amount will be refunded after deduction of charges owed to PR1MA.
\n
\nPR1MA Zero RTO
\nMonthly payment: Rental
\n\u2022\tPayment is only for your monthly rent. Rental rates under Zero RTO will be less than that of Basic RTO.
\n<\/td>\n<\/tr>\n
Youth Housing Scheme (YHS)<\/td>What is it?
\n\u2022\tA first-time home ownership scheme
\n
\nEligibility
\n\u2022\tMarried youth aged between 25 and 40 years with household income not exceeding RM 10,000 per month.
\n
\nFinancing
\n\u2022\tBSN will provide loan up to RM500,000 with a financing tenure up to 35 years or up to age 65, whichever is earlier to the eligible borrower.
\n
\nRestriction
\n\u2022\tLimited to the first 20,000 buyers only
\n
\nOther perks
\n\u2022\t50% of stamp duty exemption on the instrument of transfer and loan agreements
\n\u2022\tFinancial aid of RM200 per month will be given for a period of two years from the date of first disbursement to the developer to aid with loan repayment
\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

Even with these housing initiatives over the years, home affordability continues to be an issue for the lower and middle income groups in the country.<\/p>\n

Housing affordability is not a problem exclusive to Malaysia, but it is something that other nations are experiencing too. Here\u2019s how our neighbouring countries are dealing with the problem:<\/p>\n

<\/span>Singapore<\/strong><\/span><\/h2>\n
\"Singapore\"<\/a>

Image from Techinasia<\/p><\/div>\n

Singapore\u2019s public housing has become a stellar example to other countries, not just in the region, but also the world. It\u2019s public housing has housed an entire nation. Today, more than 1 million flats have been completed in 23 towns and three estates across the island. Housing and Development Board (HDB) flats are owned by over 80% of Singapore’s resident population.<\/p>\n\n\n\n\n\t\n\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t
Government initiatives<\/th>Description<\/th>\n<\/tr>\n<\/thead>\n
HDB Loan Eligibility
\n(HLE)
\n<\/td>		Flat buyers who would like to obtain an HDB loan to buy a new flat must have a valid HLE letter before purchasing their flat.
\n
\nThe HLE letter considers the buyer\u2019s age, income, and other financial commitments to calculate the maximum loan amount eligible and expected monthly instalments to ensure they are not financially overstretched.
\n<\/td>\n<\/tr>\n
Home Protection Scheme (HPS)\t<\/td>HPS helps to ensure that dependants of the flat owners would not lose their homes if they are unable to finance their loan in the event of death or permanent incapacity of the sole breadwinner.<\/td>\n<\/tr>\n
First-time buyers<\/td>Choose to buy a new or a sub-sale flat.
\n
\nEligible sub-sale flat buyers can utilise their CPF Housing Grant to make the initial payment or to reduce the mortgage loan.
\n
\nThese housing grants ease the financial burden of low and middle-income households to afford their first flat.
\n
\n\u2022\tCPF Housing Grants
\n\u2022\tAdditional CPF Housing Grant (AHG)
\n\u2022\tSpecial CPF Housing Grant (SHG)<\/td>\n<\/tr>\n
Couples with children<\/td>Several schemes are in place for married couples with children, or couples who are expecting children to buy their first flat.
\n
\n\u2022\tParenthood Priority Scheme (PPS)
\nUnder the PPS, a percentage of the flats under the Build-To-Order (BTO) and the Sale of Balance Flats (SBF) exercises are set aside for first-time buyer families with at least one child who is a Singapore Citizen (SC) under 16 years old. This scheme applies to divorced parent and widowed parent.
\n
\n\u2022\tWhile waiting for their new flats to be completed, they could get temporary housing under the Parenthood Provisional Housing Scheme (PPHS). The scheme benefits married couples, engaged couples, divorced parent and widowed parent.
\n<\/td>\n<\/tr>\n
Couples with married children<\/td>Under the Married Child Priority Scheme (MCPS), up to 30% of the flats have been set aside for MCPS first-timer families and up to 15% for second-timer families.
\n
\nWithin the MCPS quota, first priority is given to two groups of applicants, namely:
\n\u2022\tParents and married children who apply for a flat to live together under one roof
\n\u2022\tParents who own a flat in a mature estate and apply for a BTO flat in a non-mature estate to live near their married child
\n
\nSecond-timers
\n\u2022\tSecond-timers can now buy a new 2- or 3-room BTO flat in non-mature estates. The BTO flat distribution quota for second-timers has been doubled to 30%. Of the 30% quota, 5% has been set aside for second-timers who are divorced or widowed with children below 16 under the Assistance Scheme for Second-Timers.
\n<\/td>\n<\/tr>\n
Step-Up CPF Housing Grant<\/td>Help families in non-mature estates upgrade from subsidised 2-room flats to 3-room standard flats. Each party in a divorce could apply for a subsidised flat within three years from the date of divorce.
\n<\/td>\n<\/tr>\n
Multi-generation families<\/td>Under the Multi-Generation Priority Scheme (MGPS), priority allocation is given to parents and their married children who submit a joint application to buy 3-generation (3Gen)\u2019 flats.
\n
\nParents can apply for a Studio Apartment or a 2-\/ 3-room flat while the married child can apply for a 2-room or bigger flat.
\n<\/td>\n<\/tr>\n
Singles<\/td>Under the Single Singapore Citizen (SSC) Scheme or the Joint Singles Scheme (JSS), eligible singles can buy a new or a sub-sale flat from the open market.
\n
\nUp to 30% of the 2-room BTO flats offered in non-mature estates are allocated to singles.
\n
\nLike other flat buyers, eligible singles can enjoy CPF Housing Grants when buying a BTO or resale flat.
\n<\/td>\n<\/tr>\n
Elderly<\/td>For senior citizens who would like to age in a familiar environment, there\u2019s a quota-based Studio Apartment Priority Scheme (SAPS).
\n
\nStudio Apartments were launched to provide another housing option for those aged 55 and above. These apartments, equipped with elderly-friendly and other safety features, are customised for independent and elderly living.
\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

<\/span>Australia<\/strong><\/span><\/h2>\n
\"Australia\"<\/a>

Image from Wikipedia<\/p><\/div>\n

Council of Australian Governments (COAG) identified housing affordability as a pressing issue for Australians and has agreed that Governments would work together under the A$1.3 billion annual National Affordable Housing Agreement to improve housing affordability and reduce homelessness and indigenous housing disadvantage.<\/p>\n

National Partnership Agreements on homelessness, social housing and remote Indigenous housing complement the National Affordable Housing Agreement.<\/p>\n\n\n\n\n\t\n\n\t\n\t\n\t\n\t\n\t
Government initiatives<\/th>Description<\/th>\n<\/tr>\n<\/thead>\n
The homeless<\/td>The National Partnership Agreement on homelessness provides A$1.1 billion to help fund new social housing dwellings and specialist homelessness projects across the country.
\n
\nThe Agreement includes a specially targeted initiative which will create more than 600 new dwellings across Australia for homeless families and individuals.
\n<\/td>\n<\/tr>\n
Low income families<\/td>A$5.6 billion is provided to provide accommodation for people who are homeless or at risk of homelessness.
\n
\nThe Agreement is funding around 20,000 additional public and community housing to meet priority social housing needs.
\n
\nAlso, there have been repairs to existing public housing stock (around 80,000 units have undergone repairs and maintenance).
\n
\nThe National Partnership Agreement on Social Housing provided A$400 million of Commonwealth funding to build almost 2,000 social housing.
\n<\/td>\n<\/tr>\n
Remote indigenous communities<\/td>Over A$5 billion was allocated to build up to 4,200 new homes and upgrades to around 4,800 existing homes.
\n
\nThis will assist in reducing homelessness and overcrowding and will improve poor housing conditions.
\n<\/td>\n<\/tr>\n
Affordable rental housing<\/td>The A$4.5 billion National Rental Affordability Scheme (NRAS) is committed to stimulating the construction of 50,000 high quality homes and apartments, providing affordable private rental properties for Australians and their families.
\n
\nThe Scheme aims to address the shortage of affordable rental housing by offering financial incentives to the business sector and community organisations to build and rent dwellings to low and moderate income households at a rate that is at least 20% below the prevailing market rates.
\n<\/td>\n<\/tr>\n
Others<\/td>The National Housing Supply Council monitors housing demand, supply and affordability.
\n
\nCommonwealth, State and Territory land audits, to identify surplus land that could be developed to provide additional housing.
\n
\nCOAG endorsed a housing supply and affordability reform agenda to build on current initiatives and provide new reform options to decrease the time it takes to bring housing to the market, and to reform government policies that artificially stimulate demand or act as barriers to supply.
\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

<\/span>Hong Kong<\/strong><\/span><\/h2>\n
\"Hong<\/a>

Image from Randell Tiongson<\/p><\/div>\n

In Hong Kong, public housing is one of the major housing policies of the government. Nearly half of Hong Kong’s 7.8 million population lives in public housing.<\/p>\n

Public Rental Housing estates are the biggest type of public housing estates, and are rented at discounted rates to low-income residents. They are managed by either the Hong Kong Housing Authority or the Hong Kong Housing Society. Low-income eligibility criteria for public rental and subsidised-sale flats vary between families, the elderly and individual applicants.<\/p>\n\n\n\n\n\t\n\n\t\n\t\n\t\n\t\n\t
Government initiatives<\/th>Description<\/th>\n<\/tr>\n<\/thead>\n
Home Ownership Scheme (HOS)<\/td>HOS estates are subsidised-sale public housing estates for low-income residents, usually built adjacent to or within Public Rental Housing and nearly identical in construction.
\n
\nThey are earmarked for sale to low-income qualifiers at prices which are heavily discounted from market value, and the land value is similarly subsidised.
\n
\nThe mortgage and resale of these units in the second-hand market are likewise restricted to eligible low-income residents. Some blocks are restricted for rental only while some are earmarked for sale.
\n<\/td>\n<\/tr>\n
Tenants Purchase Scheme (TPS)<\/td>TPS allows existing tenants in the rented public housing estates to purchase their flats. Similar to the HOS, the sale prices are set much lower than the market prices of private flats due to subsidies and restriction on selling. <\/td>\n<\/tr>\n
Flat-for-Sale Scheme<\/td>Flat-for-Sale Scheme is a housing development scheme where flats under the scheme are for sale at concessionary price. <\/td>\n<\/tr>\n
Sandwich Class Housing Scheme (SCHS)<\/td>SCHS estates were built for sale to lower-middle and middle-income residents, known as the sandwich class, who did not qualify for low-income public housing under HOS but still had trouble affording private housing.
\n
\nThe quality and market positioning of Sandwich Class Housing were significantly higher than public housing estates and comparable to some middle-class private developments.
\n
\nThese units were sold at slightly below market value and comes with a five-year resale restriction.
\n<\/td>\n<\/tr>\n
Interim Housing (IH)<\/td>IH is temporary public rental housing for those who are awaiting placement into public housing estates or are not immediately eligible for flats in public housing estates.
\n
\nIH accommodates residents who have been displaced by disaster, fire, redevelopment or other reasons.
\n
\nSome of the housing reuse old blocks in public housing estates while others use pre-fabricated building components.
\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

<\/span>What can Malaysia learn from these?<\/strong><\/span><\/h2>\n

Malaysia can further look into keeping housing affordable by:<\/p>\n