Economic Report 2016/17: Affordable housing

AFFORDABLE Housing programmes under the federal government:

People's Housing Programme (PPR)
Provide houses priced RM30,000 - RM35,000 in Peninsular Malaysia, and RM42,000 in Sabah and Sarawak for low income earners and squatters with income below RM2,500.
Implemented by Urban Wellbeing, Housing and Local Government Ministry

Housing Assistance Programme (PBR)
Provide financial and management assistance to build new or repair existing houses. Allocation for new house is RM21,000 - RM50,000 and for repair of dilapidated/damaged houses is up to RM12,000. Target groups are the hardcore poor registered with the e-Kasih system.
Implemented by Rural and Regional Development Ministry

1Malaysia People-Friendly Houses (RMR1M)
Enable low income individuals with monthly income of RM750 - RM3,000 to build houses priced at RM65,000 (Peninsular Malaysia) and RM79,000 (Sabah and Sarawak) on their land with the government subsidising RM20,000.
Implemented by Syarikat Perumahan Negara Bhd

Federal Territories Affordable Housing (RUMAWIP)
Provide and develop affordable houses below RM300,000 for households with income below RM15,000 and single individuals with income below RM10,000. Projects are managed by local authorities namely Kuala Lumpur City Hall, Perbadanan Putrajaya and Perbadanan Labuan.
Implemented by Federal Territories Ministry

People's Dream Houses
Develop houses priced not more than RM350,000 for households with income of RM10,000 and below.
Implemented by Syarikat Perumahan Negara Bhd

1Malaysia People's Housing (PR1MA)
Plan, develop and construct houses priced RM100,000 - RM400,000 in key urban centres for households with income of RM2,500 - RM10,000.
Implemented by Perbadanan PR1MA Malaysia

1Malaysia Civil Servants Housing (PPA1M)
Provide affordable houses priced 20-30% lower than the market value for civil servants with monthly income of less than RM10,000.
Implemented by PPA1M Unit under the Prime Minister's Department


The government has completed a total of 183,755 units of affordable houses as of December 2015, with 214,011 units under construction and 309,571 units at the planning stage.

According to the Economic Report 2016/17, a total of 96,254 units were under construction as at end-August 2016 and 10,000 units are expected to be completed by end of 2016 under PR1MA.

Meanwhile, RMR1M enables land owners to build houses on their land. Since the programme commenced in 2002, a total of 36,316 houses were completed and a total of 1,626 houses were under construction as at end-August 2016.

The PPR aims to resolve squatters' resettlement and house ownership issues among low income earners. This year, the government aims to build 13,130 apartment units and 5,542 units of terrace houses for squatters and low income households with a monthly income of less than RM2,500.

Since 2002, a total of 80,252 houses were completed and as at end-August 2016, 8,928 unit apartments and 2,452 units of terrace houses were under construction. In addition, 4,202 unit apartments and 3,090 units of terrace houses are in the planning stage.

Under the FELDA Next Generation Housing Project, a total of 8,470 houses are under construction as at end-August 2016 while RM4 million was spent on the development of 1,183 houses under the FELCRA Second Generation Housing Project as at end-August 2016.

Meanwhile, the RISDA Second Generation Housing Project was launched in August this year and the construction of 100 houses commenced in September.

The government aims to build 512 houses in Orang Asli settlements under PBR. Construction work in Kelantan, Negeri Sembilan, Pahang, Perak and Selangor commence in May 2016 and is expected to be completed by next month.

The PBR initiative also focuses on building or repairing houses for senior citizens, infirm and disabled, and single mothers. As at end-August 2016, RM123.3 million was disbursed benefitting 5,972 participants.

For civil servants, a total of 18,162 units were under construction as at end-August 2016 under PPA1M, while 499 units have obtained the Certificate of Completion and Compliance. Another 17,665 units were granted Development Order approval and 6,045 units were granted Building Plan approval.

The government aims to build 100,000 units under PPA1M by 2018 with prices ranging between RM90,000 and RM300,000.

Under 2016 Budget Recalibration, houses priced RM300,000 and below were limited to first-time house buyers. To encourage the construction of such houses, the 3% deposit on total development cost with the Urban Wellbeing, Housing and Local Government Ministry was exempted effective this year.

To strengthen the management and delivery of affordable housing, the government announced the establishment of the National Housing Data Bank under the National Housing Department as an integrated database on housing and acceleration of the adoption of industrialised building system.


On the demand side, the government introduced several measures to provide better access to house financing and subsidy schemes such as First House Deposit Financing Scheme (MyDeposit), My First Home, My Home, Youth Home, Housing Credit Guarantee and withdrawal from Account 2 of Employees Provident Fund.

As at end-August 2016, 1,624 buyers benefitted from MyDeposit.

The government also placed a 10-year moratorium on all PR1MA and PPA1M homeowners, revised upwards the Real Property Gains Tax and imposed maximum loan-to-value ratio of 70% for third house financing.

Curbing price increases

To deter speculative activities, the government abolished the Developer Interest Bearing Scheme, which caused house prices to increase.

Instead, the government encourage the build-then-sell concept where financing loans do not commence until properties are completed, which protects buyers from the risk of abandoned projects.

In 2009, the government embarked on its initiative to resolve abandoned housing projects. As at end-August 2016, 182 or 80% of the total abandoned housing projects were resolved, benefitting 32,641 buyers.

A total of 20 projects involving 4,610 buyers are in various stages of construction, while another two projects with an allocation of RM20 million are being revived.