KRI: T20 group benefits from govt aid for home ownership

KUALA LUMPUR: The government’s affordable housing programmes have reached the top 20% (T20) of Malaysian households, which is a fiscal burden for the government, said Khazanah Research Institute (KRI).
T20 households are those who earn RM8,320 per month and above.
According to data from state governments and calculations done by KRI, T20 households now qualify for certain government-assisted schemes, namely 1Malaysia People’s Housing Programme (PR1MA), Rumah Mampu Milik (RMM) Pulau Pinang, Federal Territories Affordable Homes Programme (Rumawip), 1Malaysia Civil Servants Housing (PPA1M) and Syarikat Perumahan Negara Bhd’s RMM.
According to KRI, Malaysians earning up to RM12,000 per month are eligible for RMM Pulau Pinang while those who earn up to RM14,000 per month are eligible for PR1MA homes.
“We think that this should not happen because, fiscally, it is a burden to the government to start giving houses from B40 (bottom 40%) to M40 (middle 40%) and now to T20 of households in Malaysia. It is too much burden on the government fiscally,” said KRI director of research Dr Suraya Ismail.
“Our option is, let the private sector be more efficient, have more and better priced housing and let them cater for the M40 and the T20. We must provide options for households to buy from the private sector,” she told reporters at KRI’s public talk yesterday.
Meanwhile, National Housing Department deputy director-general Jayaselan K. Navaratnam said the programmes were designed using the salary structure from 2014 and was originally aimed at helping the B40.
“This is already 2017. What we designed was for B40 at the beginning but, along the way, the M40 also started to request. When M40 started to request, what we found was that, the T20 with salary at RM8,320 were also not able to purchase a house,” he said.
Jayaselan said the government is now studying the reasons why Malaysians within that income level cannot afford a RM300,000 house.
“These are the things we are going to analyse now. What are they doing with their income? Are there any other problems that are making them unable to qualify to buy the houses? We are communicating with Bank Negara Malaysia to understand the realistic view of these issues,” he added.
Suraya highlighted that households do not have the option to buy houses from the private market due to lack of supply of affordable homes and with sky-high prices, the government now has to support even the T20 households, which is a waste of fiscal resources.
Suraya said the government needs to be more focused on bringing house prices down to more affordable levels so that it does not have to help T20 households.
To bring down house prices, she said, developers need to increase productivity, which leads to cost reduction, after which the savings should be passed on to consumers.
“The government themselves should also look into shortening the planning approval (process) and what-not, especially when you are into the affordable housing scheme,” she said.