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Affordable Housing in Malaysia: Addressing the Growing Demand for Low-Cost Properties

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Explore Malaysia's approach to affordable housing, as we delve into key strategies, government schemes, and collaborative efforts that address the surging demand for low-cost properties, ensuring a better quality of life for all.

In Malaysia, the demand for affordable housing has been growing rapidly due to various factors, including population growth, urbanization, and the increasing cost of living. However, the supply of low-cost properties has not been able to keep up with the demand, resulting in a housing affordability crisis. This has led to many people struggling to find suitable housing, especially those from low-income households.

The Malaysian government has recognized the urgent need to address this issue and has implemented various initiatives to increase the supply of affordable housing. These initiatives include the construction of new affordable housing projects, the redevelopment of existing public housing, and the provision of subsidies and incentives for developers to build affordable homes.

Affordable Housing Projects

One of the most significant efforts to address the demand for affordable housing in Malaysia is the construction of new affordable housing projects. The government has launched several programs aimed at increasing the supply of low-cost properties, including the 1Malaysia People's Housing Programme (PR1MA) and the Rumah Selangorku Scheme.

The PR1MA program is aimed at providing affordable housing to middle-income households, while the Rumah Selangorku Scheme is focused on providing affordable homes to low-income households. These projects offer a range of affordable housing options, including apartments, flats, and landed properties, with prices starting from as low as RM100,000.

The government has also launched several public housing schemes, including the People's Housing Programme (PPR) and the Rumah Mesra Rakyat (RMR) programme. These programmes offer low-cost rental homes to low-income families, which help them to meet their basic housing needs.

Redevelopment of Public Housing

Another initiative to address the growing demand for affordable housing is the redevelopment of existing public housing. The government has identified a need to upgrade and modernize existing public housing to make them more livable and comfortable for residents.

To achieve this, the government has allocated funds to renovate and refurbish existing public housing units, including upgrading facilities such as water supply and sanitation systems. The government is also working with private developers to redevelop aging public housing estates, transforming them into modern, affordable housing communities.

Subsidies and Incentives for Developers

The Malaysian government has also implemented subsidies and incentives for developers to build affordable homes. These incentives include tax exemptions and rebates, reduced land premiums, and subsidies for construction costs. By providing developers with financial incentives, the government hopes to encourage more private sector investment in affordable housing projects.

Additionally, the government has introduced the Build-Then-Sell (BTS) system, which requires developers to complete a project before they can sell any units. This system helps to ensure that buyers receive a completed, high-quality property and helps to prevent developers from abandoning unfinished projects, which has been a problem in the past.

MyHome Scheme

The Malaysian government has recognised this issue and has implemented various measures to address the growing demand for low-cost properties. One of the most notable initiatives is the MyHome Scheme, which provides financial assistance to eligible Malaysians to purchase their first home.

Under the MyHome Scheme, eligible Malaysians can apply for a 10% down payment assistance, a 5% interest subsidy, and a mortgage guarantee. This programme is aimed at helping first-time homebuyers overcome the high initial costs of purchasing a home.

Benefit of affordable housing in Malaysia

Affordable housing has become a critical issue in Malaysia, as the country continues to face rising housing costs and a shortage of affordable homes. The benefits of affordable housing are numerous and wide-ranging, and can have a positive impact on individuals, families, and society as a whole. Here are some of the key benefits of affordable housing in Malaysia:

  • Access to decent, safe and affordable housing provides a stable foundation for families and individuals, who can help improve their overall quality of life.
  • Affordable housing can reduce poverty, as it enables people to save more of their income and avoid the burden of high housing costs.
  • It helps to promote social inclusion and diversity by providing a mix of housing types, sizes, and tenures.
  • Affordable housing can also lead to improved health outcomes, as people living in better-quality homes are less likely to experience respiratory problems and other health issues related to poor housing conditions.
  • Increased availability of affordable housing can help stimulate economic growth, as it provides a boost to the construction industry and creates jobs in related sectors.
  • Affordable housing also supports sustainable development by reducing urban sprawl, limiting commuting times and increasing energy efficiency.

Low cost housing policy in Malaysia: A solution for affordable homes for all

Owning a house is a dream for many, but with the soaring prices of property in Malaysia, it has become a distant dream for a majority of the population. However, the Malaysian government has recognized the need to provide affordable housing for all and has taken steps to introduce a low-cost housing policy. We will take a closer look at the low-cost housing policy in Malaysia and what it entails.

What is low-cost housing?

Low-cost housing refers to houses that are affordable and accessible to the low and medium-income group of people. These houses are usually priced below market value and come with basic amenities such as water, electricity, and sanitation facilities.

Low-cost housing policy in Malaysia

In Malaysia, the low-cost housing policy was first introduced in the 1970s, with the aim of providing affordable housing to the lower-income group. The policy has undergone several revisions over the years, with the latest revision being in 2018.

The policy sets a target for developers to allocate a certain percentage of their housing projects for low-cost housing. The percentage varies depending on the location of the project and the number of units being built. For example, in Kuala Lumpur, the target is 20% of the total number of units, while in other areas, it may be lower.

The policy also sets a ceiling price for low-cost housing units, which varies depending on the location of the project. In Kuala Lumpur, the ceiling price is RM 42,000, while in other areas, it may be lower.

Benefits of low-cost housing policy

The low-cost housing policy has several benefits, including:

  • Affordable housing: The policy provides affordable housing to the lower-income group, allowing them to own a house and provide shelter for their families.
  • Social stability: The policy promotes social stability by providing a home for the lower-income group, reducing the need for them to live in slums or overcrowded areas.
  • Economic growth: The policy can stimulate economic growth by creating job opportunities in the construction industry.

Challenges faced by low-cost housing policy

Despite its benefits, the low-cost housing policy faces several challenges, including:

  • Limited availability: The policy's target is to provide affordable housing for all, but the limited number of units available makes it difficult to meet this target.
  • Poor quality: Some low-cost housing units are poorly built and lack basic amenities, making them unlivable.
  • Location: Low-cost housing units are often located in remote areas, making it difficult for the residents to access basic amenities and transportation.

Therefore, the low-cost housing policy in Malaysia is a step towards providing affordable housing for all. While there are challenges faced by the policy, the benefits it provides cannot be ignored. It is essential to continue working towards improving the policy to ensure that it meets its objectives of providing affordable and accessible housing for all.

Factors Influencing the Demand for Housing in Malaysia

Housing is an essential need for everyone, and it plays a significant role in the economy of a country. In Malaysia, the housing demand has been on the rise in recent years, and it is influenced by various factors. Understanding these factors can help policymakers, investors, and homeowners make informed decisions. In this blog, we will explore the key factors that influence the demand for housing in Malaysia.

Population Growth

Malaysia has experienced a steady increase in population over the years, and this has contributed significantly to the demand for housing. As more people are born or migrate to the country, the need for accommodation increases, creating a demand for housing.

Economic Growth

Economic growth is a critical factor that influences the demand for housing. As the economy of Malaysia continues to grow, more people can afford to buy or rent houses. The increase in income levels and job opportunities means that people can now afford to live in better houses, and this drives up the demand for housing.


Urbanization is the process of people moving from rural areas to urban centers. In Malaysia, urbanization has been on the rise in recent years, and this has led to an increase in the demand for housing. As more people move to the cities, the need for housing in urban areas increases, which drives up demand.

Government Policies

Government policies play a significant role in shaping the housing market in Malaysia. Policies such as the Affordable Housing Policy, which aims to provide affordable housing to low and middle-income earners, have helped to increase the demand for housing in the country. Other policies such as the Malaysia My Second Home Program, which targets foreign investors, have also contributed to the demand for housing.

Interest Rates

Interest rates have a significant impact on the demand for housing in Malaysia. When interest rates are low, people can afford to borrow more money to buy or rent houses, leading to an increase in demand. On the other hand, when interest rates are high, borrowing becomes expensive, and this can reduce the demand for housing.

In a nutshell, various factors influence the demand for housing in Malaysia. Understanding these factors is crucial for policymakers, investors, and homeowners who want to make informed decisions. By considering population growth, economic growth, urbanization, government policies, and interest rates, stakeholders in the housing market can anticipate future trends and make the right decisions to meet the growing demand for housing in the country.


The demand for affordable housing in Malaysia is growing rapidly, and the government has recognized the urgency of the issue. Through the implementation of various initiatives such as the construction of new affordable housing projects, the redevelopment of public housing, and the provision of subsidies and incentives for developers, the government is working to increase the supply of low-cost properties.

However, there is still a long way to go to meet the demand for affordable housing in Malaysia fully. Addressing this issue will require a continued effort from the government, private developers, and other stakeholders. Nonetheless, the initiatives currently being implemented are a step in the right direction towards ensuring that everyone in Malaysia has access to safe, comfortable, and affordable housing.

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