Housing affordability for B40 and M40 in Malaysia: financing and insights from Singapore and Indonesia

Abstract

This paper is a conceptual study on the housing affordability among Malaysias B40 and M40 group. Literature review is undertaken to explore past research on housing affordability focusing on crucial factors that can enhance the delivery of public housing. The factors being looked into are the public housing development delivery system such as institutionalization, financing and affordability. These are the key elements in ensuring the deliverables and efficiency of public housing. The B40 and M40 being the low- and middle-class income group having issues on owning a property despite there are various programme by federal and state government. According to the United Nations, the recommended Price to Income Ratio (PIR) is 3. However, based on data in 2022, Malaysia PIR stands at 9.78 which is more than 3 times the recommended PIR. The study also explored neighbouring countries Singapore and Indonesia being a closed neighbour as well as one being higher per capita income and the other is lower. The success of Singapore state housing scheme is ought to be studied and if possible, being adopted for implementation. Indonesia, being a high population country, has also its housing scheme called Rusunami where flats are built in a very small size to cater for singles and newly married low- and middle-income group.