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Unaffordability of homes is not unique to Malaysia

OPINION: I began writing this piece just at the close of Chinese New Year, as I heard the last of the CNY fireworks. The dust has settled quite quickly from the season of festiv­ities and rituals that makes us all feel very Malaysian and as the countless lou sangs fade off for the year, we find ourselves back to the grind.

But most of us find that time, like money, has wings and they sure do fly. We spend most of our waking hours working, because we all have to earn our keep. That done, we still face the pressures daily to earn more.

The glum forecast, the GST worries, the daily demands – kids, petrol, groceries, the fear of not having enough. It feels like things are constantly getting more expensive, for everybody.

I had just come back from one of the Rehda Youth green tours that gave me the opportunity to explore the Tokyo property scene. Japan has one of the world’s highest property prices, after the UK, Hong Kong and Singapore and it is here that we observe an interesting phenomenon in terms of property prices.

Studies show that in Japan, because of the high prices, properties are not considered good investments. Unlike other countries where properties have capital value, in Japan, property owners often expect to sell at a lower price 10 to 15 years later.

This is in view of the shrinking population and stagnant economy. On top of that is the finding that there are fewer new-home buyers because homes are unaffordable. So the young people continue to stay with their parents. Quite contentedly.

The unaffordability of homes is universal. The recent March for Homes protest in London saw thousands of people in a mass demonstration demanding more affordable and secure housing. Reports show there are more than 300,000 people on the council waiting list for homes and prices now average about 16 times a Londoner’s average salary.

In the first quarter of 2014, Malaysia’s nationwide house prices rose by 8% from the same period of the previous year. Reasons for the increase are aplenty. They include the growing population, rate of inflation, and supply and cost of skilled labourers.

As developers and corporate entities, we do see a responsibility beyond the commercial aspect. The lack of affordable housing is a problem we need to contemplate, and often because we play a part in our social communities and economy.

We are also responsible for keeping our businesses sustainable – we have our duties to our employees, suppliers, buyers, and of course, the whole eco-system. But it is a capital-intensive business, and pricing needs to correspond to this. So I, as a developer, see myself in the same boat as the young couples starting out who lament: “Everything used to be cheaper.”

So how? That is the constant conver­sation among ourselves. And the how must come without the compromise on quality because we too have a duty to our buyers.

We look into areas where land is still affordable – we build suburbs, townships outside townships, we spread out and the result is a series of sporadic developments.

As we play our part in building the city, we are met by others in the eco-sys­tem who have their own roles to play. As we zone-out, if you like, our public transport system will need to keep up.

As the MRT and additional LRT lines spring up in the Klang Valley, we see a pattern not unlike the cities that have taken that path before us: Singapore, Hong Kong, London.

We are shaping up. And while we have a long way to go (it took London decades and they are still working on it), I am encouraged because I do see that we as a nation are meeting one another in building our cities. Cities cannot be built any other way. We are all in this together.

 

Sam Tan is executive director of Ken Holdings Bhd and deputy chairman of Rehda Youth.

This is an excerpt of an article first published in the April 4-10, 2015 issue of Focus Malaysia.

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