Data vital to fixing property woes
Lack of decision-making based on actionable data has contributed to overhang and vacancy issues in Malaysia’s property market, said a property market observer.
“Every stakeholder has a different view and motivation on which housing projects get built, and where. But no one really looks at data when making such decisions,” said Cha-Ly Koh, CEO and founder of Urbanmetry Sdn Bhd.
Urbanmetry uses big data to better inform developers in planning and developing sustainable urban dwellings.
One pertinent challenge, Koh said, is how to integrate the data into decisions regarding township and housing development projects.
“For example, if data indicates that a particular area is prone to flooding, the authorities may still proceed with the township’s development. So, what’s the point of having such data?” she said.
Koh said data, regardless of its complexity, is only meaningful if taken into consideration in the decision-making process.
If the data is important to the environment or it shows that there is an oversupply of low-cost housing in a specific area, the problem will persist if the local government ignores it, she said.
Recently, local government development minister Nga Kor Ming said the government will develop a housing data centre, using big data analytics, as a centralised reference source for housing development.
He said the ministry will use the data to assess the causes of mismatch in supply and demand that has led to the high number of unsold houses.
In a written reply in the Dewan Rakyat on May 24, Nga said there were 27,746 residential units worth RM18.45 billion that have been completed but have yet to be sold at the end of last year.
A total of 9,323 unsold units are priced between RM500,001 and RM1 million.
Prevent market failures
Singapore’s Urban Redevelopment Authority (URA) and the Housing Development Board (HDB) provide good examples of data-driven decision-making in relation to the housing market.
“In Singapore, the URA and the HDB monitor data diligently to detect any sign of overheating of the property market,” Koh said.
“Once they detect signs of overheating, the government will take the necessary measures to cool the property market.”
The island republic did just that in April by raising the additional buyers stamp duty (ABSD).
Under the revised scheme, foreigners buying any residential property are required to pay 60% of the property value in stamp duty, up from 30% previously.
Singapore citizens who buy a second or subsequent property have to pay 20% to 30% in ABSD, up from 17% to 25% previously.
On the other hand, local councils in Malaysia lack the expertise and capacity to conduct a similar level of data-tracking.
“Local councils (in Malaysia) are involved mainly in municipal concerns such as drainage, parking, and similar issues,” Koh said.
New housing approach
The government’s way to ensure adequate supplies of affordable homes is to launch more fully funded or subsidised projects without consideration for location, accessibility and amenities.
“The government not only builds new units, but also requires property developers to build affordable housing, which eventually props up the prices of private properties due to cross-subsidisation,” Koh said.
Many state governments require property developers to also make room for affordable or low-cost houses in their projects.
“The government needs to realise that building more cheap homes without truly understanding demand will only aggravate the situation,” she said.
Koh pointed out that Malaysia’s home ownership rate of 76.9% as of 2019 is already high according to global standards and questioned whether encouraging its increase is the right policy direction.
Home ownership rates in developed countries are generally lower than in Malaysia. In the US, it is 65.5%, the UK (65.2%), Japan (61.2%), Germany (50.4%) and Switzerland (42.3%).
“Perhaps, not everyone needs to, or should, own homes. What matters is the people can enjoy access to affordable and decent shelter via ownership or renting,” she said.
Source: FMT Online
