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New Straits Times
13 hours ago
- Business
- New Straits Times
Mismatch widens as housing supply overlooks majority demand
KUALA LUMPUR: The supply of residential properties in Malaysia continues to diverge from actual demand, with developers favouring mid- to high-end units while most Malaysians, particularly those in the B40 and M40 income groups, struggle to afford suitable housing. Dr Suraya Ismail, Director of Research at Khazanah Research Institute (KRI), said this supply-demand imbalance has led to a growing number of unsold units and limited options for lower-income buyers. "This raises a crucial question. Are Malaysians being presented with a clear and transparent view of the actual state of the property market?" Despite evident signs of oversupply, especially in the Klang Valley, developers are still launching new projects at a steady pace, she said. Current data shows a substantial volume of completed but unsold properties, mainly in the mid- to high-end segment, such as serviced apartments and condominiums in urban centres, she told Business Times. Suraya noted that developers, often backed by strong financing or public-private partnerships, remain confident in long-term market corrections or sustained demand. But she questioned whether such optimism is justified in light of persistent affordability issues. According to her, Malaysia's housing market is suffering from a mismatch between effective demand, defined as what households can afford, and the type of housing being supplied. While prices have risen steadily over the years, they've outpaced income growth, making homes unaffordable for a significant share of the population. The Real Estate and Housing Developers' Association Malaysia (Rehda) declined to respond to questions sent by Business Times. Meanwhile, Suraya said that despite an evident glut in the higher-end segment, housing supply continues to target the top income groups. For example, in 2022, Malaysia's affordable median house price was RM228,168, three times the median annual household income. Yet, only 10.7 per cent of new launches were priced below RM200,000. In contrast, units priced above RM500,000 made up 24.7 per cent of launches in 2022 and rose to 39 per cent in 2023. Between 2020 and 2023, most transactions, 709,283 units, were for homes priced below RM500,000. Properties under RM300,000 made up 56.2 per cent of total sales, highlighting strong demand in the affordable segment. Suraya noted that a closer look at 2023 sales and overhang data reveals the same pattern. Units priced below RM300,000 accounted for 53 per cent of total sales. Yet of the 25,816 overhang units recorded in the fourth quarter of 2024 (Q4 2023), 70.6 per cent were homes priced above RM300,000. "This suggests a strong demand for affordable housing following the population's income brackets, while higher-priced properties encounter challenges in finding buyers. The data highlights the struggle of higher-priced units to attract buyers, resulting in a higher share of overhang," she said. Suraya added that the market has consistently scored above 3.0 on the housing affordability index, signifying 'seriously unaffordable' conditions. Between 2012 and 2014, the median house price rose from RM170,000 to RM270,000 at a compound annual growth rate (CAGR) of 23 per cent, while household income grew at less than half that rate, only 11.7 per cent. "In high-density areas like Kuala Lumpur, Selangor, and Johor, many developments are struggling to sell remaining units. This trend highlights a growing mismatch between supply and actual demand, especially in an environment of stagnant wage growth and tighter lending rules. As stated earlier, the supply is not catering for the realities on the ground. Why, then, are new project approvals continuing unabated? "Approvals are given at the state level and local municipal councils, but there is a gap in the information for the efficient coordination of house prices and the general affordability of the local populace. This could be assisted if developers could give an indication of the feasibility of sales for their plot of land, whether it caters to effective demand, that is, the pricing threshold that the local population could afford, or not exacerbating the glut of supply (overhang and unsold units) within the area, for the approval of development order (DO)." While official NAPIC figures highlight the growing property overhang, defined as units completed but unsold for more than nine months, Suraya cautioned that the problem may be larger than reported. "Are we only seeing the tip of the iceberg? Well, it can be an underestimation," she said. Rethinking property investment: Is it still worth it for Malaysians? With evolving market dynamics, rising rental risks, and slowing capital gains, many are questioning whether property remains a sound investment for the average Malaysian. Suraya pointed to a growing rental supply in areas like Mont Kiara, Bangsar South, KL Eco City, Subang, Shah Alam, and Cyberjaya. Tenants now hold the upper hand, while landlords often accept rental yields below their mortgage costs, a sign of deeper market weaknesses, she said. She cautioned against the practice of setting rental rates solely to cover mortgages, calling it a strategy used by speculative rather than professional landlords. "Rental yields should not be pegged to cover mortgage costs. This is normally practised by speculative landlords, not professional landlords. Speculative landlords artificially inflate the rental market by wanting to cover their mortgage payments, rather than deriving the price of rentals based on the liveable conditions of the homes supplied," she said. She noted that in any mature market, rental trends serve as a litmus test for real demand. Units that can't fetch viable rental rates often reflect oversupply, pricing mismatches, layout inefficiencies, or poor supporting infrastructure. "We must find a way to extract more information about rental prices for analysis. One method is to formalise the rental market with a Rental Tenancy Act. Then, we can access and monitor the rental market to protect the interests of landlords and tenants," she said. She also raised concerns over Joint Management Bodies (JMBs) enforcing "minimum rental rates" to preserve property values, a practice that, while legal, can distort real demand and limit affordability. While framed as a move to preserve property value, critics argue this amounts to cartel-like behaviour that artificially props up prices, hurting owners who need rental income and distorting market signals. "If such practices are indeed happening, they obscure the true softness in rental demand and delay the price corrections needed to make properties accessible to genuine end-users. What are the implications for prospective buyers, investors, and policymakers? "Unfortunately, the values or the opportunistic behaviour of people become institutionalised in the JMB's house rules. That is the democratic disadvantage of consensus, as stipulated in the Strata Act, because it calls for voting on any house rules, and the majority wins. "Currently, most collective actions are for profiteering and not catering to individual plights nor the common good of the less advantaged in the group. Such is the state of our value system. However, distressed individual unit holders could try to negotiate the house rules of the majority by invoking their claim on property rights to the COB." To address the oversupply of high-rise units that fail to match demand, she urged the Housing Ministry (KPKT) to monitor the market using robust housing indicators, such as rent-to-income and price-to-income ratios. "Housing is viewed as both an asset and a shelter. If housing is viewed as an asset-based income, then the CAGR of household wages will never be commensurate with the rapid price escalation of housing as an investment. Therefore, slower capital appreciation is good for the general affordability of all first-time home buyers. She highlighted the conflicting interests in the market, between homeowners, investors, professional landlords, and those seeking affordable shelter. Indicators like the rent-to-income ratio are vital for shaping targeted policies, such as when and how to transition people from public to private rentals. Suraya stressed the importance of promoting both renting and ownership as viable choices but warned that affordability must come first. Speculative activity, particularly in the mid-income housing segment, is damaging the market's long-term sustainability, she said. Suraya said tackling the growing imbalance in the property market requires inclusive dialogue among all key stakeholders, including KPKT, local councils, town planners, Rehda, the National House Buyers Association, the National Property Information Centre (Napic), auctioneers, secondary market specialists, economists, and urban policy researchers. "It is not about who leads and who adopts, but more about building a consensus for the overall 'collective or common good'. This might mean that we need to seriously discuss the housing sector's objectives for all types of diverse interests." Is the property glut worse than it seems? While NAPIC data reports tens of thousands of unsold completed units, the figures fall short of capturing the full extent of Malaysia's housing oversupply, according to Tan Wee Tiam, executive director of Olive Tree Property Consultants. Notably absent are under-construction units with little buyer interest, also known as "shadow inventory", and vacant purchased units that remain unoccupied, adding to supply without meeting real housing needs. Tan noted that the overhang is largely concentrated in the RM500,000 and above segment, far beyond the affordability of most Malaysians. Meanwhile, genuine demand persists in the sub-RM300,000 range, but these affordable units often lack adequate connectivity, infrastructure, and amenities. Aggressive sales tactics, such as rebates, furnishing packages, and deferred payments, may artificially boost take-up rates, masking the true health of the market and distorting price signals, he told Business Times. "Napic data merely gives macro data on the overhang figures and value. We believe it is more useful for Napic or another centralised data centre to collate data on all the sold units when a caveat is lodged, buyers nationalities and other essential information. "Prices, type of property, built-up area, etc., will be crucial for developers and the prospects to better understand the true picture of the property market in a timely manner. Identities of the vendors and purchasers should be provided so that we can know whether they are related party transactions," he said. Tan said that disclosing buyer nationalities can shed light on the real extent of foreign interest, helping distinguish genuine international demand from market hype. Furthermore, he said that understanding whether units are owner-occupied or investor-held (and possibly left vacant) is vital for assessing true occupancy trends. Such transparent, granular data would not only enhance market insights for developers and policymakers but also empower buyers and investors to make more informed decisions in an increasingly opaque landscape, he said. Tan believes that property is still a viable investment for the average Malaysian. He said that property has long been regarded as a cornerstone of wealth creation in Malaysia, but evolving market dynamics have raised critical questions about its viability for the average investor. He noted several factors reshaping the landscape. "Wages haven't kept pace with rising home prices. Malaysia's median house price is now about five times the median annual income, well above the affordability benchmark of 3.0. Persistent oversupply in the mid- to high-end segment has led to depressed rental yields, often in the range of just 2 per cent to 4 per cent, which may not even cover mortgage repayments and maintenance costs. "Tighter lending conditions and rising interest rates have further limited access to home financing, especially for younger and lower-income groups. As a result, many younger Malaysians are diversifying into alternative investment avenues such as Real Estate Investment Trusts (REITs), exchange-traded funds (ETFs), and digital platforms offering robo-advisory services, which often promise better liquidity, lower entry costs, and less risk exposure." Still, he said property investment is not entirely off the table. It remains a viable long-term asset class for those who conduct careful due diligence, understand demand patterns and local market conditions, adopt a realistic investment horizon, and are prepared to start small and scale up gradually. Tan noted that timing also plays a critical role.
The Star
5 days ago
- Health
- The Star
WHEN IT MATTERS MOST
FOR Asha and her husband, retirement was supposed to be their golden chapter – slow mornings, long holidays, time with the grandchildren and gardening together. But when her husband was diagnosed with dementia just months after turning 61, everything changed. The plans they'd held so dearly now felt like a distant memory. Their savings – once earmarked for adventures and new memories – were quickly rerouted to round-the-clock care. What they hadn't counted on was how fast the costs would climb. While his medical insurance helps with some of the medical bills, it doesn't cover the full financial strain of ongoing care. Asha and her husband have life insurance – but traditional policies only pay out after death. In their moment of crisis, what they really needed was help while they were still living – support for a caregiver, physiotherapy sessions and the growing list of everyday expenses that come with a long-term condition. This is a reality for many Malaysian families. Hong Leong Assurance (HLA) – the largest local life insurance provider – is stepping up with one of the first supplementary plans in the market that focuses on living benefits – the HLA Future Secured Rider. This supplementary plan doesn't replace any existing coverage, but enhances it, giving seniors like Asha what most life insurance policies don't: immediate access to funds when life throws you a curveball, ensuring you can continue to live with dignity and joy, despite the challenges. Solution for the future HLA has designed this plan for those nearing their golden years – a time when employment-related benefits usually cease and health becomes a growing priority. As a homegrown insurer with more than 50 years of experience navigating the financial realities of everyday Malaysians, HLA developed the HLA Future Secured as a timely response to some of Malaysia's biggest national concerns. According to the Khazanah Research Institute, over 90% of Employees Provident Fund members under the age of 30 lack the basic savings needed for a comfortable retirement. In addition to that, the Department of Statistics Malaysia (DOSM) estimates that by 2040, nearly 6.4 million or 17.3% of Malaysians will be aged 60 and above. With Malaysia's population ageing rapidly, healthcare costs for critical illnesses on the rise, and retirement savings falling dangerously short, many future seniors may struggle to afford even basic medical care. HLA Future Secured Rider is a forward-looking plan that offers early, flexible payouts and continuous living benefits, redefining traditional life insurance by providing support when it's needed most. This plan aims to bridge that gap by allowing policyholders to access their benefits upon diagnosis of selected medical conditions or hospitalisation, starting from age 60. In the event of a diagnosis such as Parkinson's, dementia, or a stroke – or if hospitalisation costs exceed RM70,000 – it allows policy holders a drawdown of up to 70% of the sum assured to help ease financial pressure and support recovery, allowing you to continue living with dignity in the face of life's battles. The benefit also activates when admission to the Intensive Care Unit (ICU) extends to 10 days or more, providing timely financial relief when it matters most. Sometimes, life also throws us into situations we never imagined – an illness or disablement that suddenly makes even the simplest daily tasks feel out of reach. With this plan, there's up to RM4mil in coverage to help shoulder some of that weight. If you're no longer able to manage at least three Activities of Daily Living (ADLs) – like bathing, dressing, eating, moving around, or managing continence – the payout kicks in right from Day 1 of the policy. Ongoing care The Continuous Support Benefit, created to ease the burden for those facing serious health challenges such as stroke, dementia, or Parkinson's disease, is especially significant to HLA, given the steep costs tied to long-term care for these conditions. The lifetime cost for an ischemic stroke – the most common type in Malaysia — is estimated at RM36,400 per patient. Meanwhile, the Alzheimer's Disease Foundation Malaysia (ADFM), revealed that dementia cases are projected to spike by 312% by 2050. The ADFM also estimates that the total cost, factoring in social support and unpaid family care, averages around RM3,095 per person. To help ease these financial strains, the Continuous Support Benefit provides a monthly payout of 1% from the sum assured if policyholders are diagnosed with any of these debilitating conditions – offering a steady stream of financial relief. Vital lifeline As Malaysia's population ages and healthcare costs continue to climb, stories like Asha's serve as a stark reminder of the urgent need to plan ahead. While not every crisis can be foreseen, financial preparedness can mean the difference between stability and sacrifice. HLA Future Secured offers a crucial safety net, easing the financial burden on families and caregivers during life's most challenging moments, empowering Malaysians to secure a confident, joyful and dignified journey into their golden years. Live out your golden years on your own terms and own the freedom of having choices and support when you need it. Scan the QR code to find out more about HLA Future Secured.
Malay Mail
19-06-2025
- Health
- Malay Mail
Cooling crisis: Why Malaysia's urban trees are critical in the heatwave battle
KUALA LUMPUR, June 20 — You're enjoying a bowl of cendol under a large angsana tree. The sun is at its peak, with temperatures reaching 33°Celsius. Yet, in the shade, the air feels cooler, and you feel at ease despite the blazing rays. As the planet warms, especially in countries of the Global South, the presence of trees in dense urban areas can mean the difference between life and death. Heatwaves have killed scores of people in the last five years and hospitalised hundreds as temperatures reached record highs. Between 2023 and 2024 alone, heat caused by the El Niño cycle claimed five lives, according to the Khazanah Research Institute. Its researchers have predicted a rise in heat-related illnesses in the coming years. How cities are built exacerbates the crisis. Urban centres, constructed with heat-trapping materials, create a phenomenon called the urban heat island (UHI) effect, where cities experience significantly warmer temperatures than surrounding rural areas, especially at night. Evapotranspiration: How trees act as natural air conditioners Trees are the most cost-effective solution to counter heatwaves, although more public education is needed, said Associate Professor Ts Dr Sreetheran Maruthaveeran, a Certified Arborist and Senior Lecturer in Landscape Architecture at Universiti Putra Malaysia (UPM). 'Trees enhance the microclimate of an area through the process of transpiration. During this process, trees release water in the form of vapour primarily through their leaves' stomata, as well as via evaporation from surfaces like leaves, flowers, and stems,' he explained. 'As water evaporates during transpiration, it absorbs heat from the surrounding environment, leading to a cooling effect. This is particularly noticeable under tree canopies, where transpiration significantly reduces air temperature.' In cities, this transpiration helps mitigate the UHI effect by cooling the air and increasing humidity, making urban environments more liveable and comfortable. If it's shady, it's cooler The UHI effect is caused by several factors, including urban construction materials that trap heat and reflect less light than natural ground cover. Hard surfaces like concrete and asphalt contribute to higher temperatures by reflecting less radiation back into the atmosphere. Tree canopies provide shade that blocks direct sunlight from heating these surfaces, effectively preventing heat gain, said Dr Ruzana Adibah Mohd Sanusi, laboratory head at UPM's Institute of Tropical Forestry and Agroforestry. 'Tree cover in cities can lower air temperatures by up to 8°C and land temperatures by up to 12°C,' she said. 'Trees help keep cities cool by blocking direct sunlight, reducing surface temperatures.' A field of dried grass reflects the ongoing hot and dry weather. — Picture by Raymond Manuel So why are more trees being cut down? Concerns are growing about trees being felled as local authorities respond hastily to incidents of fallen trees damaging roads or vehicles. Experts say balancing preservation and harm reduction is challenging. Increasing public awareness about the critical role of trees in urban climate mitigation has sparked calls for greater protection, particularly of older trees. However, this often clashes with city councils' safety-first policies, which sometimes result in excessive tree removal. Sreetheran noted that city councils are actively involved in tree preservation and public education, but improvements are needed. One major issue is the shortage of arborists, which hampers effective tree management. 'It's timely for city or town councils to train more officers in arboriculture or urban forestry,' he said, adding that courses by the Malaysian Society of Arborists (PArM) could help. 'These courses cover tree biology, maintenance, pest and disease management, pruning, and other relevant topics.' Public awareness is also key. Ruzana said city dwellers can act as safeguards against indiscriminate or illegal tree felling, but public understanding of trees' importance to urban ecosystems remains low. 'The public must understand the importance of trees and act as oversight to help preserve them,' she said. Are there regulations governing the cutting down of trees? Local governments often enforce rules for tree cutting under the Tree Preservation Order (TPO), enacted through the Town and Country Planning Act 1976 (Act 172). The TPO is meant to protect trees from being felled, damaged, or uprooted without permission from local planning authorities. Sreetheran explained that the TPO prohibits cutting trees with a girth exceeding 0.8 metres, as well as those with significant aesthetic, historical, or ecological value, regardless of size. Violations can result in fines of up to RM100,000 or imprisonment of up to six months. However, activists and residents argue that enforcement of the TPO is lacking, with inadequate mechanisms to audit local governments' actions on trees. This has led to allegations of indiscriminate tree cutting, even in cases where trees provide critical shade and cooling for urban areas. 'To date, Selangor, Perak, and Melaka are the only states in Peninsular Malaysia to have successfully adopted the TPO Rules in 2001, 2011, and 2017, respectively,' Sreetheran said. He added that poor awareness and rapid development hurdles have hindered wider adoption of the TPO in Malaysia.
Free Malaysia Today
18-06-2025
- Health
- Free Malaysia Today
Fix food policy now or face health crisis, says economist
Economist Jomo Kwame Sundaram speaking at EPF's International Social Wellbeing Conference in Kuala Lumpur today. KUALA LUMPUR : Malaysia must urgently reform its food and nutrition policies, especially for young children, to improve long-term health and development, says economist Jomo Kwame Sundaram. Speaking at EPF's International Social Wellbeing Conference here today, the Khazanah Research Institute adviser said many government nutrition programmes were low in quality and did not meet basic dietary needs. He also criticised the government's reliance on market mechanisms like the sugar tax, saying these alone were insufficient. 'The sugar tax is not working well. We need real rules and changes in how people eat,' he said in his keynote speech for the session titled 'Living Longer: Is Malaysia Ready for the Challenges Ahead?' 'People must be encouraged to eat fresh, healthy food again. Not everything can be solved by taxes.' In 2019, Malaysia introduced a sugar tax of RM0.40 per litre for sweetened beverages which it raised to RM0.50 in 2024, with plans to hike it to RM0.90 this year. While the tax has led to some product reformulation, its impact on public health remains under debate. Jomo described Malaysia's surging diabetes rates as a serious warning sign, saying prevalence had tripled since the 1980s, with nearly one in four adults now living with the disease. 'This shows that our past health campaigns have failed. We must act before it gets worse,' he said. He cited the 1970s village midwife programme as an example of an effective, low-cost public health policy that reduced maternal and child mortality but was never scaled up. 'These ideas worked well before. But we didn't build on them,' he said. He urged the government to adopt a 'whole-of-government and whole-of-society' approach to issues such as poor nutrition, ageing, and unequal access to care. 'This should not be led by companies trying to sell products,' he said. 'We need to talk about real solutions for everyone's health and well-being.'
The Star
16-06-2025
- Health
- The Star
Heavy price of education
Under pressure: A Universiti Putra Malaysia study among 1,211 students from public and private higher educational institutions in 2021 found 60.5% of them reporting symptoms of anxiety, while 45.6% were depressed and 40% stressed. — AZLINA ABDULLAH/The Star PETALING JAYA: Constant pressure to succeed and outdo their peers, and concerns whether their degrees will land them suitable jobs are causing many university students to suffer from stress and burnout. Some of them also cited financial constraints, particularly those in private institutions having to take out loans for tertiary education. Compared to the days of their parents, these students said the pressure of the job market is more intense now. 'Although there was stress in the past, the combination and intensity of factors in the present day make things far worse. 'Financial strain, academic overload and uncertain job prospects create a stressful circle for students,' said 21-year-old Dhanika Nagarajan from Desa Petaling, who is pursuing a degree in English studies. A Universiti Putra Malaysia study among 1,211 students from public and private higher educational institutions in 2021 found 60.5% of them reporting symptoms of anxiety, while 45.6% were depressed and 40% stressed. The study found that students at public institutions were less likely to experience depressive symptoms than their peers at private institutions. It also found that students at private institutions faced significant psychological distress, attributed to factors such as online classes, high tuition fees and extended semesters which incurred additional fees. Nurul Adlin Nor Mohd Fauzi, who is pursuing a degree in sports management, said the competitive labour market is her main worry. 'Concerns about the future and the relevance of their degrees are common among students who fear that they will not be able to find jobs in their field of study. 'Graduates typically take low-paying, part-time or unrelated jobs due to skills and job demands that do not match, causing them to become frustrated,' she said, adding that the problem was compounded if they had loans to repay. In a 2024 paper, think-tank Khazanah Research Institute found that about one-third of graduates worked in jobs that did not align with their qualifications or fields of study. Its researchers said alongside youth unemployment, under-employment demanded attention as it impacted long-term career prospects. Student Fathin Nur Nabila Md Zin said her peers were under immense pressure while battling anxiety, stress and burnout silently. She said many were overwhelmed trying to balance academic pressure, financial burdens and personal responsibilities. Psychology student Dhurkkahsri Pushpa Lingam, 22, from Kuala Selangor, shared that academic stress was also caused by modern syllabus which was 'heavily loaded'. Mass communication student Muhammad Adam Ariff Ramli, 21, from Seremban, highlighted the fear of missing out among university students, who constantly compared themselves with peers. 'This can slowly affect the mental state with anxiety building up,' he said.
