Overview on built environment planning: Residential overhang factors in malaysia affordable housing

Abstract

Affordable housing remains a prevalent issue in the country. The definition suggests affordable housing as adequate housing in quality, location, and known as not so costly that prevents its occupants from meeting other essential living needs. In the effort of providing sufficient affordable housing, various affordable housing programs, namely Residensi Wilayah and PR1MA, are currently in the market with the aims to develop and deliver new affordable housing, which targeted the middle-and low-income group. Although the lacking of affordable housing persists, the severe glut in the property market has also records to reach an all-time high. The overhang crisis in the country became an infamous issue in the country with the slow market, which led to the increase in the overhang unit’s statistics year over a year which partially in affordable housing segmentation. It is highlighted that the overhang in affordable housing has shown significant rising despites of its strong demand. This paper attempts to examine the overhang issue in affordable housing in Malaysia and related factors. This research will add up some points of discussion as regards the impact of the Covid-19 Pandemic towards the issue of affordable housing and the strategies in reducing the overhang issue during the pandemic. A review of the past literature related to the topics was carried out and data derived from journals, reports, and websites were gathered and examined to establish the framework on this issue and to identify the overhang factors in affordable housing. The developers are urged to build houses that can cater to the demand of buyers in terms of the property type, location, and also price range. The overhang units did not attract the target market while the product mismatch is one of the contributing factors. Other related factors are affordability, high living costs, and stagnant income growth, cooling measures, financing, unsuitable location, accessibility, the lack of timely and accurate data of buyer’s preference including the shift in demand towards the better-quality project. A study on the overhang factors of affordable housing is needed to resolve the issue, or else, the overhang issue will be worsened and will create a lot of negative impacts in the future. At the end of the research, the list of the property overhang factors and its framework able to be identified and to be used as guidelines and references to the public.

Housing Supply Model for Affordable Homes in Malaysia

“…Thirdly, the spatial geographical location. Adzhar et al (2021) highlight factors that could lead to an overhang of affordable houses are social stigma on affordable houses due to unsuitable locations and accessibility. This means that housing developers anticipate developing a low marginal profit for affordable housing, and the location to develop affordable housing should be more attractive for buyers.…”

Modelling Property Overhang Using Stigmatised Property Dimensions

“…This perception will influence the decision of the homebuyers when purchasing the property. For example, houses with murder, unnatural death, haunted (Gourley, 2016), past flood incidents, landslide phenomena (Adzhar et al, 2021), and former abandoned housing projects (Ibrahim & Maimun, 2022). Therefore, if the prospective buyer becomes aware of such stigmas, they will certainly decline to purchase a property in the residential area.…”

Factors Influencing Property Overhang in Residential and Serviced Apartments in Malaysia: A Thematic Review

“…Integration of economic activities is essential for an effective housing finance system (Ab Rahim et al, 2019). The increase and substantial growth in house prices (Adzhar et al, 2021), especially price (escalating house prices in major cities) (Ab Rahim et al, 2019) make possible house price increase beyond the median price (Olanrewaju & Arazi, 2019) and indirectly can cause house price not match buyers' monthly income (Nor, 2021). Due to sudden high house prices (Yip et al, 2020;Soon & Tan, 2019;Adzhar et al, 2021;Wong et al, 2018), house buyers delayed their purchase decision (Chuan & Abdul, 2016) moreover no incentives (Nor, 2021) provided for buyers.…”

“…The ability of buyers to place a down payment (Soon & Tan, 2019) appears as a factor under financial, while an adverse credit history (Adzhar et al, 2021;Ab Rahim et al, 2019) poses a significant barrier. The inability of buyers to secure end financing, together with a lower margin of financing offered (Adzhar et al, 2021;Ab Rahim et al, 2019), further contributes to the property overhang.…”

“…The ability of buyers to place a down payment (Soon & Tan, 2019) appears as a factor under financial, while an adverse credit history (Adzhar et al, 2021;Ab Rahim et al, 2019) poses a significant barrier. The inability of buyers to secure end financing, together with a lower margin of financing offered (Adzhar et al, 2021;Ab Rahim et al, 2019), further contributes to the property overhang. As highlighted by Soon & Tan (2019), prudent lending policy by banks is stricter for the application of mortgage loans, and the stringent criteria adopted by banks (Adzhar et al, 2021) are unable to obtain financing (Mohd et al, 2022) by buyers.…”