Defending the motion: Andrew Oswald, Professor of economics, University of Warwick
"High home-ownership in a nation is like a treacle blanket thrown over the surface of the country and economy. With a high degree of owner-occupation, everything slows..."
Against the motion: Richard K Green, Director of the USC Lusk Centre for Real Estate
"Generally, the question policymakers ask is whether home-ownership should be encouraged, which suggests that there are social benefits to owning a home..."
More:
http://www.economist.com/debate/days/view/882
It is interesting to note the differences of opinions elsewhere, as well as our own priorities in Malaysia.
Our situation is unique in a way, where Bumiputeras were and are still given special discounts (ranging from 5% to 10%) when buying houses or apartments in new development projects. The controlling authorities would specify or agree on the rate of discount proposed, before Development Order and Advertising Permit are approved. The main point of contention is that there are no ceiling price for this discount to be applicable. Though the intention was good under affirmative policy to help the Bumiputeras, even Tan Sris are entitled to discounts when purchasing multi-million Ringgit houses!
We used to have low-cost houses and apartments priced at Rm25,000, which many developers were forced to provide in large housing schemes. Despite the high costs of land and building materials, developers had to build such houses. In effect, those units had to be subsidised by higher priced ones so that they could make profit overall. In actual fact, some influential developers managed to flout the requirement (at the risk of not getting Certificate of Fitness for Occupation) and managed to get away, without even being blacklisted!
The other main problem in relation to low-cost units was the unfair allocation. Many people who were ineligible got them through bribing, working for the developers, or having connections with the ruling party. I managed some small projects (medium cost houses) in KL before, and I was glad the allocation for Bumi units were done by DBKL!
Currently, many potential first-time house-buyers are excited over the government's proposed initiative in providing 'affordable' housing. The so-called affordability is subjective, and truth be told, not many young couples are able to buy without initial financial assistance from their parents. The locations of such projects are usually not well served by public transportation. For a project to commence from planning, approval, construction and completion with CFO would take at least a few years!
There is always the problem of mismatch in the choice of location. A project called Lahat Indah, near Ipoh, by the national housing corporation (SPNB), has more than 20 units priced from Rm100,000 unsold!
Personally, having seen some really small units in Europe, I think Malaysians are a really pampered lot. To make housing more affordable to first-timers in KL and PJ, we should build more studio units (even as small as 300 sq. ft.!) for them to start with. They should plan to move to a bigger unit when they are ready to start a family. Both husband and wife of most couples are working, and they just need a place to rest and sleep for a few hours each day.
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"High home-ownership in a nation is like a treacle blanket thrown over the surface of the country and economy. With a high degree of owner-occupation, everything slows..."
Against the motion: Richard K Green, Director of the USC Lusk Centre for Real Estate
"Generally, the question policymakers ask is whether home-ownership should be encouraged, which suggests that there are social benefits to owning a home..."
More:
http://www.economist.com/debate/days/view/882
It is interesting to note the differences of opinions elsewhere, as well as our own priorities in Malaysia.
Our situation is unique in a way, where Bumiputeras were and are still given special discounts (ranging from 5% to 10%) when buying houses or apartments in new development projects. The controlling authorities would specify or agree on the rate of discount proposed, before Development Order and Advertising Permit are approved. The main point of contention is that there are no ceiling price for this discount to be applicable. Though the intention was good under affirmative policy to help the Bumiputeras, even Tan Sris are entitled to discounts when purchasing multi-million Ringgit houses!
We used to have low-cost houses and apartments priced at Rm25,000, which many developers were forced to provide in large housing schemes. Despite the high costs of land and building materials, developers had to build such houses. In effect, those units had to be subsidised by higher priced ones so that they could make profit overall. In actual fact, some influential developers managed to flout the requirement (at the risk of not getting Certificate of Fitness for Occupation) and managed to get away, without even being blacklisted!
The other main problem in relation to low-cost units was the unfair allocation. Many people who were ineligible got them through bribing, working for the developers, or having connections with the ruling party. I managed some small projects (medium cost houses) in KL before, and I was glad the allocation for Bumi units were done by DBKL!
Currently, many potential first-time house-buyers are excited over the government's proposed initiative in providing 'affordable' housing. The so-called affordability is subjective, and truth be told, not many young couples are able to buy without initial financial assistance from their parents. The locations of such projects are usually not well served by public transportation. For a project to commence from planning, approval, construction and completion with CFO would take at least a few years!
There is always the problem of mismatch in the choice of location. A project called Lahat Indah, near Ipoh, by the national housing corporation (SPNB), has more than 20 units priced from Rm100,000 unsold!
Personally, having seen some really small units in Europe, I think Malaysians are a really pampered lot. To make housing more affordable to first-timers in KL and PJ, we should build more studio units (even as small as 300 sq. ft.!) for them to start with. They should plan to move to a bigger unit when they are ready to start a family. Both husband and wife of most couples are working, and they just need a place to rest and sleep for a few hours each day.
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