Government Exploration of Innovative Housing Models for Affordability Addressment in Budget 2026, Highlighted by Amir Hamzah
Malaysia is gearing up for significant changes under the 13th Malaysia Plan (13MP), with a focus on addressing housing challenges and improving affordability for its citizens.
Amir Hamzah, the Finance Minister II, has emphasised that affordable housing will continue to be a priority for Malaysia going forward. To achieve this, the government aims to increase the labour's share of the economy from 33% to 40%, as outlined in the 13MP.
The government is exploring new models to make homeownership more accessible, such as rent-to-own schemes and a shift towards a build-then-sell approach. Additionally, efforts are being made to expand the Housing Credit Guarantee Scheme (SJKP), which allows those without a fixed income to secure housing loans through government guarantees.
In an effort to strengthen household purchasing power, the government has implemented wide-ranging labour market reforms, including minimum wage increases, the push for progressive wages, and encouragement for companies to adopt living wages.
To safeguard affordability in the residential housing sector, the construction and supply of materials for residential projects are exempt from the service tax (SST). However, the expansion of the SST will affect the commercial sector.
Amir Hamzah has reaffirmed that the RON95 fuel subsidy rationalisation plan, scheduled for implementation before the end of 2025, will utilise the national identification card (IC) system to ensure that the majority of people receive the subsidy. This is part of the government's commitment to ensuring more Malaysians, especially those in the lower and middle-income groups, can own homes that are within their financial means.
The Minister also addressed the issue of the overhang of residential units, stating that while there has been an increase since the first quarter of this year, the overall property market remains stable. He also highlighted the need for reforms to address structural issues in the property market.
Amir Hamzah further stressed that strengthening income levels is the most important area for affordability in the country. He stated that preparations for the Budget 2026 are underway, with a focus on strengthening housing reform and expanding access to affordable housing.
The government is also looking at new mechanisms to ensure more people can own and afford homes, such as urban redevelopment and the use of industrialised building methods to lower costs and accelerate construction. Furthermore, reforms are being made to the Housing Development Act for better consumer protection.
Under the 13MP, the government aims to improve affordable housing availability for lower and middle-income groups by targeting the delivery of one million affordable homes by 2035. This ambitious goal, coupled with the various reforms and initiatives outlined above, indicates a commitment to addressing housing affordability and improving living standards for Malaysians.
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