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The State of Klang Valley Affordable Housing Supply

30 November 2021 - Over the last decades, housing affordability is considered as one of the major concerns globally. In Malaysia, housing affordability is defined as ability of low-income earners or Bottom 40% (B40) to own a house. The soaring of living cost and rising of property price has created adverse impact on low-income family and thus making it more difficult for them to own a house. Apparently, there is still mismatch of supply and demand of affordable housing in Malaysia.

Klang Valley Population Growth of 2.1% From 2017 to 2021

In the last 4 years, Malaysia population grew an additional of 0.6 million about 2% or 0.5% annually from 32 million people in 2017 and estimated at 32.6 million people by end of 2021. Meanwhile, population of Klang Valley stood out at 8.3 million people (24.7% of total Malaysia’s population) in 2017 and grew approximately by 8.4 million people (25%) in 2018. By the end of year 2021, the population in Klang Valley will be at 8.4 million people about a quarter of Malaysia’s population considering figures provided by Department of Statistics Malaysia (DOSM). Population in Klang Valley is expected to grow at 0.5% annually. Refer to the chart Population in Malaysia and Klang Valley.

Population in Malaysia and Klang Valley

Over half a million supply of Klang Valley Affordable Housing: The Existing, Incoming and Planned

Referring to NAPIC/JPPH research, Malaysia has currently 5.9 million existing property supply in 2021. It is estimated that Klang Valley housing supply is 2.1 million. However, only a quarter (530,101 units) of the existing stock are affordable housing. Klang Valley Affordable Housing (KVAH) supply is expected to grow additionally incoming of 4,002 units and planned 7,343 units. Refer to the chart KVAH supply for 2021.

Klang Valley are supported by 7 affordable housing programmes

To cope with housing affordability issue, 7 notable Klang Valley Affordable Housing (KVAH) programmes have been launched namely Residensi Prihatin, Rumah Selangorku, Residensi Wilayah, Rumah Idaman, 1Malaysia People’s Housing Programme (PR1MA), Malaysia Civil Servant Housing (PPAM), Private Affordable Ownership Housing Programme (MyHome) and many more.

  • PR1MA has 4,636 in Kuala Lumpur and 5,081 units in Selangor are under construction.

  • PPAM on the other hand has a total of 5,043 units completed in 2020 nationwide

  • MyHome has 1,168 units housing supply allocated for Selangor

  • Rumah Idaman (RI) recently announced with 42,992 units of 1 size at 1,000 sqft at RM 250,000 approved from Selangor Chief Minister office on 31 Jul 2021

Deep dive into KVAH’s Residensi Prihatin, Rumah Selangorku and Residensi Wilayah

This report will highlight selectively the state of 3 affordable housing programmes i.e., Residensi Prihatin, Rumah Selangorku and Residensi Wilayah covering 15 mukim (sub-district) and 38 areas within Klang Valley. For simplicity, the three programmes mentioned will be called as KVAH Tri-Programme.

PR1MA, PPAM, MyHome, Rumah Idaman programme will not be covered due to limited available information from the public domain.

Klang Valley Affordable Housing (KVAH) Tri-Programme

The first 2 programmes are Federal Territory (Wilayah Persekutuan) that target middle income earners to own their first house namely Residensi Wilayah (RW) and Residensi Prihatin (RP) for Putrajaya

The third programme from Selangor government called Rumah Selangorku (RSKU) on the other hand refers to housing programme that is established with aim to support developers to produce affordable houses to qualifying citizen based in the state of Selangor.

Based on data published from the official site of RW, RP and RSKU, KVAH Tri-Programme has currently 72 affordable housing projects amounting 53,244 units reported in 2021. Refer to the chart KVAH Tri-programme supply

KVAH Tri-programme supply

Residensi Wilayah (RW) surpasses the other two programmes with largest number of housing projects estimated at 43 projects, leaving Rumah Selangorku (RSKU) as second place (15 projects) followed by Residensi Prihatin (RP) with14 projects.

As RW dominates with a supply of units (29,952 units). RP (15,061 units) is set to overtake RSKU (8,231 units) in 2024. The upcoming RP has higher tendency to become one of the main supplier for affordable housing as it has nearly double the total units of RSKU. Refer to chart KVAH Tri-Programme Projects By Completion Year and KVAH Tri-Programme Units By Completion Year.

KVAH Tri-Programme Projects By Completion Year and KVAH Tri-Programme Units By Completion Year

KVAH Tri-programme supply in 2024 contributes the highest number of units than any other year. There is is projection of steady growth seen in three consecutive years, 2022, 2023 and 2024. However, it will experience a drop from 16,868 units in 2024 to 2,166 units in 2025. Refer to chart KVAH Tri-programme Yearly Supply

KVAH Tri-programme Yearly Supply

On the favourable note, the recently approved Selangor’s Rumah Idaman at 42,992 units (not shown in the chart) may be a game changer and dominate the KVAH sector.

50% of units are located within 10 km radius of KLCC

The following chart shows distance radius from KLCC for corresponding 15 mukim and 38 areas. Half of the units (27,083 units) are located within 10 km radius from KLCC namely mukims are Ampang, Batu, Seputeh, Setapak, Lembah Pantai and some parts of Cheras. For more information, please refer to another article The Spatial Distribution for Klang Valley Affordable Housing where this article highlights the current state for spatial distribution in KVAH.

Majority (53.7%) unit size is 701-800 (sqft)

Each programme offers different sizes (sqft) starting from 700 sqft and up to 1,000 sqft. The most common size is 701-800 (sqft) with more than half of total units (53.7%) followed by 801-900 (sqft) with 28.8 %. Others (15.5%) and 901-1,000 (sqft) with 2.1 % constitutes 3 different types namely Type A (700 sqft), Type B (750-799 sqft), Type C (900-999 sqft) and Type D (1,000 sqft).

For the size of 701-800 (sqft) category, Putrajaya contributes the largest units for housing estimated at 12,349 units (23.2%) that is expected to complete in 2024. The unit size of 801-900 (sqft) are largely supplied in mukim Seputeh projected at 6,076 units (11.4%). The unit size of 901-1,000 (sqft) are mostly located at Setapak with approximately 1098 units (2.1%).

In the Others category, it indicates multiple range for unit size in Rumah Selangorku programme. Refer to chart KVAH Tri-Programme Units by Size.

Most common (41% of total units) unit price between RM240,001 and RM300,000

The most common price for Klang Valley affordable housing is projected at price range of RM 240,001-RM 300,000 (41.4%) about nearly half of total units followed by RM 100,001-RM 200,000 (35.7%) as the second highest, Others (15.5%) at RM 200,001-240,000 (7.4%).

For price range of RM 100,001-RM 200,000, Putrajaya surpasses other areas supplying 12,349 units (23.2%). Setapak on the other hand dominated RM 240,001-RM 300,000 price range segment with 9,250 units (17.4%).

The category Others indicate multiple ranges of price in Rumah Selangorku programme comprising 3 different types namely Type A (From RM 42,000), Type B (From 100,000), Type C (From 180,000) and Type D (From 250,000). Refer to chart KVAH Tri-Programme Units by Price.

Most common pricing range are split at RM 251-RM 300 range and RM 351- RM 400 per sqft accounts to 35.7% and 28.6% share respectively

The most common price range are RM 251 - RM 300 with more than a third of total units (35.7%) followed by RM 351 - RM 400 with 28.6 %, the categories Others (15.5%), RM 301 - RM 350 (12.9%) and RM 201 - RM 250 (7.4%). The lower price range at RM 251 - RM 300 Price per sqft are mostly supplied at Putrajaya with 12,349 units (23.2%). On the higher price range, Setapak is priced at RM 351 - RM 400 constituting a total of 7,037 units (13.2%).

In the Others category, there are multiple price range offered by Rumah Selangorku programme. Refer to chart KVAH Tri-Programme Units by Price per sqft.

In short, KVAH Tri-Programme provide a promising affordable housing up to 54,000 units until 2026. The expectation 42,992 units from Rumah Idaman, as the main supplier, may further providing total of close to 100,000 units apart from Residensi Wilayah and Rumah Selangorku. The most common price for KVAH is estimated at RM 240,001 - RM 300,000, pricing range are split at RM 251-RM 300 range and RM 351 - RM 400 per sqft, and majority of unit size valued at 701-800 sqft.

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