Develop Well-Functioning Rental Market As Policy Priority: Experts

Develop Well-Functioning Rental Market As Policy Priority: Experts

Experts have suggested that developing broader alternatives to home ownership, including a well-functioning rental market, should be pursued as a policy priority.

In a statenment today, Bank Negara Malaysia (BNM) said the suggested need for alternatives highlights the adverse consequences that poorly designed incentives to increase home ownership can have on housing affordability over the longer term.

"It also provides a viable route to help low-income and early career individuals onto a path towards eventual home ownership," it said, adding better enforcement is also critical to prevent the abuse of schemes intended to assist specific household segments to own or rent homes.

The central bank was referring to the discussions raised at the fourth Economics Research Workshop yesterday, themed "The Housing Market: Issues and Policy Options".

The one-day conference was attended by representatives from financial institutions, government agencies, property developers, academia and think-tanks. It aimed to examine key issues in Malaysia's housing market, drawing on current research conducted on housing affordability, demand and supply mismatches and the drivers of property prices.

Besides, BNM said, the discussions also noted that incentives for increasing home ownership should be carefully considered, so as not to blunt the effectiveness of market mechanisms which work to correct housing imbalances.

"The need to ensure that price thresholds adopted for affordable houses are appropriate was also highlighted, noting that house prices remain out of the affordable reach for many low- and middle-income households," it said.

It pointed out that the discussions also agreed that while households require access to credit to own a home, it is not in their own interest to incur an unsustainable level of debt to do so.

"Policy measures to ensure access to credit must be pursued with concern for the protection of homebuyers from financial hardship, leading to foreclosure and poorer welfare," it added.

Source: Bernama.com

 property market, housing development, renting property, Bank Negara, affordable homes, government

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