Conceptual framework for minimizing mismatch of developer, buyer and government intervention for middle income housing

Abstract

The housing demand of the middle-income group cannot be ignored as they are the majority, or about 40 % of the population in Malaysia (Budget 2016). Previous research has given emphasis on the affordability issue which has been tackled by the government through several housing schemes. However, mismatches still exist and persist, particularly in terms of insufficient supply to meet demand and also the existing supply fails to meet the housing preferences of the middle-income group. Thus, the present study aims to fulfill three objectives: to determine the middle-income housing preferences, to investigate factors that can overcome the insufficient supply of the middle-income housing from the perspective of government intervention and developer behaviour, and to develop a conceptual framework for minimizing mismatch concerning the middle-income housing focusing on developers, buyers and government interventions. This study was conducted in Johor Bahru using mix method approach. For the quantitative approach, the data were collected from 402 middle-income group respondents with monthly earnings of RM2,500 – RM15,000. For the qualitative approach, data were gathered from semi-structured interviews with several developers and local authority. The data were analysed using descriptive analysis, conjoint analysis, and content analysis. Results reveal that the most preferred housing profiles for middle-income housing are houses in the price range of between RM100,000 to RM200,000, located near schools, terrace in type, with floor plan of between 1001 to 1500 square feet and with four bedrooms. The findings also show that factors that can overcome the insufficient supply include regulations, incentives for developers, expedition of purchaser selection process, and emphasis placed on demand and supply data in planning approval. These findings were then included in a conceptual framework that portrays ways to minimize the housing mismatch. The framework demonstrates that the mismatch caused by profit-oriented developers leading to insufficient supply could be reduced by emphasizing the aspect of housing supply and demand in planning approval, controlling the developer activities by law enforcement, and providing incentives. The mismatch could also be reduced by emphasizing the aspect of housing preferences before embarking on any housing project.