Subsidy for house buyers may help to address the country’s property glut in the short term, but it is not a solution for the long term, which can eventually bottleneck and cause unnecessary inflation of house prices, according to the Asian Strategy & Leadership Institute’s (Asli) Centre for Public Policy Studies (CPPS).
CPPS senior policy analyst Jarren Tam said historically, Malaysia has leaned towards a supply-driven housing policy, which means that the government focuses on factors such as cost reduction, provision of cheap foreign labour, subsidies to suppliers for technology adoption and credit market leniency for loans.
“But we often neglect the demand (buyer) side, and a common approach to housing policy is subsidy. They use subsidy to help buyers to tackle the downpayment and interest rates. But subsidy is administratively expensive to implement because you have to allocate a large amount of money to many people considering that Malaysia’s income level is so low now.
