Homeownership Gaps among the Middle Income Group in Malaysia

Abdul Muhaimin Zamri


Housing is one of the basic human needs as mention in the popular Hierarchy of Human Needs from Maslows’s Theory of Human Motivation. Ever since Malaysia achieved independence, the Malaysian housing policy has focused on efforts to provide housing for citizens in the low-income group in Malaysia. However, in pursuing a freemarket approach, the government has given the responsibility of providing affordable housing for the middleincome group to the private sector. After many years, statistics show that affordable housing for the middle-income group in Malaysia has been increasing in price at a rate that outpaces the increase of household income, making the houses unaffordable to the middle-income group. To make things worse, the home loan default rate among Malaysian house buyers has prompted the Banks in Malaysia to tighten their terms of house loan eligibility. Thus, homeownership rates decreased; the dramatic gaps in homeownership rates have been documented over the last several decades, and even increased somewhat during the decade of the 2000s. This research aims to review the literature on affordable housing, existing homeownership gaps, and financial risk faced by middle-income buyers. The literature review analyzes policy documents, articles, and secondary literature sources related to the current issues discussed in the public domain. The outcome of the analysis is hoped to assist policymakers to formulate better housing policies and highlight the areas where further research is warranted. In conclusion, the suggestions on how to close the homeownership gaps hopefully will highlight the existence of homeownership gaps that warrant further policy research.


Homeownership gaps, affordable housing, Middle-income group

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