KUALA LUMPUR: The proposed Residential Tenancy Act is targeted for implementation in two years’ time to boost the residential rental market.
National Housing Department senior principal assistant director Noorihan Abd Halim said the first phase, which involved a study and data collection, was expected to be completed this year, while the act would be formulated next year.
“The act will assist us in determining the affordable rental rate based on location, as well as laws to protect both tenants and owners,” she said on the sidelines of the Constructing and Financing Affordable Housing Across Asia Conference, here, today.
Noorihan said it was one of the initiatives conducted to assist the younger generation, the bottom 40 per cent of the household income group (B40) as well as the middle 40 per cent of the household income group (M40).
“Right now, we do not have a standard for determining whether houses that are up for rent are affordable or not,” she said.
Noorihan said the act would protect tenants and owners if any dispute that were to arise during the tenancy period, as currently there was no tribunal for issues related to housing rental.
“The proposed Act will study the standards and benchmark used in the similar Act in New South Wales and Victoria, Australia, but will be tailored to the local context suitability,” she said.
She said houses in Malaysia were seriously unaffordable with an average market price of RM372,801, whereas the annual median yearly average household income was only RM188,208.
The Malaysian median monthly average household income is RM5,228.
“Based on the multiple median approach, a home is considered affordable if the median home price is less than three times the median household annual income.”
She said one of the main reasons contributing to the increase in house prices, which had reached the point of unaffordability, was the lack of coordination between the state and federal authorities.
“Both state and federal governments have powers over lands, which complicate matters, which is why we are now in the course of implementing the National Housing Policy (2018-2025) to boost home ownership and affordability,” she said.
– Bernama