Housing demand and supply

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The universal demand for housing increases over time primarily as a result of demographic trends and rising income 1. Since the rapid urbanization that began in 1960, a significant budget has been allocated for housing provision in every five-year Malaysian development plan, especially for the urban areas 2. The main factors that spur the strong housing demand are population growth and age profile, urbanization and migration, and household income. However, gender, occupation, education, and transportation costs also influence high public demand. Moreover, housing demand can also be associated with the preferred housing choices of local homebuyers, which mainly vary in terms of housing category, zone, project size, and project period 3.

Table 11.2 indicates population growth, density, and urbanization in Malaysia from 1970 to 2020. The Malaysian population has increased from 10.4 million to 28.3 million at an average rate of 2.5% over the past four decades (1970–2010), which denotes an increase of almost three times. The population size is expected to reach 31.6 million in 2020 at an average growth rate of 1.1%, as per the projection of statisticians. The population density in Malaysia increased from 31 people per square kilometre in 1970 to 42 in 1980, then to 56 in 1991 and to 71 in 2000. Likewise, the level of urbanization in this country also increases. The percentage of the population residing in urban areas increased from 26.9% in 1970 to 34.2% in 1980 and 50.6% in 1990. By 2000, more than two-thirds of the population (61.8%) was located in the urban areas of Malaysia 4. Studies by national scholars 5, 6, 7 substantiated this scenario by reporting the decline of the rural population to 36% and the steady growth of the urban populace in 2005. These circumstances aggravate competition among private housing developers to fulfil housing needs and enhance housing development in the country.

The Malaysian government addresses the substantial increase in housing demand through the MHLG. This department has actively set the direction for national development plans with respect to housing 8. At present, it provides input and directs issues related to housing deliberation, needs, and target numbers. Furthermore, it collaborates with other parties to implement related programmes, strategies, and plans. Aside from the aforementioned responsibilities, the critical role of MHLG is to monitor the effectiveness of housing procedures in Malaysia to protect the benefits of all stakeholders.