- 8 minutes ago
Malaysia's National Housing Policy 2026-2035 has renewed focus on homeownership access for gig workers and those without traditional proof of income. With the government's SJKP guarantee ceiling doubled to RM20 billion, the key question is whether easier access to financing can translate into sustainable homeownership without increasing household debt risks.
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00:08Hello, I'm Tamina Kausji and this is Niagara Spotlight.
00:11Today, our spotlight is on homeownership beyond payslips.
00:14Now, for millions of workers around Malaysia, earning an income does not always come with the paperwork banks require for
00:21homeownership.
00:22In fact, roughly 3.28 million people, nearly one in five of those employed around the country, were in informal
00:30employment back in 2025.
00:32Now, the recently launched National Housing Policy 2026 to 2035 prioritizes even wider access to home ownership.
00:41Under Budget 2026, the government did double the SJKP's guarantee ceiling from 10 billion ringgit to 20 billion ringgit,
00:48intended to support up to 80,000 additional first-time homebuyers.
00:53Yet, at the same time, access to credit is not quite the same as affordable ownership.
00:59Joining me online to discuss this timely topic in further detail are Dr. Konseil Stan,
01:05Research Fellow at the Centre for Market Education and Senior Lecturer at Siamen University, Malaysia,
01:11together with Mohamed Nazhan Kamaruzuki, Research Associate at Kazana Research Institute, KRI.
01:16A very good morning to the both of you. Thank you so much for making time for Nyaga Spotlight.
01:22Fantastic. So, Nazhan, perhaps if I could start off by us digging a little deeper into SJKP,
01:29which, of course, is the Scheme Jamina and Credit Perromahan that was first established in 2007
01:34to help first-time buyers with fixed and non-fixed income obtain housing finance.
01:40The newly launched National Housing Policy, 2026 to 2035, highlights it as a mechanism for young people
01:48and gig workers. A couple of preliminary thoughts on this from your side, Nazhan.
01:53Okay. Thank you, Tamina, for having me here today.
01:57So, let's start with a few facts on the housing finance landscape in Malaysia,
02:01as our core understanding throughout this morning's conversation, right?
02:05So, according to the Bank Negara Malaysia, the housing finance approval rate in the financial sector
02:11has been consistently high at around nearly 80% throughout the past years.
02:17And also, housing finance is the biggest portfolio in the consumer banking sector.
02:22So, well, it does make sense because housing finance is a good business deal to begin with.
02:29It is backed by an asset as the house becomes the collateral for financiers.
02:34And on top of that, we have the housing ecosystem that provides more comfort to the institution,
02:40i.e. the developers and also banks, compared to house buyer,
02:44especially when you deal with sell-then-build transaction.
02:48So, in case the housing project fails, the buyers are at more advantage compared to banks and developers.
02:56So, given this logic, what makes a bank to reject an application to housing loan?
03:02Perhaps it's due to credit worthiness.
03:04And perhaps also due to the amount of financing needed and the value of the house as a collateral
03:10do not appeal to the bank as a good business deal.
03:15Simply said, the house is too price for the bank as the house is too pricey for the bank
03:20as too unaffordable for the consumer.
03:23Well, for the first rejection scenario, the government-guaranteed program such as the SJKP
03:29was introduced to make certain groups eligible and get access to house financing,
03:35including the lower income.
03:37So, you are unbankable last time.
03:40Now, we provide some access and opportunity for you to get housing financing, house financing.
03:48So, is it good?
03:49Well, we have increased the financial coverage and accessibility.
03:54So, back to your...
03:56But the second thing is that we have also unaffordability issue coupled with high vacancy
04:03and also high numbers of unsold properties.
04:08So, what we have to change is really the landscape of housing.
04:11To make sure that housing supply is effective to our real demand.
04:17Then, we can talk more about what financing needed.
04:20In addition to that, we have to realize that the job market nature now is changing.
04:28There are more people in the informal sector.
04:30How we can cater their nature of work, their ups and downs in their nature of work
04:40so that our financing can consistently provide some sort of security to them
04:48throughout their life cycle.
04:50Thanks very much, Nazhan.
04:51There's a couple of moving parts there and you helped to illuminate that
04:54as a little bit of an introductory overview.
04:56Dr. Konseil, moving into your work on the Financial and Social Affordability Index,
05:03which found that income and house price alone cannot really tell us whether a home is affordable.
05:08Now, let's say for someone whose earnings change from month to month,
05:12which is very likely with those working in the gig sector or also informal work.
05:17In your opinion, what should be measured alongside the mortgage installment?
05:24Hi.
05:25So, we developed this index based on the balance between the financial affordability
05:31and social affordability.
05:32So, let's talk about the index first.
05:35For the financial affordability, we measure the ratio of the local median price
05:40of all transactions and local median household income.
05:45Both median values should be specific to a geographical area.
05:49So, we are able to look at smaller value compared to entire country.
05:55So, it's very targeted on specific area that we want to know.
06:00And furthermore, when we refer to the median price of all transactions,
06:05we are including those that occur in the secondary market.
06:10Whereas, for the social affordability, this is an interesting one.
06:15We include two elements that are crucial for social mobility.
06:19So, we include labour market conditions and transport connectivity.
06:24So, we use the unemployment rate and the participation rate to measure labour market conditions.
06:31Then, we use the number of available stations per 100,000 people and the number of available
06:38stations per 10 square kilometres in the same area for us to measure transport connectivity.
06:44And to be honest, measuring connectivity presents a more intricate challenge to us at that point of time.
06:51So, in this index I mentioned just now, we include income, house price, connectivity, and pliability.
07:00But particularly for someone who's earning change from month to month,
07:06buyers should consider their essential household expenditure,
07:11assisting debt commitments, and importantly,
07:13how much their income fluctuates from month to month.
07:17So, I would suggest stress testing the household budget using a lower income month
07:24rather than average or particularly good month.
07:28After paying the mortgage and essential expenses,
07:32there should still be a reasonable buffer for months when income falls or unexpected expenses arise.
07:41So, there's clearly also a lot of buyer's discretion which needs to be a part of the entire equation.
07:47Thanks for that, Dr. Consales.
07:48Nas Khan, now, SJKP does allow applicants without payslips to support their applications
07:53through bank statements, any kind of business records,
07:57or even confirmations of income from an authorised entity.
08:01Now, these can document past earnings,
08:03but repayment will, of course, still continue for potentially decades onwards.
08:08So, how ought banks to assess the stability of irregular income
08:13without unfairly excluding informal workers,
08:17or on the other hand also approving debt that becomes unmanageable during a bad month?
08:23Right, right.
08:24So, yeah, you are correct.
08:26Life is not linear.
08:27They are cloudy days.
08:28They are sunny days.
08:29They are very extremely sunny days.
08:32And they are days with floods.
08:33So, that should be our understanding here.
08:36So, to what extent we have to make sure the households reduce their expenditure
08:42in order to make repayment?
08:44That's, I don't know.
08:45But the assessment at the point of purchase is only one part of the problem.
08:49Just to get a loan approved, that's it.
08:53But a household may be perfectly capable of servicing the loan today,
08:58but experience temporary income short five or seven years or ten years later,
09:04or maybe during retirement.
09:05So, alongside with the underwriting the irregular income,
09:12housing finance should have predetermined mechanism
09:15for temporary repayment flexibility, restructuring, or other assistance.
09:20So, we have actually experienced this during COVID times, right,
09:24where banks gave the moratorium to the homeowners.
09:30That provides some sort of comfort or financial relief to homeowners.
09:36And the AKPK program, the credit management program also has helped
09:41to address number of cases related to housing loan repayment difficulties.
09:48So, what we need is today is to understand that shocks,
09:56we have some resilience in the economy.
09:59But when shocks happen, regardless whether you are in gig economy,
10:04you are informal, or even you are salarial,
10:08that you are formal sector, you still exposed to these shocks.
10:12And shocks can, nowadays, cannot be controlled.
10:16It's beyond our capability to manage it.
10:20So, that understanding, that flexibility that we need in the house financing program
10:29really can address our irregularity of incomes
10:34or our bad circumstances throughout our life cycle.
10:40And banks also clearly require building into their features
10:44for reviewing loan repayment, mortgages, etc., the human factor,
10:49especially with so many processes now being automated.
10:52It's really essential that reviewing from year to year
10:56and also perhaps looking at repayment cycles and even appeal processes,
11:02it's really important that you have a human in the loop
11:05and you're not completely automating that
11:07just in case the automation actually overlooks such human seasonal factors.
11:12Thanks for that, Nazhan.
11:13Dr. Consil, moving on.
11:15Now, the standard SJKP scheme, it does cap financing at roughly half a million ringgit,
11:22including specified protection and transaction costs,
11:25with the tenure moving up to roughly 35 years,
11:28which is basically two-generation financing also being allowed.
11:32Now, these features, while they can reduce immediate barriers to buying,
11:37how ought buyers to assess the total financing cost and the risks of that?
11:46So, at one hand, yes, I do agree that SJKP scheme can help lower income
11:53and irregular income households overcome the initial barriers to home ownership.
11:59However, buyers should look beyond the $500,000 financial ceiling
12:05and the monthly instalment.
12:07They need to calculate the total amount repayable over the entire tenure,
12:12assess how sensitive their instalments are to changes in interest rates.
12:17And, of course, they need to consider ongoing costs such as maintenance,
12:22legal and valuation costs, and not to forget insurance and tax.
12:27So, besides that, buyers should not just look at the 35-year commitment
12:35to servicing the housing load, but also consider how it can affect retirement savings
12:42and how are they going to fund their children's education and also financial flexibility.
12:49And not to forget, we need to consider extra savings in case of emergency.
12:55In the case of the two-generation financing, the family should carefully consider whether
13:03the repayment obligation could place a burden on their next generation.
13:09Ultimately, the question is not just whether buyers can secure the financing,
13:15but whether they can sustain home ownership without compromising their long-term financial security.
13:23So, of course, in summation, buyers ought to be able to see the full breakdown in ringgit and cents
13:29before committing to anything, and also at the same time ensuring that there are also exit options
13:35which are explicit should the burden, particularly for two-generation financing,
13:40actually become untenable.
13:42Dr. Concils, as well as Na-san, thank you for the conversation so far.
13:46We take a quick break and we'll be back right after with the rest of the conversation on Nyaka Spotlight.
14:10Welcome back. Still with me, Tamina Kausji on Nyaka Spotlight.
14:13And today, the topic of the day is looking at home ownership beyond pay slips
14:16and whether SJKAP can actually bridge this gap, particularly for a prospective up to 80,000 first-time homeowners,
14:25those coming especially from the sectors of gig work as well as informal employment.
14:30I'm on the line right now with Naz Khan from Kazana Research Institute,
14:34together with Dr. Concils Tan as well from Xiamen University, Malaysia.
14:39Naz Khan, jumping right back into the conversation.
14:42Now, a government guarantee, of course, supports the financing provided by participating institutions,
14:47but the borrower does remain ultimately responsible for full repayment.
14:52Can you tell us what kind of data ought to be prioritised to ensure the scheme is not accumulating higher
15:00-risk housing debt?
15:02All right. So, well, in assessing the government assistance programmes, right, in this case, this SJKP financing programme,
15:12we must not look only at the approval rate or to how many people that it has reached or assisted
15:20to become a homeowner,
15:22but we need also get whatever data that allows us to assess the well-being of the participants after they
15:32become homeowners.
15:34You know, becoming homeowners is not easy.
15:36You have to commit to repayment and other costs associated with owning a house,
15:43the IWK, the Strata Maintenance Fee, the electricity bills, the water bills, and et cetera.
15:52So, data such as numbers of NPL cases, default rates, ocean options, and liquidity will definitely tell you something
16:01on what the well-being aspect of the participants.
16:06So, we have to remember why we need to assess this way.
16:09We have to remember that the government guarantee programmes allow the unbankable group or the risky group
16:16that the banks don't want to deal with last time to take a huge debt, and it is a long
16:23-term commitment.
16:25So, maybe they become, you know, the well-being has improved to be, and as they become a homeowner,
16:33maybe it's not easy, it's not easy, easier for them to just not owning a house and to be in
16:40a rental market.
16:41So, the guarantee protects parts of the lender's risk, but the policy should ultimately protect the sustainability of homeownership.
16:50What data we should have first, I think the right monitoring framework should be established first,
16:56rather than data, the data that we need.
17:00So, the framework ideally should follow borrowers through the phases of an individual's life.
17:08Approval data remain important, particularly to understand who SJKP is reaching,
17:14but this should be complemented by many other indicators.
17:18The late repayment, there may be liquidity payments, in terms of when the NPL payments,
17:27the options payments, sorry, the options in their property, of their property,
17:34or any kind of assistance that the participant have reached to.
17:38So, what we need is the framework first, then the data will follow us so that we can have a
17:46good assessment
17:47on the well-being of these participants when they become a homeowner.
17:53And perhaps also publishing results by borrower cohorts would also be useful,
17:58because then it's actually a way to show how losses or benefits have been divided between households, banks,
18:04and also the government then.
18:06Thanks.
18:07Now, Dr. Consales, your Malaysian study identified the endowment effect, loss aversion,
18:12and herding as influences on housing decisions, based on a survey of roughly almost 600 respondents.
18:20Could government backing change how some buyers then perceive risk or reinforce the belief
18:26that purchasing is always financially preferable to renting?
18:30A couple of thoughts on this.
18:33Yeah, so for this study, we did it a few years back.
18:38So, we found that homebuyers exhibited these bodily rational behaviours significantly more than those buying a house for investment.
18:47So, people are focused on their emotional attachment and conform to social norms,
18:53where everyone is buying a house as the completions of their life go,
18:57especially after getting a job or before getting married.
19:03We also call this as FOMO, the phenomenon of fear of missing out on home ownership.
19:09And, of course, we also feel of future house price increases.
19:14This government packing could change some buyers' specific risks,
19:19but we must also create the awareness among homebuyers that there are other choices besides committing to such a housing
19:29load.
19:30The important distinction is that a government guarantee may reduce certain financial barriers,
19:38but it does not eliminate the buyer's underlying financial obligations or the risks associated with the property.
19:47In addition, they will face exit risk or we call it as disposal costs.
19:53Okay, so for example, if they change workplaces for better employment,
19:59then it could be challenging to sell the house or if they do not want to sell the house,
20:05then we come back to the index that we develop.
20:07We might see the transportation costs to increase.
20:12Yeah, so just now you mentioned about renting.
20:16Yeah, so in another study that I conducted with my students recently,
20:19in which we segregated the participants based on their preference to buy or to rent.
20:26We found that sense of belonging is the most important factor when considering renting,
20:33then only followed by the housing location and the rental costs.
20:37For those considering buying, surprisingly, we found that sense of belonging is still the most important factor,
20:45then followed by housing costs.
20:47So the participants in this study, they are young adults.
20:52And we observed that sense of belonging significantly affects how young adults nowadays value the stability of life,
21:03place, attachment, and the sense of emotional security that their residences bring to them.
21:10So these strong feelings of belonging mostly stem from the emotional connections with family,
21:17friends, communities, neighbours, and the living environment.
21:23So when people feel a strong sense of belonging in certain community and city,
21:28they will be more inclined to purchase or rent a house.
21:31So interestingly, now we found that sense of belonging play a role, whether it's buying or renting.
21:41That's definitely the generational shift at work here, which makes a little quite the perfect segue.
21:47And for Nas Han, your research, in fact, found that renter households accounted for 20-odd percent of Malaysian households.
21:55And that was back in 2022, rising to more than 35 percent odd in Pataling area,
22:01as well as about 34 percent in both Kuala Lumpur and Gombak.
22:05So now, if ownership remains beyond someone's sustainable means,
22:09what type of protections and institutional changes then become necessary to make renting
22:16also a secure, long-term housing option, rather than just allocating them as people who can temporarily only not buy?
22:29All right. So I really appreciate that our conversation today has reached to this point,
22:35which is a broader concern about housing policy and housing strategies,
22:40not just about, you know, get a loan and to own a house.
22:44It's broader than that.
22:46So, well, the data you mentioned just now really tells us that as we get more urbanized,
22:52we can anticipate that there are more people or households that are renters.
22:57So, at more granular level, I just want to add that, at more granular level,
23:03the premise is even more convincing.
23:06For example, the Lembah Pantai parliamentary seats have a population that are renting at 42.1 percent.
23:14So, the Padang Kota estate assembly seat has 58.7 percent.
23:21It's more than half, actually.
23:23So, these are areas that are urbanized.
23:26So, regardless of whether it's a choice or a preference or sense of belonging,
23:34you know, people choose to rent because it is expensive to own a house,
23:41the fact is clear that renting activities become something that are uncommon,
23:46especially in urban areas.
23:49So, on the other side, we are also facing the concentration of work in urban area,
23:55be it the opportunity and the talents pooling themselves.
24:00It is more likely that the gig economy, the informal economy,
24:05share the same trend.
24:07According to DOZEN, the Department of Statistics Malaysia,
24:10two in three self-employed workers are based in urban areas.
24:15Simply because we get more people in urban areas,
24:18there is more food to deliver,
24:20more items to ship,
24:22more tasks to handle,
24:23and the proximity matters, actually,
24:25even if it does not often require to be in the office.
24:29So, looking at these two trends, right,
24:31So, we might not only have a new way of financing,
24:33but also new way of housing.
24:37To strengthen the rental market as a housing tenure strategy,
24:42we need to make sure that rental market is a fully functioning one.
24:50So, for example,
24:51the government will be introducing the Residential Tenancy Act.
24:56So, what we should expect from this Residential Tenancy Act,
25:00it must address,
25:02it has to be uplifting the humanizing housing agenda.
25:07So, we must make sure that there is no racial discrimination
25:12exists in the, or allowed in the market.
25:15We must make sure that,
25:17second, we must make sure that the habitability
25:20or the quality of housing,
25:23housing, including in rental sector,
25:26is at a certain standard.
25:30We cannot just let the coffin-sized rental activities exist.
25:35We must address that.
25:37So, the third one is to make sure that residential rental market
25:41can be a reference for the government
25:44to come up with a housing,
25:49sorry, the assistance strategies.
25:51Look at last time,
25:53the COVID-19 pandemic.
25:56Moratorium were given to homeowners.
25:59But what about those who are in rental sector?
26:02They have to depend on,
26:03they have to depend on their landlords.
26:06If their landlords give them some moratorium,
26:09they can have financial relief.
26:12Absolutely.
26:13Thanks very much for focusing on that as well, Nazan.
26:15The fact that we do sometimes have unexpected circumstances
26:19and learning from that,
26:20particularly for what is increasingly more of a preferential renter's market
26:25for our urban infrastructure.
26:27In conclusion, perhaps, Dr. Concils,
26:30could you quickly share some thoughts
26:31about how we could be testing in the near future
26:35to see whether SJKP is widening sustainable ownership
26:39and also supporting existing prices
26:42or just helping to clear stock of housing
26:46that still does not really match what households may need,
26:49particularly the households that come from those who are in gig work
26:53and also informal employment?
26:57Yeah, thanks.
26:59So this is a very challenging task to conduct a test,
27:02to be honest,
27:03and it couldn't be measured at one point in time
27:06or by a single agency.
27:08What the government can do, of course,
27:11is continue this effort to increase sustainable home ownership
27:15amongst their income and expenses through SJKP.
27:21In the meantime, we are back to Economics 101.
27:25We need to settle on market clearing pricing
27:29which balance demand and supply
27:31without distortion from government intervention, of course.
27:35And, of course, on another note,
27:36we are unable to clear all housing stock
27:39because of housing preferences,
27:42location, and attributes of the houses,
27:45for example, the size of the house,
27:48the amenities, facilities, so on and so forth.
27:52We also need to consider
27:54the SJKP supported demand
27:57is flowing into which segments of the housing?
28:03Is it newly completed units,
28:06sub-sealed properties,
28:08affordable price segments,
28:10long-standing unsold units,
28:11or properties in locations
28:14with genuine household income?
28:16So, we need all those data later on.
28:19So, perhaps, this is opening up
28:21an area for future research and investigation,
28:25especially for researchers like me.
28:28Thanks very much for the deep insights,
28:30both Dr. Consales as well as Nazan of KRI.
28:33That's all we have time for today.
28:35Do join us again for next week
28:37for more economic analysis and insights.
28:39I'm Tamina Kausji, signing off for now.
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