Property development, capital growth, and housing affordability in Malaysia

Abstract

Many governments and state agencies in the global South have shifted towards the operation of 'property states' (Haila 2015), 'cities for profits' (Shatkin 2017), or 'neoliberal policies' (Chen and Shin 2019). In Malaysia, retirement and second-home properties have been promoted by the government to lure foreigners to buy relatively cheap freehold properties in cities such as Kuala Lumpur, Penang, Melaka, and Johor Bahru. This development tendency, however, has added pressure to the provision of affordable housing because developers have been more keen to develop international property projects than less profitable products of local housing.From 18 March 2020, Malaysia imposed a series of entry and movement restrictions in response to the COVID-19 pandemic. These restrictions brought uncertainty and new challenges to the (future) operation of international property market. Adopting an urban political economy perspective, this chapter discusses the property-related policy responses taken by Malaysian governments while reflecting on prevailing concerns over housing affordability. Though long-standing impacts on the landscape of housing in Malaysia are hard to predict, the COVID-19 crisis revealed the inevitable risks of fuelling capital growth through the proliferation of speculative, high-priced international real estate projects with little relevance to society.Constitutionally, housing development in Malaysia is governed by a series of legal Acts and policies authorised by the Ministry of Housing and Local Government. The federal government's role in housing planning and supply, however, is complemented by the various responsibilities that rest upon state governments and local authorities. While housing is a matter governed by both federal and state governments, How to cite this book chapter:

Urban speculation for survival: Adaptations and negotiations in Forest City, Malaysia

“…Second, the emergence of the COVID-19 pandemic in early 2020 exacerbated Forest City’s already precarious finances as a project reliant on real estate sales. As Malaysia closed its borders in early 2020 and implemented travel restrictions, foreign investor tourists could no longer visit Forest City, while the government suspended new applications to the Malaysia My Second Home program, with no indication of when the program would resume (Ng, 2020). During this same time period, other multi-billion-dollar Chinese-financed and constructed megaprojects in Malaysia have collapsed due to financial troubles, most notably the Melaka Gateway and Bandar Malaysia projects (Kumar, 2020a; Yatim, 2021).…”