Housing Industry In Malaysia Construction Essay

House is a basic demand for human. This demand must be carry throughing in order to do an single live in good wellness and safety. Therefore, one of the societal aims in state development is to supply lodging installations to people non merely to carry through their basic demand but besides for economic growing of the state.

To run into the increasing lodging demand, ministry of lodging and local authorities ever do a reappraisal of lodging policy to outline more compressive national lodging policy. The affairs that authorities take into consideration in order to set about the lodging undertaking is as follows:

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Need, demand and supply

Land for lodging


Human resources

Technology, design of stuffs, criterions


Infrastructure, public-service corporations and societal services

Socio-culture, socio-politic and socio-economic

Research and development

Care of development and substructure

Data centres and information of lodging

These policies implemented based on the Eighth Malaysia Plan ( 2001-2005 ) and continued during the Ninth Malaysia Plan ( 2006-2010 ) . In the Ninth Malaysia Plan, the development of lodging sectors continues to be focused in order to supply equal house to people.

Population growing quickly particularly in urban countries due to demographic factors, celerity of industry sector, addition of investing, fiscal system and engineering encourage lodging policy to be continued in Ninth Malaysia Plan. By 2020, the population of Malaysia is expected to increase to 32 million people or 65 % of the occupant in urban countries. Due to population growing, the demand and demand for house is besides expected to increase. Housing is the of import strategic sector in economic, so is expected the lodging investing will be concentrated in urban countries. In 1994, lodging industry produces 7.3 billion end products and contributes 12 % to national income ( Ali Azhar, 2000 ) .


In supplying lodging, authorities and the private sector has an of import societal duty. This duty includes the proviso of societal substructure and a healthy environment for occupants. This duty is of import in order to get the better of the jobs such as poorness and solidarity among the people. Housing industry in Malaysia involve public ( Government ) and private sector and besides joint venture between the two sectors to run into the demand of all community in Malaysia. Therefore, lodging development in Malaysia is implemented by the public and private sector ( National Housing Department ) .

Housing proviso for all community in Malaysia is carried out by public and private sector as follows:

2.2.1 Public Sector ( Government sector )

Integrated public lodging plan

Undertaking Perumahan Rakyat Bersepadu ( PPR )

Housing Loan Scheme

Skim Pinjaman Perumahan ( SPP )

Housing under the Land and Regional Development Agencies.

Perumahan Di Bawah Pembangunan Tanah dan Wilayah

Housing ‘s Economic Development Agency

Perumahan Kemajuan Ekonomi

Government Living quarterss

Perumahan Kakitangan Kerajaan

PPR and SPP plan in public sector is provide particularly for lower income group to accomplish the authorities purposes which is to better the quality of life and battle the poorness job. This plan was undertaken by the Ministry of Housing and Local Government.

For the Housing under the land and regional development bureau such as FELDA, FELCRA, KEJORA, KETENGAH and so on is set up for the intent to supply a place or house for people involved in land and regional planning and besides include the local occupant who moved due to the gap of new agricultural countries, while province economic development cooperation ( PKEN ) and urban development cooperation ( UDA ) are involved in the development of commercial, industrial and building. For the authorities quarters, the purpose is to supply the lodging installations to the authorities employees particularly for low-income employees.

2.2.2 Private Sector

Licensed Private Housing Developers

Perumahan Pemaju Swasta Berlesen

Concerted Housing

Perumahan Koperasi

Particular Low Cost Housing

Perumahan Khas Perumahan Kos Rendah ( PKPKR )

Individual and Group Housing

Perumahan Individu dan Kumpulan

The lodging that develops by private sector is like detached house, patio, level, flats, stores and town house that consist of low, modest and high cost.

Particular low cost lodging is a particular plan implemented during the period 1986 to 1989. This plan is a partnership between public and private sector. Federal authorities and province authorities plays a function in supplying inducements every bit good as the facilitator for the developer who participate in the plan, while the private sector involved in building activities.

Individual and group lodging include both formal and informal lodging. Formal lodging is lodging that less than 4 units, and was develop with blessing from local governments, while non formal lodging include the building of residential houses without obtaining blessing from relevant governments such as traditional house, small town house, homesteaders, labour cantonments and drifting house ( Elinawati, 2003 ) .


Presently there are about 700 federal Acts of the Apostless in force in many Fieldss and certain status. In Housing Development ( Control and Licensing ) Act 1996 is the key in commanding the activities of developers in order to protect the involvement of place purchasers. But there are other statute laws that play an of import function either straight or indirectly in the activities of lodging industry. Therefore, all the failing and imperfectnesss of such Torahs will impact the lodging industry. The followers is a list of statute law that plays a function in the lodging industry:

Housing Development ( Control and Licensing ) Act 1996 ( move 118 )

Town and Country Planning Act 1976 ( move 172 )

Roadss, drains and edifice Act 1974 ( move 133 )

Town Planning Act 1995 ( move 538 )

Fire Service Act 1988 ( move 341 )

Bank and Financial Institutions Act 1989 ( move 372 )

Contract Act 1950 ( move 136 ) & A ; Government Contract Act 1949 ( move 120 )

Environmental Quality Act 1974 ( move 127 ) & A ; Regulations and Orders

Land Acquisition Act 1960 ( move 486 ) and the Rules & A ; Ordinances Acquisition of Land ( compensation ) ( particular proviso ) 1948 [ P.T.M.Ord.21/1948 )

Strata Titles Act 1948 ( move 318 )

Licensed Land Surveyor Act 1958 ( move 458 )

Quantity Surveyor Act 1967 ( move 487 )

National Land Code 1965 ( move 56/1965 )

Additionally, by-law enacted harmonizing to Road, drains and edifice act is as follows:

Uniform Building By Law 1984

Earthworks By Law 1985

While the by-law under the Housing Development ( Control and Licensing ) 1966 are:

Housing Development ( Control and Licensing ) Regulations 1989

Housing Developers ( Housing Development Account ) Regulations 1991


In the lodging industry, there are several organisations that play an of import function as the Ministry of Housing and Local Government ( KPKT ) or local governments, developers, contractors, professionals and place purchaser ( Leong Seng, 2001 )

2.4.1 Ministry of Housing and Local Government

Ministry of Housing and Local Government was set uping on May 24, 1964 under the name of the Local Government and Housing. On July 18, 1978 the ministry has changed the organisations and reorganise under the name of Ministry of Housing and Local authorities. This constitution is the consequence of a combination of the ministry of lodging and rural development with the local authorities which antecedently located under the Ministry of Local Government and Federal Territories ( www.kpkt.gov.my ) .

Ministry of Housing and Local Government has a figure of divisions and section that are closely related to the lodging industry as below:

National Landscape Department

Solid Waste Management Corporation and Public Cleansing

Town and Country Department

Fire and Rescue Department

Local Government

National Housing Department

Solid Waste Management Department

Training Institute of the Ministry of Housing and Local Government.

The chief function of KPKT is to guarantee the development of lodging industry is in clean and maintained to guarantee the involvement of house purchasers. The licensing and consultative services in KPKT are entrusted to pull off issue of licences, publicizing licenses and gross revenues to developers. Developer who built a house more than 4 units to sell is required to obtain licences, publicizing licenses and gross revenues from KPKT. Merely private developers are required to obtain the licences, publicizing licenses and gross revenues, concerted and province cooperation are exempted from the licences, publicizing licenses and gross revenues. However, private developer besides can be freedom from the licences, publicizing licenses and gross revenues, but in certain status that was stated below:

Build less than 4 unit house.

Concept more than 4 unit house, but non doing any gross revenues.

Construct the houses but sold after a certification of fittingness ( CFO ) is full.

To guarantee the guaranteed of purchasers involvement, all lodging developer is mandatory to open an history in bank or fiscal establishment specifically for each lodging undertaking. The history is to guarantee that the lodging developers use the lodging purchaser ‘s money in appropriate mode. Under the Housing Developers ( Housing Development Account ) Regulations 1991 all the money collected from buyers and all loan obtain by the developer from bank or fiscal establishment must be put into this history. All backdowns from this history must be comply with the aims set out in ordinance 7 in Housing Developer ( Housing Development Account ) Regulations 1991 and controlled by the bank or fiscal establishment and a certification from registered designer or applied scientist who is responsible for that lodging undertaking.

The monitoring and Enforcement section of KPKT will supervise the undertaking and implement the jurisprudence. Enforcement officer will see the building site to guarantee that the progressing of the undertaking follows the agenda. Because of excessively many lodging undertakings and the little figure of enforcement officer, surveillance is done at random and selectively.

2.4.2 National Housing Development ( JPN )

National lodging development besides plays a function in the lodging industry in develop a imperfect and integrated community. JPN has high committedness in helping the province authorities to supply the low-cost and comfy house through the planning, proviso, and execution of low-priced public lodging such as incorporate public lodging plan ( PPR ) . The maps of JPN are:

Supplying the footing of planning and policy related to the development of lodging building to assist KPKT outline the policy, schemes and lodging development programs for the state.

Carry out research on edifice engineering, building and design with local universities every bit good as set abouting socio-economic surveies and the effectivity of the lodging undertakings of public and private sectors.

Help authorities and private developer in planning and coordination of their lodging undertakings and the edifice.

Provide proficient consultancy service such as land surveying, architectural, civil and structural technology, mechanical technology, contract direction, direction in the public lodging undertaking.

Supplying loans to those who are non able to acquire loans to construct or purchase a house.

2.4.3 Housing Developer

Public developer is dwelling of authorities bureau or the corporations that control by the province or federal authorities. Their duty is to implement policies, guideline and national lodging policy to protect the public assistance of the hapless people. All of the activities that undertaken by the authorities bureau or corporations are non capable to the Housing Developer ( control and licensing ) Act 1996 and its ordinances as edge by their several authorities. To accomplish the national lodging policy, authorities has planned a figure of lodging plans like the following below in order to run into the demand of low-income group.

Integrated public lodging plan

Housing Lon Scheme

Housing under Land and Regional Development Agencies

Economic Housing Development Agency

Government Living quarterss

For private developers companies, if they want to develop a lodging undertaking they should acquire the “ lodging licences ” from KPKT as stated in subdivision 5 of the Housing Developers ( Control and Licensing ) act 1996. Private sector engagement is of import in order to accomplish the policy aim because without the private sector, authorities is non able to supply lodging to run into community demands. In the private sector, the plan implemented are diverse and in demand from clip to clip. The lodging development by private sector involved assorted classs and type of lodging particularly a medium and high monetary value. Housing plan can be categorized as follows:

Private Licensed Housing Developers

Particular Low cost Housing Program ( PKPKR )

Individual and Group Housing

2.4.4 The Contractor

In a lodging strategy, the contractor is the 2nd most of import after a lodging developer because they would affect themselves straight in the building procedure and execution of the undertaking. If contractor have job, so indirectly it besides bring the job to the developer and therefore impact the lodging industry. This is because the Housing Developers ( Control and Licensing ) act 1996 and ordinances stipulated that the licensed developer demand to finish the building undertaking within 2 old ages and if can non be completed, developer must use to widen the period of the development by giving the specific grounds.

When developers get an blessing for be aftering permission, they will name certain contractors to get down work on building site. Normally the developer will name a chief contractor who has a good record and demonstrated their ability to implement the undertaking. After that, the chief contractor will name contractors to transport out minor plants in conformity with their several countries of expertness. For the certain large developer company they non necessitate to name a contractor to execute the building work because they have their ain contractors and adept squad.

The contractors involved in the building industry demand to acquire a licence from the Construction Industry Development Board Malaysia or CIBD harmonizing to certain processs. They will be given specific developing in their several field so that the quality of the building industry can be enhanced from clip to clip. Contractors who wish to get down operations need to be registered in the Construction Service Centre ( PKK ) , harmonizing to the ability of the Ministry of Entrepreneur Development and their several categories.

2.4.5 Professionals

In lodging strategy, developers is the first 1 who program and place the location that lodging undertaking want to be carried out. From the beginning of the execution procedure until complete, developer need a expertness from assorted of field such as Real Estate Valuer, Architect, Engineers, Quantity Surveyors, Land Surveyor, fiscal establishment and attorney to supply all the conditions required by the authorities section.

Developer needs the Property Valuers expertness to guarantee that the proposed site is suited to be developed. The valuers will analyze factors such as the value of environing existent estate market about, the distance from the metropolis centre to the site, the installations in the surrounding, the ability and gustatory sensation the local population, the types and the monetary values of house that suited to develop in that site, so study can be prepared to the developer. If the Feasibility survey study show that the site is potentially to be developed, the developer will acquire the site either by the manner of buying the land or through Land Acquisition Act 1960 ( Act 486 ) .

When the developer gets the land, he will name adviser to set about the undertaking. For a big development company, they normally have their ain adviser and set it up as subordinate. At this phase, adviser should fix a site program, layout program, and drainage to the local authorization for blessing.

If the land is developed to be bound by any status or limitation of involvement and demand to use for subdivision, divider, or merger so the land surveyor will play a function in these procedure until the blessing from the State Authority ( PBN ) .

Architect and Engineers play a function in supplying design programs and edifice involved in the undertaking execution phase. Architect need to plan the type of lodging that will be developed based on the gustatory sensation of purchasers and conformity with current developments. Harmonizing to Razali Agus, planing a house is of import factor to pull house buyers.

Before the building procedure begins, applied scientists need to necessitate the measure surveyor to place the stuffs needed and the cost required in supplying these stuffs. Engineer is responsible to guaranting that all building work is follows the Building program prepared by the designer and follow the development agenda.

While for the attorney, they involved in Sale and Purchase Agreement ( SPA ) of the Housing Developers ( Control and Licensing ) Act 1966 requires the lawyer to supply the missive of the understanding. He attorney besides responsible for guaranting that all content is understood by the purchaser before subscribing the SPA.

The function of fiscal establishments is financing the activities of lodging development. The developer must obtain loan from fiscal establishments to finance the cost of lodging undertaking undertaken. Money that borrowed from fiscal establishments to the developer and the money paid by the buyer should be put in lodging development history and controlled by the establishment.

2.4.6 House Purchaser

House buyer is the most of import group in lodging industry because the success of failure the industry will find by them, whether in term of fiscal capableness, gustatory sensation, and desire to have a house. The chief factor act uponing the determination of the house purchasers is the ability to purchase a house.


2.5.1 Basic Condition for Government Housing Loan

The basic status for authorities lodging loan is:

Government employees with fixed place


Application signifier submitted 6 month before retirement or expiration of service

Have served at least 1 twelvemonth

The place have been confirm

Not a belly-up individual or a debitor individual or non capable or being disciplinary action

2.5.2 Qualification Rate of Housing Loan

Qualification rate of the loan is applied for the Judgess, the civil officer and members of general forces in Malaysia. The eligible sum of loan is as follow table 2.1:


Monthly Wage



RM 3500 and above

RM 300,000


RM 3000 to RM 3499

RM 250,000


RM 2500 to RM 2999

RM 220,000


RM 2000 to RM 2499

RM 200,000


RM 1500 to RM 1999

RM 160,000


RM 1200 to RM 1499

RM 130,000


RM 1000 to RM 1199

RM 100,000


RM 800 to RM 999

RM 80,000


RM 600 to RM 799

RM 60,000


RM 599 and below

RM 40,000

Table 2.1: Wagess and Eligibility Amount of Loan

( Beginnings: hypertext transfer protocol: //www.treasury.gov.my )


The factors that affect glut of lodging is:

2.6.1 The Weak of Purchasers ‘ Income Growth

Harmonizing to the Malaysia Sixth and Eighth Plan, the weak of the purchaser income growing is the major factor lead to flood in lodging sector.

2.6.2 Trouble in Geting a Loan

Malaysia 6th Plan besides stated that trouble in acquiring the authorities loan is besides the factor of lodging glut. The particular loan strategy that introduced by Bank Negara Malaysia in 1982 and new status imposed by the lodging loan strategy reduced the demand for house.

2.6.3 Higher Interest Rate

Higher involvement rate is besides a factor why the excess in lodging supplies.

2.6.4 Higher House Price

Higher house monetary values are besides among one of the factors that cause glut. Housing monetary values offered by the developer has reduced the high demand for lodging units since most of them are non able to purchase the house.

2.6.5 Location

Location is besides a factor in the glut of lodging. If a house is locate far from the metropolis centre, from work topographic point and from the populace installations is the factor why the buyer non interested in that house.

2.6.6 Design

Normally the design of the house that offers by the developer is simple and the infinites are limited.

2.7 Decision

From the treatment of chapter 2, we can understand in general about the lodging industry in Malaysia. In Malaysia, lodging industry non merely merely run by the authorities but, besides run by private parties. The authorities is besides responsible to sketching and reexamining lodging policies for the preparation of more comprehensive national lodging policy. This policy is necessary to run into a proposed undertaking to be implemented in the Malaysia Eighth Plan.

Many people are involved in order to stabilise the lodging industry in Malaysia. They play a critical function in assisting the authorities to increase the lodging industry. With the cooperation of all sectors or parties, the Malaysia lodging industry sectors is expected to be more advanced and competitory in supplying lodging to run into demand of the authorities and people, particularly in Kelantan.


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