Page 407 - Special Topic Session (STS) - Volume 2

STS508 Suraya Ismail

The need for granular data in evidence-based
policies: The case of housing affordability in
Malaysia
Suraya Ismail
Khazanah Research Institute. Kuala Lumpur, Malaysia

Abstract
This paper highlights the need to have more data collected at the right spatial
scale to provide evidence-based policies for managing the raising
unaffordability of the housing market. The importance of aggregation is not
to be underestimated but the need to have more granular data is equally
important. This is because cities demonstrate different trends of affordability
due to the inherent structural differences of the housing markets and yet data
is aggregated at the state level. Examples are given where data is available
only at state and federal level for ownership rates and the calculation of
affordability. Whilst this is useful, it is still not accurate.

Keywords
homeownership rate, household incomes, house prices, affordability ratio,
evidence-based policies

1. Homeownership and informality in Malaysia
According to the latest available official figures in 2010, Malaysia has a home
ownership rate of 72.5%. This is a relatively high number considering that home
ownership rates in developed countries – apart from Singapore – were below
70% in the same year (UK-67.4 % and US 66.5 %). However, Malaysia’s home
ownership rates, which are published by the Malaysian Department of Statistics
(DoS), also include ownership of informal houses. For instance, houses built by
families at buffer zones of rivers are illegal but are still considered as owned
homes in the Population and Housing Census. Formal housing stock is defined
as housing which has been built with development orders from local authorities
being issued. Conversely, informal housing stock are houses built without
development orders and/or houses built by the community and may include
‘kampung’ houses.
There is a significant amount of housing stock that falls within the housing
unit count in the 2010 Population and Housing Census that is not included in
the estimates for housing stock published by the National Property and
Information Centre (NAPIC), which only takes into account formal housing. In
2010, the former exceeded the latter by 2.9 million. This means there are
effectively near 3.0 million informal housing and this might well be the reason
why ownership rates are higher in rural areas. Informality in this case has

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