Why micro housing may not be a good idea in Malaysia

Liveability and saleability of tiny homes in question

Old apartments in a zone near Pudu City in Kuala Lumpur. icosha/Shutterstock

The Malaysian government’s plan of building downsized homes for single, low-income earners has sparked some apprehension among analysts, reported The Malaysian Reserve.

Residential units smaller than 200 square feet are not suitable living quarters for any individual, according to Sarkunan Subramaniam, managing director for Knight Frank Malaysia. “Even in Hong Kong, which is known for its unaffordable property prices, several developments featuring shoebox flats had failed to achieve favourable sales results.”

More research is needed into the market for micro housing developments, he added. “Furthermore, these types of housing are at risk of becoming ghettos and drug dens.”

Sarkunan’s statements come on the heels of a proposal by the Kuala Lumpur City Hall to rent out small capsules at just MYR100 (USD25) a month to unmarried people under B40, the lowest income group in Malaysia.

Sarkunan, however, gave praise to existing tax measures designed to quell speculation in affordable residential units.

“As far as speculation is concern, taxation mechanisms such as real property gains tax and stamp duty are good enough to prevent the situation,” he said, while advising against the government “directly intervening.”

The government’s initiative to acquire rent-to-own (RTO) homes under the second National Housing Policy (NHP 2.0) will help promote home ownership among low-income earners by way of their credit scores, according to the consultancy.