PETALING JAYA: Government intervention is critical to control the rising cost of renting properties and stabilise the market, so policies should encompass rent control, affordable housing development subsidies or tax incentives for landlords who offer fair rent, said Universiti Teknologi Malaysia property economics and finance Assoc Prof Dr Muhammad Najib Razali.
He was commenting on property rental prices, which have risen on average by 3.9% in the second quarter of 2024, according to an IQI Malaysia Home Rental Index report.
“However, rent control policies could have unintended consequences, such as reducing incentives for landlords to maintain properties and discouraging new property investments.
“A balanced approach that combines regulation with efforts to increase the overall housing supply would likely be more effective.”
He said rising rental prices are being driven by demand for rental properties, which is prompted by affordability issues in the home-buying market.
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He also said many potential homebuyers are delaying purchases due to higher interest rates and economic uncertainty, leading to competition for rented properties.
“Inflationary pressures, rising maintenance and construction costs have forced landlords to adjust rental rates upwards. The influx of foreign workers has also increased demand in major urban centres.”
He said the Klang Valley, Penang and Johor Bahru are experiencing the highest rental price growth as they are key economic hubs with more job opportunities, education centres and better infrastructure.
“The growing popularity of short-term rentals on platforms such as Airbnb in these areas has further driven up long-term rental rates.”
Muhammad Najib said in the short to medium term, rental prices are likely to continue rising, especially in high-demand urban areas, with the upward trend supported by increasing urbanisation, supply constraints and the rising cost of living.
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“It could stabilise if more supply enters the market, such as new rental units or affordable housing developments. Economic recovery and government policies aimed at cooling the property market may also provide some relief.
“In Malaysia, any increase in house price and rental would have a significant impact on the lower-income group.”
English literature teacher Alya Nadirah Mohd Hamdan, 34, expressed concern over rising rental costs, which have made it harder for many to find affordable housing.
“The rent keeps going up but government salaries do not keep pace with rental rates. My three colleagues and I have been sharing a four-bedroom house in Bandar Seri Sendayan, Negeri Sembilan for about a year. We split the RM1,600 monthly rent among us but there are also utility bills to consider.”
She said the increase in rental costs has tightened their budgets, leading them to reduce spending on other activities.
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She also said the main challenge in finding affordable housing in her area is the lack of options as everything that is nice seems to be out of reach or has numerous restrictions attached while cheaper ones are too far or in poor condition.
“The current rental prices are unjustified considering the value you get in return. It is not like we are in a high-class area or getting loads of perks with our rental.
“Only three bedrooms can be accessed because the master bedroom is locked, denying us use of the whole house. Yet, we still need to pay the full rent.”
She said there should be regulations to control rental prices in high-demand areas and address discriminatory practices that limit housing options based on race.
“I think we cannot apply the same rental rules to everyone since property owners invest differently in their homes, such as renovations and maintenance. Still, the government needs to do something.”
Muhammad Najib said a balanced approach of regulation and increasing the housing supply would work. – Amirul Syafiq/THESUN
