Can The Madani Housing Reforms Really Transform Malaysia’s Property Sector …

The Ministry of Housing and Local Government (KPKT) recently introduced several new laws and reforms aimed at modernising the property market, protecting homebuyers and improving urban living conditions.

In 2026, five Madani Housing Reforms will be implemented to build an accountable and high-integrity housing ecosystem without neglecting homebuyers’ welfare. A transparent, modern and data-driven management aimed to strengthen buyer protection, enhance housing system efficiency, close regulatory gaps and push the country towards a world-class digital housing ecosystem. 

It comprises legislative enhancement including the introduction of a new law — the Property Development Act; an electronic Sales and Purchase Agreement (eSPA); the Housing Integrated Management System (HIMS); Transforming and Empowering Data Usage in Housing (Teduh); and audits of the Housing Development Account (HDA).

Separately, there are the Urban Renewal Bill (URA), Property and Building Management Act (Proposed), and Solid Waste and Public Cleansing Management (Amendment) Bill 2025.

It is about time and I do hope that it will really achieve its main aims on transparency, accountability, high-integrity and without neglecting homebuyers’ welfare.

Take the example of the URA. Even government backbenchers have deep concerns and UMNO even held a convention to address the many gaps that would leave homeowners without comprehensive protection. Also, there is an inconsistency – URA applies a consent threshold of 80% but if the strata owners themselves initiate a redevelopment; the threshold remains at 100%!  

I welcome the recent news said that KPKT will allocate RM60 million in 2026 to repair and construct homes for low-income households. The budget should be increased to do more repairs and do away with the URA.

An example, for Chinese New Villages, KPKT’s New Chinese Village Division administers upgrades via low-interest loans for land lease renewals, micro-businesses, rehabilitate dilapidated houses and build new homes. In 2025, RM100 million (RM209 million for 2023 and 2024) was allocated for Chinese New Villages with facilities like roads and community centers. 

The URA hold out Singapore as an example but it is significantly and structurally different. Fact is, the comprehensive and people-centred planning approach inspired Johor to collaborate with Singapore URA for sustainable urban planning. 

In the 13^th Malaysia Plan, the government announced that the build-then-sell (BTS) model would be mandatory but in a twist, KPKT confirmed that both the BTS and sell-then-build (STB) models would be maintained, signifying the government’s willingness and readiness to focus on the rakyat’s needs and to take all industry stakeholders’ opinions into consideration. Based on the National Housing Department’s assessment, the industry chain is not yet fully ready, while mandatory implementation could favour large corporations at the expense of SMEs.

The BTS scheme was outlined in the Housing Development (Control and Licensing) Act 1966, or Act 118. After about six decades, KPKT still cannot ensure the industry chain is ready? And is the twist really a willingness to focus on the rakyat’s needs and opinions into consideration or is it favouring developers’ interest? Incidentally, why were the needs and opinions of the rakyat on the URA through 128 stakeholder’s engagements not taken into consideration? If the SMEs are not efficient and leads to abandoned projects, why protect them? 

Malaysia has very poor track record in protecting minority interests and wrongdoers seldom get prosecuted even when the transgression is clear.

Act 118 needs stricter rules and enforcements. Blacklisting and penalties will not do. Were there any developer that went to jail since 1966 though there is a provision for imprisonment. If the ministry can take firm action, including terminating the services of solid waste management concessionaires, why can’t developer licences be terminated and this should also extend to parent developer companies too. Meantime, the ministry plans incentives for developers completing stalled projects.

Developers complain that the main concern is the financial ability to sustain projects that takes up to four years to complete and it will negatively impact the provision of affordable housing.

Meantime, what has KPKT done to ensure industry players speed up the process by adopting international best practices, improving coordination, using technology (like IBS and BIM), streamlining approvals and focusing on efficient project management to reduce costs and improve efficiency? Developers should start considering sectional handover or stage-by-stage handover of the development. 

There are also concerns on various compliance and ‘other costs’ prior to construction. 

There were corruption allegations in project approvals and implementations. Local authorities responsible for plan approvals faced probes into systemic bribe-taking to bypass standard procedures or prioritising approval plans that may not have met full regulatory standards. The MyKiosk initiative drew scrutiny but MACC concluded no criminal elements were present, closing the case without charges.

In 2023, MACC detained three individuals for allegedly receiving RM110 million in bribes to secure approvals and contracts for a major housing project spanning multiple phases contributing to cost overruns. In 2022, MACC exposed contractor cartels bribing state and local officials for housing project endorsements in exchange for favourable zoning and permit decisions. Did anyone go to jail?

On inefficiencies, the Agong himself had to highlight the issue of clogged drains and garbage accumulation. Poor tax assessment and collection practices strain budgets, bureaucratic red tape slowed complaint resolutions and human resource shortcomings compound these issues. 

Further, the Dasar Perumahan Negara (DRN) 2018-2025 hasn’t fully met its objectives such as rising house prices, a mismatch in supply/demand and affordability issues despite the promise to review it based on the Madani framework in early 2023.

The National Physical Planning Policy, which drives implementation of inter- and intra-regional balance are still facing challenges like rapid urban growth, data gaps and coordination issues.

The Department of Town and Country Planning (PLANMalaysia), a statutory body under the ministry was busy preparing and pushing the URA but how is the delivery of its main functions?

Transparency is sorely needed. We need useful data to avoid a mismatch of property supply and demand. Moving up the value chain is not the priority if the rakyat can’t afford it.  

On the other hand, banks must play its part in commissioning independent studies to assess a development’s viability since we also have persistent affordability gaps.

We must establish a “national affordable housing trust” to build affordable houses at suitable locations instead of spending more than RM17 billion for an LRT line in Penang.

We can keep on enacting new laws but reviewing and fulfilling current ones and enforcing governance standards must take precedence. 

To maintain the integrity of the housing sector, KPKT has to revisit issues on urban well-being, affordable housing, effective local governance and most of all, protecting homebuyers’ interests. 

Let’s talk about the elephant in the room.

What say you…

 

Saleh Mohammed