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th15 NAPREC CONFERENCE

4 SEPTEMBER 2019INSPEN

th

2019NAPREC

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Main Committee of 15th NAPREC Conference

Director of INSPEN Sr Haji Mohd Nazri Bin Ahmad Zahari Registered Valuer

Deputy Director (KPPK) Sr Yusneta Bin Idon Registered Valuer

Head of Research and Inovation Sr Dr Rohana Binti Abdul Rahman Registered Valuer

Head Of NAPREC Sr Siti Rosemawar Binti Mohd Sahi Registered Property Manager

Secretariat Nazatul Najahah Binti Mohd Sharif Umi Rodhiah Binti Kamarudin

Editor Sr Siti Rosemawar Binti Mohd Sahi

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15TH NAPREC CONFERENCE PROGRAMME 4th September 2019 (Wednesday)

Dewan Jubli, INSPEN

8.30 – 9.00 am Registration and Breakfast Main Hall (Dewan Jubli)

Session 1

9.00 -9.45 am

Paper 1: Affordability of Potential First Time Home Buyer in Urban Areas, Malaysia Presenter: Dr. Sr Ainoriza Mohd Aini, UM

9.45 -10.30 am

Paper 2: Integrating a Sharia Compliant Property Management Framework for Waqf Properties Presenter: Assoc. Prof. Dr. Ibrahim Sipan, UTM

10.30 – 11.00 am

Opening and Welcoming Note: Director General Valuation and Property Services Department Ministry of Finance

Certificate Presentation & Photo Session

1100 – 1130 am Tea Break

Session 2

1130 – 1215 pm

Paper 3: A Conceptual Framework Eco-Based Residential Development in Malaysia Presenter: Dr. Hj Abdul Shukor Bin Shamsudin, UUM

12.15 – 1.00 pm

Paper 4: The Effectiveness of Maintenance Management Through Implementation of Building Maintenance Policy in Commercial High-Rise Building. Presenter: Prof. Dato’ Sri Ar. Dr Asiah Abdul Rahim, UIAM

1.00 – 2.30 pm Lunch & Book Exhibition

Session 3

2.30 – 3.15 pm

Paper 5: Index for Leveraging Growth Strategies and Corporate Governance Fit for a Superior Financial Performance in the Malaysia Real Estate Industry Presenter: Assoc. Prof. Dr Kartinah Binti Ayupp, UNIMAS

3.15 – 4.00 pm

Paper 6: Ageing In Place Overview For The Elderly In Malaysia - Home For Generation X and Baby Boomers. Presenter: Sr Dr Siti Uzairiah Binti Mohd Tobi, UTM

4.00 – 4.45 pm

Paper 7: Strategi Pengurusan Penjualan Program Perumahan Rakyat (PPR) Dan Perumahan Awam (PA) Presenter: Assoc. Prof. TPR Dr Dani Bin Salleh, UUM

1645 – 1700

Question And Answer End of Sessions

iii

MEMBERS OF NAPREC PANEL OF EXPERTS

ADVISOR

YBrs. Sr Haji Ahmad Zailan Bin Azizudin

Director General of Valuation And Property Services

Valuation And Property Services Department

Ministry of Finance Malaysia (MOF)

REAL ESTATE MANAGEMENT AND SERVICES (REMS)

Sr A’zmi Bin Abdul Latif – Chairman Profesor Emiretus Dr Noor Sharipah Sutan Sidi

Dato’ Sr Hj Rosli Bin Yahya Profesor Sr Dr Mastura Binti Jaafar

Profesor Madya Sr Dr Noor Rosly Hanif Dr Muhammad Najib Bin Mohamed Razali

Sr Dr Mona Binti Isa Sr Ishak Bin Ismail

Sr Adzman Shah Mohd Ariffin Sr Zaharin Ahmad Zamani

Sr Idris Abdullah Sr Hj Salleh Bin Ali

Sr Rosliza Binti Ramli Sr Kartini Binti Nordin

Sr Ari Bin Adam

REAL ESTATE LAWS AND POLICIES (RELP)

Sr Abdul Razak Yusak- Chairman Profesor Datuk Dr Nik Mohd. Zain Hj. Nik Yusof

Profesor Dr Megat Mohd Ghazali Megat Abdul Rahman Profesor Madya Dr Pakhriazad Hassan Zaki

Profesor Madya Dr Sharifah Zubaidah Syed Abdul Kader Datin Saleha Yusoff

Sr Sulieman Hj. Ahmad Sr Mohd Zam Mustaman Sr Hj Nordin Bin Daharom Sr Hj Hamidon Bin Haron

Sr Norhayati Awang Sr Rahmat Kasim Sr Maznah Ngah

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REAL ESTATE DEVELOPMENT AND FINANCE (REDF)

Sr Mohd Nazri Bin Ahmad Zahari - Chairman Profesor Dato’ Sri Ar. Dr Asiah Abdul Rahim

Dato’ Dr Rahah Binti Ismail Profesor Sr Dr Abdul Rashid Abdul Aziz

Profesor Dr Zainal Mat Sa’at Profesor Madya Dr. Rubi Ahmad

Profesor Madya Zainal Abidin Hashim Profesor Madya Dr Ibrahim Sipan

Sr Dr Fauziah Raji Sr Khaidzir Abdul Rasip

Sr Gs Md Badrul Hisham Awang Sr Aina Edayu Ahmad

Sr Azman Mab@Adnan Sr Sarmila Husain

REAL ESTATE VALUATION (REV) Sr Rashib Nang-Chairman (until March 2019)

Profesor Dr Hishamuddin Mohd Ali Profesor Dr Nor’Aini Yusof

Profesor Madya Dr Sr Wan Nor Azriyati Wan Abd. Aziz Sr Dr Mohd Hasrol Haffiz Bin Aliasak

Sr Prem Kumar A/L Subramaniam Sr Kamaruzaman Jamil Sr Aziah Mohd Yusoff

Sr Lee Tong Bian Sr Sawiyah @ Sawiah Abdullah

Sr Khalid Bin Abdul Mutalib Sr Mohamad @ Masri Jainaen

Sr Mohd Rizal Bin Mawi Puan Norlinda Daim

REAL ESTATE INDUSTRY AND ANALYSIS STUDIES (REIAS)

Sr Rosni Nawati Ngah - Chairman Profesor Sr Ts Dr Ting Kien Hwa

Profesor Sr Ts Dr Abdul Hadi Nawawi Profesor Dr. Abdul Hamid Mar Iman Profesor Madya Sr Dr Anuar Alias

Profesor Madya Adi Irfan Bin Che Ani Sr Dr. Yasmin Mohd Adnan

Sr Sulaiman Akhmady Mohd. Saheh Sr Basarudin Mohd Basir

Sr Arba’yah Ahmad Sr Faziah Abd Rasid

Dr Rohana Abdul Rahman

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Preface Dear Participants, The National Institute of Valuation (INSPEN) has been the coordinator of National Real Estate Research or better known as NAPREC for 15 years now. In this capacity, INSPEN, the training, education and research arm of the Valuation And Property Services Department (JPPH), Ministry of Finance Malaysia (MOF) has been charged with the responsibility to coordinate the disbursement of research grants under The National Development Plan. 15th NAPREC Conference provide a platform mainly for recipients of the grant to present their research findings to the stakeholders and the key players of the real estate industry. The total completed NAPREC research from 8th Malaysia Plan to 11th Malaysia Plan was 118 projects. NAPREC would like to thanks: -

• The Paper Presenters; • Ministry of Finance Malaysia (MOF); • Economic Planning Unit, Prime Ministers Department (EPU); • Members of NAPREC Panel of Experts; • Members of NAPREC Steering Committee; • Research Management Centre and Innovation University (RMIC); and

All organisation, agencies and individuals for their tireless efforts and contribution, in one way or another in the management and disbursement of the grant and to the success of this conference. Secretariat 15th NAPREC Conference

EXECUTIVE SUMMARY: PAPER 1

PRESENTER: DR. SR AINORIZA MOHD AINI, UM

AFFORDABILITY OF POTENTIAL FIRST TIME HOME BUYERS IN URBAN AREAS, MALAYSIA

1

AFFORDABILITY OF POTENTIAL FIRST TIME HOME BUYERS IN URBAN AREAS, MALAYSIA

Dr. Ainoriza Mohd Aini, Assoc. Prof. Dr. Wan Nor Azriyati Wan Abd Aziz, Assoc. Dr. Noor Rosly Hanif* and Dr. Zairul Nisham Musa

Built Environment, University of Malaya Kuala Lumpur e-mail: ainoriza@um.edu.my

ABSTRACT

The concern of housing affordability in urban areas gained substantial momentum in Malaysia

as middle income (M40) households began experiencing difficulty in accessing home

ownership with special attention to the internal determinants including socio-demographic and

buyer’s financing capacity. Semi-structured surveys was conducted on non-home-owners in

three cities; Kuala Lumpur, Petaling Jaya and Shah Alam. Focusing on the middle income

(M40) household category, the study delves into their financial position and housing

aspirations. Using their actual incomes and expenses, the Housing Income Index for the first

time home buyers was constructed to gauge the affordable house price and mortgage-to-

income ratio. The findings demonstrated that the inability to access home ownership is mainly

explained by inadequate income, high non-property monthly expenses aggravated by the

rapid rising house price. Empirically, the study found that down payment constraint is another

major impediment to home access among these urbanites. The study concludes by

considering some potential implications to policy makers, affordable housing provider and

financial institutions.

Keywords: Housing, affordability, middle income, home ownership, mortgage-to-income ratio

2

1. INTRODUCTION

Several emerging economies including Malaysia share an important common goal to promote

home ownership as a mean to drive urban development and urban growth (Chen & Yang

2017). There are substantial evidences that home ownership has created many individual

and social benefits. However, the concern of housing affordability in urban areas gained

substantial momentum in Malaysia as middle income (M40) households began experiencing

difficulty in accessing home ownership. The high house prices in urban areas in Malaysia

have made it difficult for potential first-time home buyers to purchase a house. During 2012

until 2014, the growth in median house prices has outpaced the growth median household

income in Malaysia as shown in Figure 1 (Bank Negara Malaysia, 2017). This is more so in

urban areas of Kuala Lumpur, Selangor, Penang and Johor. New launches have been

increasingly skewed towards the higher end property segments, recording only 18.5% of new

housing launches in Malaysia were priced below RM250,000 (Bank Negara Malaysia, 2017).

Figure 1 Median House Price and Median Household Income

(Source: Bank Negara Malaysia, 2017)

For many urbanites, living in the city means shorter commutes to workplace, better amenities

and various choices of entertainment. With the high cost of living in the urban areas,

overcrowding and the challenges of an always-on world, it may seem surprising that more and

more people are opting to live in the cities. The middle 40 percent of the nation household

income group is extremely important to the nation’s well-being. The M40 is central to the

nation consumption spending and private investments. A country can only reach progressive

growth, economically and socially with the full participation of the middle class. As such, the

5.1

17.6

5.5

12.4

0

5

10

15

20

2007-2009 2012-2014

CA

GR

*(%

)

*Note: CAGR referes to Compound Annual Growth Rate

median house price Median household income

3

Malaysian government has been emphasizing home ownership for all Malaysian particularly

the B40 and M40 groups.

This study aims to examine the profile of the potential first-time home buyer in Malaysian urban

areas. Furthermore, housing-income index using primary data from the proposed empirical

work will be constructed to measure the housing well-being of potential first-time buyers in the

selected areas of Greater Klang Valley.

2. RESEARCH BACKGROUND

Home ownership has always been perceived as a good investment and financial benefit.

Home equity, the value of a home less the amount owed on the mortgage, typically constitutes

a family’s greatest financial asset and share of net worth and is fundamental to building wealth

(Riley & Quercia, 2011). Frequently cited reasons of home ownership include social

considerations such as providing a good place to raise children, a safe place, and having

control over living space (Drew and Herbert, 2012). To many individuals, home ownership

has many benefits including better mental and physical health (Rohe & Lindblad, 2013). Home

ownership also have positive impact on children cognitive and behavioural outcomes

(Aaronson, 2000). Previous literatures have identified the external benefit of home ownership

including better maintenance and appearance of the house and neighbourhood (Coulson &

Li, 2013).

Home ownership is influenced by the levels and distributions of home prices, household

incomes and structure of financing cost. Affordability factors play an important role in

determining access to adequate homes. Affordability can be defined as the challenge each

household faces in balancing the cost of its actual or potential housing, on the one hand, and

its non-housing expenditures, within the constraints of its income. Housing is the single largest

expenditure item in the budgets of most families and individuals. The average household

devotes roughly one quarter of income to housing expenditures, while poor and near-poor

households commonly devote half of their incomes to housing. As such, these high proportions

suggest that small percentage changes in housing prices and rents will have large impacts on

non-housing consumption and household well-being (Quigley & Raphael, 2004).

UN-HABITAT (2011) divided housing affordability into four basic components; (i) Cost to

Purchase the house, (ii) ability to finance the purchase, (iii) House Occupation Cost and (iv)

ability to financially service loans (Figure 2).

4

First-time home buyers, like all home buyers, are subject to various credit constraints when

trying to buy a house. Since first-time buyers are typically young and have relatively low

income and savings, these constraints are likely to bind more often than for older, repeat

buyers (Fischer & Gervais, 2007).

In the recent years, issue pertaining to housing affordability has been the major concerns to

household especially those living in urban areas in Malaysia. The recent report by Khazanah

Research Institute (KRI) (2015) revealed that Malaysia has a seriously unaffordable housing

market. Numerous efforts have been conducted by both the public and private sectors to

address the housing affordability issues. New housing schemes which are, My First Home

Scheme (MFHS) and 1Malaysia People’s Housing Scheme (PR1MA) were recently

introduced by the government. It shows that the state recognised the problem and is taking

steps to address the home ownership issues. Some developers have also actively building

affordable homes as part of their corporate social responsibility efforts.

However, housing is still inaccessible and the condition is especially difficult for the first time

home buyer especially the younger Generation Y or the younger working adults, whose wage

increases have in no way kept pace with house-price inflation over the past decades (Tan,

2012).

•Interest rates and loan period, income and non-housing expenditure

•Down payment requirement, available savingsand other assests and existing debts

•Land lease, service costs, building maintenance, assessment, quit rent, insurance and maintenance fee

•House Price determined by cost of land, infractructure, building materials, albour and profit House

purchase cost

Occupation Cost

Ability to financially service

Ability to finance purchase

Source: Adapted from UN-HABITAT (2011)

CAPITAL VARIABLES

(BEFORE PURCHASE)

OCCUPATIONAL VARIABLES

(AFTER PURCHASE)

Figure 2 Basic Components of Housing Financial Affordability

5

The problem of declining housing affordability has been widely discussed in the media,

conferences and even social media. Based on the previous study by Wan Abd Aziz, et al.

(2009) housing affordability problems for middle-income households in Malaysia is not a new

issue. The problem has widespread in most major cities and towns in Malaysia where many

of them find it difficult to purchase a home as argued by Wan Abd Aziz, et al. (2009). The

escalating housing price in urban area is the main reason why the home ownership is difficult

especially among the younger working household (See for example Al Sadat, et al. 2014).

Furthermore, in the recent study by Baqutaya, et al. (2016), respondents brought up about the

less house choice available for the middle-income group in the area they like and that the

housing loan are getting stricter. This may be the case as the Bank Negara has imposed

stricter lending rules at the end of 2014. This has resulted in year 2015, when the affordable

housing loan application rejection was above 50%.

Affordability is not an issue of direct relevance to home owner occupiers who have already

purchase a home. Affordability must be viewed from the point of view of the potential first time

home buyers. A specific index is needed to measure the percentage of households that can

afford to purchase an entry-level home especially in the most urbanized areas in the Greater

Klang Valley. An index is the fundamental to measure the housing well-being for first-time

buyers in Malaysia especially those in the urban areas. As such, this proposed study aims to

address this by constructing index that takes into account actual income and expenditure of

potential first time home buyer rather than just median income and house price.

Limited research has looked into the profile of the first time home buyers. There is little

evidence with regards to the economic and socio characteristics of this group in the Malaysian

context. Therefore, it is imperative to explore the profile of the potential first-time home

buyers, their income and expenditure patterns. This study also aims to construct first-time

buyer housing-income indexes using primary data from the proposed empirical work to

measure housing well-being for first-time buyers in the most urbanised area in Malaysia.

This study was proposed based on the previous research conducted in collaboration with the

Sime Darby Property in establishing the Housing-Income Index 2013 and 2014. The finding

was endorsed by the Minister of Urban Well-being, Housing and Local Governments. This

index was constructed with homeowners as the main focus. To extend the research further,

this proposed study aims to look at potential first time home buyers.

6

3. RESEARCH QUESTIONS AND OBJECTIVES

This research aims to examine the key problems related to issues and challenges in providing

accessing home for the potential first time home buyers in selected urban areas in Klang

Valley. Three key research questions to be addressed are:

1. What are the current income and expenses of first time home buyers in Klang Valley?

2. What is their current housing accessibility level?

3. What are the issues and problems faced by them in entering home ownership?

The research objectives are as follows:

1. To provide an indicative report on the financial position of potential first time home

buyers (FTHB) in selected urban areas in Malaysia

2. To measure whether the average family living within the urban areas who are non-

homeowner qualifies for a mortgage loan on a typical house based on the Housing-

Income Index.

3. To provide better understanding on potential first time home buyers’ (FTHB) profile,

financial position and spending patterns within the selected areas in urban areas.

4. RESEARCH METHODOLOGY

Semi-structured face-to-face survey were conducted on non home-owners in three selected

areas (Figure 3). The empirical work involved 1160 respondents in total, which comprised of

different backgrounds including age group, ethnicity, income distribution, employment and

much more. Face-to-face survey sessions took place mostly at the commercial areas, transit

stations (eg: KL Sentral, KLCC), mosque/surau and their workplaces. Upon receiving

permission, the survey was carried out. On average the survey took approximately 30 minutes

to be completed. The criteria or eligible respondents were those who do not own a house and

those with household income between RM3,800 and RM8,300 (Middle 40% income bracket).

Following Reed and Mills (2007), preliminary questions, such as “Have you owned a house

before?” were asked to determine eligible respondents.

Reflecting the research questions, a questionnaire was developed, structured as follows: (i)

socio-demographic profile; (ii) Household income (iii) Detailed housing (rental) and non-

housing expenditures (iv) housing aspirations (v) barriers to home ownership. Survey findings

7

were analysed using SPSS and qualitative content were analysed manually, with a focus on

identifying key barriers. Using their actual incomes and expenses, the Housing Income Index

for the first time home buyers was constructed to gauge the affordable house price and

mortgage-to-income ratio.

Figure 3: Study area

5. STUDY HIGHLIGHTS

Research Question 1: What are the current income and expenses of first time

homebuyers in Klang Valley?

While there have been several studies focused on income and expenditure patterns of

Malaysian, this study attempted to provide a better and current expenditure patterns of those

who are non-home owners by location. The following diagrams illustrated the financial position

of potential first time home buyers (FTHB) in three urban areas including Kuala Lumpur (KL),

Petaling Jaya (PJ) and Shah Alam. Total median income of KL and PJ each stood at RM5,000

whilst Shah Alam has a slightly higher median income of RM5,500. The study found that there

are variations in the spending patterns among the respondents. Total median expenses are

higher in KL as compared to PJ and Shah Alam. However, the similarity found in all three

8

areas studied is that these non-homeowners allocated a bigger proportion of their total

spending on vehicle loan. KL respondents spent the most on house rental compared to Shah

Alam and PJ. This is expected since rental average in Kuala Lumpur is higher and choices

are limited. Furthermore, Shah Alam respondents spent the least on dining out and groceries

compared to KL and PJ. Perhaps, this could be because food is easily available and more

affordable at most places in Shah Alam.

Figure 4 Summary of Income & Expenses (KL)

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Figure 5 Summary of Income & Expenses (PJ)

Figure 6 Summary of Income & Expenses (Shah Alam)

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Research Question 2: What is their current housing accessibility level?

The study has measured the average household living within the urban areas who are non-

homeowners eligibility for a mortgage loan. The following summarises the Mortgage-Income-

Ratio (MIR), Price-Income-Ratio (PIR) and Affordable House Price for Kuala Lumpur, Petaling

Jaya and Shah Alam.

Based on the above findings, with higher MIR and PIR, non-homeowners in Shah Alam are

highly likely to enter into home ownership as compared to those in KL and PJ. This suggests

that any future policies, strategies to assist non-homeowners in Malaysia should consider the

location. In another word, no one policy should fit all areas.

Research Question 3: What are the issues and problems faced by them in entering

home ownership?

The research illustrated the similar perception with regards to issues of home ownership in all

three study areas. In all three areas of this study, the respondents strongly perceived that the

house price is too expensive that the respondent could never afford it. Prices of newly

launches of landed and high-rise properties are beyond reach of majority of people especially

the middle-income earners. Furthermore, unstable financial position causes them to defer

going into the home ownership process. Several of these respondents were not ready for a

huge debt commitment as they are still unsure about their work and income stability. This is

because some of the respondents are still under contract/ non-permanent staff or still under

11

probation. The one issue found in all three areas is the inability to prepare enough deposit

sum.

In sum, this study found that access to financing for the purchase of housing by middle income

households is very limited, particularly in Kuala Lumpur, where the affordable housing gap is

the greatest. If this middle income earners were to get credit at all, they would have to pay a

premium because of their risk profiles. The study found that many middle-income households

lack savings for substantial down payments, which means that they take out high loan-to-value

mortgages, which are riskier and require higher interest rates. Furthermore, these middle

income respondents are unbanked and lack standard records of income, savings and

payments that banks and financial providers can use to evaluate their credit-worthiness.

6. FINDING SUMMARY AND CONCLUSION

In most previous studies on housing affordability, general recommendations have been given

i.e. the government should continue to assist the middle incomers and for the developer to

build more affordable homes. The findings from this study have important implication in

developing three main recommendations as alternative to the current policies and programs

in improving the affordability of the potential first time home buyers in Malaysia. The

recommendations are to introduce (i) Mixed housing policy, (ii) Encourages more hybrid

approach of Rent-to-Own and (iii) Introducing shared ownership model.

i. Mixed Housing Policy: Housing Policies should be a combination of

ownership and rental.

Housing policies and programmes should be designed to cater the needs across income

segment and account for changes that will occur in the circumstances of residents and in the

economics and demographic of the city. Based on the findings of the affordable house price

of this research and comparing the average house prices, the study recommends the

following:

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Table 1 Type of Housing Policy Recommendation

Area Average House Price

(JPPH Q1, 2017)

Affordable House Price

from this study

House Price Gap

Type of policy recommendation

KL RM 760,369 RM239,195 Huge Gap Mixed Policy

PJ RM 653,9481 RM376,318 Huge Gap Mixed Policy

Shah Alam RM 653,9482 RM502,267 Medium Gap Homeownership

Most western European countries (i.e. Germany, Austria) have lower rates of home ownership,

in part due to strong social rental systems (Lea, 2010). This study recommends “Mixed Policy”

which is a combination of policy encouraging home ownership and rental system. Where the

affordability gap is huge, it only makes sense to not encourage or push home ownership policy

solely any further. The study thus recommends that for KL and PJ, Mixed Policy should be

introduced with higher rental proportion in KL than PJ. Further research is needed to

determine the mechanism and percentage.

ii. Encourages Rent-to-Own initiatives

The research found that the main issue of entering into home ownership is the difficulties to

prepare down payment to purchase a house. Quite a number of respondents are not qualified

for mortgages due to the nature of work e.g. contract staffs, under probation or under a

particular work categories i.e. Oil & Gas sector. It is recommended that the rental market be

improved by encouraging more rent-to-own initiatives particularly amongst the private

developers. The rent-to-own model is not a new model. Developed countries like the United

States of America, United Kingdom etc. have already adopted this model as an alternative

solution to the housing ownership problems. As such, this can be a good option for the non-

home owners in Malaysia to have more time to boost their credit and save up, and at the same

time getting a head start on building some equity. In other words, this allows tenants to build

equity without having to qualify for a mortgage. The rent-to-own option can attract potential

buyers by giving them a chance to slowly build credit and pay their down payments over time.

However, it is important to make sure the potential buyers can have high enough credit to

qualify for a loan when it is time to buy.

1 Using figure from Daerah Petaling* 2 Using figure from Daerah Petaling*

13

Rent-to-own agreement have many cited benefits including;

1. The seller or developer can lock in the future sale price of the house now, and not have

to worry about market fluctuations.

2. If the seller or developer renting to a tenant who eventually wants to own the house,

the quality of the tenant is likely to be much higher, and they will treat the house with

more respect.

3. The rent-to-own purchase model can be a good option for sellers or developers whose

houses have been on the market for some time and remained unsold for a variety of

reasons.

iii. Introducing Shared Ownership model

Shared Ownership is a hybrid model of ownership and has remained as an important

component of UK housing policy. It is a part-rent/part-buy hybrid tenure but is aligned with the

common expectations of home ownership (Wallace, 2012). The model has been adopted in

the UK, US and Australia which mainly aimed at first-time buyers particularly those who have

lower income and savings. The model brings many potential benefits including enhancing

housing choice, security of tenure for the owner/renter and sense of ownership (Wallace, 2012

and Wiesel et al, 2017). Buyer has the opportunity to purchase a share of the house (say

between 25-75% of the home value) and pay the rent on the remaining share. Buyer then will

have the option to purchase a bigger share when they can afford. In the UK, most of the

houses available for this scheme are newly built. The study therefore recommends this model

to be adopted in Malaysia as it has proven successful in other countries. However, further

study and detailing are required before it could be implemented.

7. STUDY LIMITATIONS & SUGGESTION FOR FURTHER WORKS

The findings of this study should be interpreted in the context of several limitations. First, the

samples were restricted to residents from the three urban areas which have different socio-

economic characteristics compared to other cities in Malaysia. As such, further research is

needed to explore the affordability of FTHB in other states or cities. Secondly, the study is

focusses affordability from the perspective of the potential FTHB only. In particular, the

recommendations laid out in the previous sub section only looked at the strategies to increase

access to financing and have not looked into housing delivery system, reducing development

costs or strategies to unlock land potential for residential development. Thirdly, the study has

not taken into account the potential influence of family background on the first time home

ownership.

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8. FINAL REMARKS

This paper summarised the findings for NAPREC funded research project on the issue of

affordability of potential first time home buyers in selected cities in urban concentrated area of

Malaysia. The study has looked into economic concerns and an understanding and

appreciation of non-economic factors (such as preferences and aspirations). In order to

develop policies and deliver affordable housing programs that meet the needs of the client

population particularly the M40 group (and avoid unintended consequences), a full

appreciation of the social, behavioural and attitudinal concerns of different groups is required.

While the knowledge of housing preferences of potential first time home buyers in Malaysia

from this study may not serve as the ultimate determinate in designing affordable housing

programs and finding sustainable long term solution, it can provide critical information in policy

development, such as in the specific location for assistance as well as the method of delivery.

REFERENCES

Aaronson, D. (2000). A note on the benefits of home ownership. Journal of Urban Economics, 47(3), 356-369.

Al Sadat Zyed, Z., Aziz, W. A., Azriyati, W. N., Hanif, N. R., & Tedong, P. A. (2014). Affordable housing schemes: overcoming home ownership problems. Open House International, 39(4).

Bank Negara Malaysia (2017) Bank Negara Annual Report 2016. Kuala Lumpur. Bank Negara Malaysia, March.

Baqutaya, S., Ariffin, A. S., & Raji, F. (2016). Affordable housing policy: issues and challenges among middle-income groups. International Journal of Social Science and Humanity, 6(6), 433.

Chen, J., & Yang, Z. (2017). What do young adults on the edges of home ownership look like in big cities in an emerging economy: Evidence from Shanghai. Urban Studies, 54(10), 2322-2341.

Coulson, N. E., & Li, H. (2013). Measuring the external benefits of home ownership. Journal of Urban Economics, 77, 57-67.

Drew, R. B. & Herbert, C. (2012). Post Recession Drivers of Preferences for Home ownership. WP 12-4, Cambridge MA: Joint Center for Housing Studies.

Fisher, J. D., & Gervais, M. (2007). First-time home buyers and residential investment volatility. Federal Reserve Bank of Chicago Working Paper WP2007-15.

Khazanah Research Institute (2015) Making Housing Affordable. Khazanah Research Institute, Kuala Lumpur.

Lea, M. (2010). International comparison of mortgage product offerings. Research Institute

for Housing America Research.

Quigley, J. M., & Raphael, S. (2004). Is housing unaffordable? Why isn't it more affordable?. The Journal of Economic Perspectives, 18(1), 191-214.

Reed, R., & Mills, A. (2007). Identifying the drivers behind housing preferences of first-time owners. Property Management, 25(3), 225-241.

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Riley, S. F., & Quercia, R. G. (2011). Navigating the housing downturn and financial crisis: Home appreciation and equity accumulation among community reinvestment homeowners (pp. 187-208). Philadelphia: University of Pennsylvania Press.

Rohe, W. M., & Lindblad, M. (2013). Re-examining the social benefits of home ownership after the housing crisis. Boston: Joint Center for Housing Studies of Harvard University.

Tan, T. H. (2012). Meeting first-time buyers’ housing needs and preferences in greater Kuala Lumpur. Cities, 29(6), 389-396.

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EXECUTIVE SUMMARY: PAPER 2

PRESENTER: ASSOC. PROF. DR. IBRAHIM SIPAN, UTM

SHARIA COMPLIANT TENANCY MANAGEMENT FRAMEWORK FOR WAQF

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SHARIA COMPLIANT TENANCY MANAGEMENT FRAMEWORK FOR WAQF PROPERTIES: TOWARDS SUSTAINABILITY OF INCOME

Leader Ibrahim Bin Sipan

Researchers

Ahmad Che Yaacob, Rohaya Abdul Jalil, Mustafa Omar, Fauziah Raji, Farah Nadia Abas, Noor Azimah Ghazali

Abstract It is still a loop in the management of waqf property; inefficiency in waqf management still exists in Malaysia. As a consequence, the income of waqf institutions in some states is relatively small as a result of large rental arrears. Thus, the vulnerability of income generated by the waqf properties should be addressed through sound principles of tenancy management (TM). This research seeks to propose a Integrating Sharia Compliant Tenancy Management framework for waqf properties as a means of increasing the waqf income which will ultimately strengthen the value and nature of waqf. This framework is based on best practice tenancy management (BPTM) while integrating sharia compliance with waqf needs and waqf philosophy. Data has been collected from document analysis, focus group discussion, in-depth interviews and in-situ observation. Semi-structured interviews were conducted with waqf property managers and tenants to investigate tenancy management attributes of waqf properties. The compliance of Sharia, adherence to waqf needs and the issues of tenancy management are investigated too. By considering the full spectrum of tenancy management, the attributes of tenancy management could be categorized as (i) tenant selection, (ii) tenancy businesses, (iii) rental determination, (iv) tenancy agreement, (v) enforcement and (vi) waqf property manager. The findings of this research revealed that waqf property manager were not adopting a full Sharia Compliant tenancy management and implementing different practices of tenancy management because they have their own waqf enactments, State Islamic Religious Council’s policies and standard operations procedure. The proposed framework would assist to improvise the waqf properties to be on par with the conventional building while Sharia principles are being fully observed in the full spectrum of waqf tenancy management. Keywords: Tenancy management; Waqf properties; Best practices; Sharia compliance; Waqf philosophy

Introduction 1.0.

Waqf real estate or property is seen as a catalyst for waqf philosophy fulfilment if it could be well managed and produce a good mainstream of income for various purposes. Al-Termidhi, Sunan al-Termadhi, al-Ahkam ‘An Rasul Allah fi al-Waqf, (Hadith No. 12960) support that real estate or property (e.g. land and building) is seen as an ideal asset for waqf (Mohammad and Mar-Iman, 2006). It embraces

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commercial, retail and residential use. In essence, the usage of private wealth of waqf for realizing waqf social objectives (Muhammad, 2016), must prioritised. Apart from that, Osman (2017) emphasized that waqf philosophy is not just fulfilling the objective and spirit of the waqf, but it is even more to ensure that objectives shall being accomplished. Of importance, the disbursement of benefit is regularly conveyed to the beneficiaries continuously as long as the waqf properties remain intact.

For the fulfilment of the waqf philosophy, the State Islamic Religious Council

(SIRC) has been entrusted and empowered by the Administration of the Religion of Islam Enactments to not only act as trustee but also to appoint any individual or organisation to act as its representative. As the sole trustee of waqf properties, SRICs have been cooperating with Department of Awqaf, Zakat and Hajj (JAWHAR) and Waqf Foundation of Malaysia (YWM) by embarking on numerous waqf-generated properties. Their duties are not limited to the development, administration and management of waqf properties, but also value maximization while generating sustainable income.

Even though the Federal Government has allocated about RM 256.4 million

through 9th Malaysian Plan (RMK-9) for waqf projects (Zakaria et al., 2014) and RM 1.9 billion in 10th Malaysian Plan (RMK-10) (Bernama, 2010), it was noted that these grants focused on waqf land development only. Certainly, the cost for further improvement of waqf properties from the government budget is always questionable and remain unclear since is not sufficient at all (Samsudin, 2017). In addition, most of the waqf projects funded by the government were not only for the social contribution, but also to financially sustain waqf properties as well (Noor, 2011).

As the rental accumulations of waqf property are still low of many waqf

institutions in several states (Mohsin and Mohammad, 2011; Majid and Said, 2014; Ali et al., 2016), thus, sound principles of tenancy management need to be practiced. Thus, this research aims was to address the revenue shortfalls generated by waqf property. This research proposed an adoption and adaptation of best practice tenancy management (BPTM) issued by the Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVAEP) without disregarding the waqf and Sharia compliant requirements. Effective and efficient management of waqf could provide greater return and potential for the waqf properties so as to maximize the social and religious benefits. 1.1 Problem Statement

In the context of Malaysia, it is still a loop in the management of waqf property; inefficiency in waqf management still exists. As a consequence, the income of waqf institutions in some states is relatively small as a result of large rental arrears (Mohsin and Mohammad, 2011; Majid and Said, 2014; Ali et al., 2016). The result, the only things can be covered are the expenses of waqf property such as building maintenance and building insurance (Yaacob and Nahar, 2017). Series 3 of the Auditor-General Report 2014 confirmed that some SIRC faced outstanding rental issues; Kedah Islamic Religious Council (MAIK) (RM1,050,000), Penang Islamic Religious Council (MAIPP) (RM4,560,000) and Melaka Islamic Religious Council

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(MAIM) (RM420,083). Thus, this waqf property can be said to be financially non-profitable. In relation, it can be perceived that growth of waqf property value is also stunted.

What makes the situation worse is the dependence of SIRC on the allocation

of the state government and the contributions of the public to continue operating. Based on the observation of this problem alone, it is possible to conclude that the management of waqf property in Malaysia is still in disarray. In response to this issue, activities to improve the generation of income through waqf property need to be geared up and intensified to achieve the purpose of waqf and ensure the success of the ummah in general. Karim (2007) through his writing noted that the potential of effective and efficient waqf management was in terms of return on social and religious benefits. To be more optimistic, it will pay back financially to the nation's economy (Noor et al., 2014), as the value of waqf is experiencing positive growth in the property market.

In order to ensure that waqf stays relevant, adequate funds are needed to

improve and maintain existing and future waqf management (Ismail and Arshad, 2009; Sanep and Muhamed, 2011). Speaking of funds, it is possible from the profit management of the waqf property itself in terms of rent collected from rental of premises. It is because, the premises can be rented but waqf property cannot be sold and used as collateral (Mohammad and Mar-Iman, 2006).

As stated earlier, management of waqf property should be based on sharia

In fact, there is still no sharia compliance standard for the management of

waqf tenancy in Malaysia. Waqf Land Management Manual (2006) was launched for the sake of standardization of waqf management procedures throughout the country. In this manual, there is a simple process and basic guidelines for use by SIRC. As this manual is not yet comprehensive, there is more improvement on sharia principles particularly. Furthermore, in the context of the provisions of the Special Rules or the State Waqf Enactment in five states namely Johor, Selangor, Negeri Sembilan, Melaka and Perak, there is no comprehensive regulation relating to the management of waqf property rental.

principles. Therefore, in order to adopt and adapt BPTM, it is necessary to follow sharia justification to rectify the management of waqf property. Most of the previous disciplines have given great attention to sharia waqf accounting, reporting and financing (Ismail et al., 2015). However, there is a lack of disciplinary studies that deal with the management of waqf property rentals. Othman (1982) and Rani and Aziz (2010) examined in depth the management of waqf properties based on the waqf requirements and the sharia laws embodied in them. They detailed and discussed lengthy that some of the sharia feature which included terms of waqf tenancy, duration, rental rate, income of waqf properties, tenancy agreement and mutawwali. However, it still showed the gaps when inadequately described the full spectrum of waqf tenancy management. There was also ambiguity on some attributes such as tenant selection, default rent and non-compliance penalties. In summary, identifying the tenancy management attributes based on waqf and Islamic law requirements are important and need to be examined so that the waqf system will become more compact.

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Therefore, it is appropriate to conduct this research as it will bridge this gap. This research focused on the ways to integrate the best practices, waqf requirements and sharia compliance in an effort to optimize waqf sustainable income generation that coincided with Islamic principles.

1.2 Research Objectives

The following objectives of the research are developed to fulfil the identified aim: i. To identify the characteristics of waqf properties. ii. To identify the attributes of waqf, sharia compliance and best practice in tenancy management. iii. To determine the issues in tenancy management of waqf properties. iv. To develop a sharia compliant tenancy management framework for waqf properties.

Literature Review: Tenancy Management Concept Based On Best 2.0.Practice, Waqf Needs and Sharia Perspectives

This section highlights the concept of tenancy management based on the best practice, waqf needs and sharia perspectives. The section begins with the definition of waqf and its philosophy that should be understood. Further, this section provides a more inclusive understanding of tenancy management's attributes including of tenant selection, tenancy businesses, rental determination, tenancy agreement, enforcement and property manager.

2.1 An Overview Of Waqf

Waqf (pl;awqaf) as referred to traditional Muslim philanthropy, is a form of

perpetual, continuous and sustainable charity (sadaqah jarriyya), pious action or endowment, and benevolence instruments (Raissouni, 2001; Sadeq, 2002; Kahf, 2003; Dahlia and Haslindar, 2013). Specifically to waqf, Muhammad (2016) claimed that waqf philosophy is the use of private wealth to realize social objectives. Most recently, Noor (2017) categorized waqf philosophy into five (5) characteristics of; (i) express one’s submission and piety to Allah SWT, (ii) get closer to Allah SWT, (iii) continuous charity in this and afterlife, (iv) sharing benefits with Muslim community like building mosques and schools and, (v) strengthen the unity of Ummah. All the characteristics listed here could be generalized as long as the objective of the waqf is fulfilled.

There are two forms of property that can be endowed; immovable such as

land and buildings and movables such as cash and shares. However, according to Al-Termidhi, Sunan al-Termadhi, al-Ahkam ‘An Rasul Allah fi al-Waqf, (Hadith No. 12960), property (e.g. land and building) is seen as an ideal asset for waqf (Mohammad and Mar-Iman, 2006). The income generated (rental or usufruct) from those assets could be the subject matter for continuity of rewards as long as the physical of waqf assets remain intact. Moreover, such assets to be endowed as waqf

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must be characterized as beneficial and has Islamic value (Omar et al., 2013).

2.2 Tenancy Management Concept

Tenancy management forms part of the types of services in a property management. Meanwhile, property management can be defined as the act of operating the property with aim of sustaining the capital value and income of the property in the line with the objective of the owner. Christudason (2004) claimed that it should be carried out to maintain the building and thereby prolong its lifespan. Three main objectives of property management outlined by Richard (1961) consists of (i) to optimize and maximize the property investment return and cost saving, (ii) to prolong and maintain the physical property and (iii) to increase capital value of the property in terms of investment. Additionally, Scarrett (1983) summarized that the function of property management is a mixture of the achievement of financial objectives and practical management as well which maintain investment and occupational value to achieve for short-term and long-term objectives.

In Malaysia, the Board of Valuers, Appraisers, Estate Agents and Property

Manager (BOVAEP) will now regulate property management services, previously known as the Board of Valuers, Appraisers, Estate Agents (BOVAEA). The establishment and operation of this Board shall be governed by the provision of Valuers, Appraisers, Estate Agents and Property Managers Act 1981. According to this act, property management is defined as “the management, maintenance and control of any land, building and any interest therein, excluding the management and maintenance of property-based business, on behalf of the owner for a fee..” In order to provide a high standard of service, a property manager shall adhere to the Malaysian Property Management Standards (MPMS) issued by the BOVAEP and strictly enforced since 1 Jun 2016. Overall, there are eleven (11) codes of practice standards of property management as depicted in Figure 1.

Figure 1: Malaysian Property Management Standards (MPMS) (2nd Edition

2016) As concerns tenancy management services in this research, the standards

1. Property Manager 2. Appointment of a Property

Manager 3. Handing Over/ Taking Over of

Property

4. Building Management 5. Maintenance Management 6. Financial Management 7. Administrative Management 8. Insurance Management 9. Health, Safety & Emergency

Management 10. Tenancy/Lease Management 11. Facilities Management

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referred to are of property managers (Standard 1), maintenance management (Standard 5), financial management (Standard 6) and tenancy management (Standard 10).

Tenancy management basically deals with tenant-landlord business affairs to

sustain the building, its system and business for a lasting period (Iman and Mohamad, 2014). The scope of tenancy management may involve tenant recruitment, tenancy agreement, rental determination, rent review, provision of services including maintenance services to tenants, bill collection, marketing, etc. The entire task should be carried out by the landlord itself or may appoint the property manager on behalf of the landlord. However, property managers are better versed in the legal rights of both the tenant and the owner.

Hence, by considering the full spectrum of tenancy management and also feedback from the focus group discussion (FGD) session, the attributes of tenancy management could be categorized as follows.

Table 1: List of tenancy management attributes

Attributes Sub-Attributes

A: Tenant Selection A1:Tenant Criteria

A2:Tenant Screening

B: Tenancy Businesses B1: Types of Businesses

B2: Business Condition

B3: Business Strategy

B4: Business Location, Facilities and Services

C: Rental Determination C1: Rental Charged

C2: Rental Collection

C3: Rental Increment

D: Tenancy Agreement D1: Duration

D2: Responsibility

D3: Security & Utility Deposit

D4: Sublet

D5: Early Termination

E: Enforcement E1: Rental Default

E2: Penalty

E3: Eviction

F: Property Manager F1: Qualification

F2: Property Inspection

F3: Governance

F4: Waqf Disbursement

The detailed discussions of TM attributes listed above according to the best

practices, waqf needs and sharia compliance were discussed in the next sub section.

2.2.1 Tenancy Management Attributes: Waqf, Sharia Compliance and Best Practice

With regards to MPMS (2016), the property manager’s role in tenancy or lease management will involve aspects of billings, collection and disbursement of

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rents, tenant’s liaisons, coordination between contractors, management of utilities and services, and monitoring reinstatement of premises upon termination or expiry of the tenancy or lease. Hence, the MPSM could be referred to as a basis for TM best practices as well as taking into account the prior literature review as discussed in the following subheadings.

In fact, there is no definition to describe what waqf needs really mean.

According to Abdul-Karim (2010) that waqf needs to have income to provide for its beneficiaries. Hence, due to the inflation and increasing needs of waqf, the income of property assets should be met as desired. As far as waqf can be created for the benefit of specifically designated individuals or for general charitable purposes, waqf needs to be designated to sharia-compliant deeds (Porter and Rubio-Vega, 2011). Adherence to sharia principles are necessitated for the accomplishment of waqf philosophy.

a) Tenant Selection Overall, Muslim and non-Muslim were acceptable to be qualified tenants

based on the best practices, waqf needs and sharia principles provided that the non-Muslim shall do halal activities and subjected to the Council's enactment. According to Paragraph (5/1/3) of SS9 stated that if the use to be made of usufructs of rented assets considered permissible, an Ijarah contract could be grant even with a non-Muslim (AAOIFI, 2015). However, if the landlord knows or has reason to assume in advance that the use of the asset to be rented is for an unacceptable purpose, and thus it will not be allowable. However, Muslims should be given the priority on the right to rent. On the contrary, waqf needs state that the right to rent must depend on SIRC’s policy. For best practices, the nature of the tenant business becomes the priority. However, waqf needs do not emphasize for asnaf category but it can be considered. Moreover, it is also being subjected to the waqif condition stipulated in waqf deeds.

Besides, the screening process for qualifying tenants is essential to ensure

that the tenant could sustain in paying the rent. The similarities that have been discovered among best practices, waqf needs and sharia principles that level of income and background of the tenant should be scrutinized during the screening process. Other than that, best practices have revealed that clients’ requirement and previous landlord testimony are important too. All this while, the market force was the determining factor. If the vacancy is high, the tenant’s profile will not be strictly inspected, as long as the tenant is good and able to pay the rental. Instead, in case of normal market condition and smaller space, the selection for tenants would be stricter.

b) Tenancy Business

Findings have revealed that the types of business permissible according to

waqf needs and sharia principles must abide Islamic law. Then, halal and cleanliness also should take into consideration for waqf needs fulfillment. Instead, high and best use was more emphasized from the best practices viewpoint. In terms of the conditions for operating a business, the business license is crucial and compulsory

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for operating the business in best practices. In fact, tenancy agreement also has cover that business operator must apply consent from relevant authorities. If the tenant got the summons, the landlord is not being responsible. While, the conditions based on waqf needs shall refer to the business proposal. Then, a sharia principle does follow the Standard Operation Procedure (SOP) for operating a business.

In term of the use of rental premises, the principles of Islam and best

practices agree that the premises shall not be used for any illegal or immoral activities. According BNM (2009) of (No 63), the permissibility to rent an asset is based on the permissibility of the tenant’s core activity, although it may involve certain activities that do not comply with sharia. In the same theme, waqf needs and sharia principles have the similarities that the business shall comply with sharia principles and there is no elements of syubahah such as selling or serving alcohol should be involved.

c) Rental Determination

Overall, the approach to determine the rental rate in the best practices, waqf

needs and sharia principles must be based on market rental. Majority of fuqaha have signified the rental of waqf tenancy should not be less than customary rent (ujra al-mithl). However, waqf needs facilitate that below market rental shall be applied to the asnaf category but it is subject to SIRC’s policy. The participant argued that if low rental was imposed to the tenants it will lead to depletion of commercial value. In fact, different rental rates could be imposed by the best practices according to the floor area and types of tenant. Also, it could be given to those who need to be assisted through waqf such as the asnaf, based on their income. However, the percentage of lower rental depends on SIRC policy. In line with this, sharia principles also mentioned that the special rate shall be prioritized to the low income group.

Besides, the rental could be paid in the various mechanisms as practiced by

professional property managers. These include payment by cheque, online transfer and websites are the alternatives done in best practices. Similar to ages ago, payment at counter is still being practiced in waqf management. All mentioned alternative methods are acceptable, as long as it is not jeopardizing. By the time of expiry of tenancy, option to renew tenancy permissible was automatically based on best practices and sharia principles. While, for waqf, it depends on maslahah and benefit for waqf. In the context of rental renewal, the best practices normally would review the rental in three years which was about five per cent increment. Whilst, rental review based on waqf needs was carried out in two years and normally Valuation and Property Services Department (JPPH) valuation took place during the rental review. If any renovation was done, no rental should be charged. However, sharia principles were based on the SOP.

d) Tenancy agreement

This attribute was further classified into duration of tenancy, security deposit,

responsibility, sublet, early termination and expiry of tenancy. Normally, tenancy period permitted for best practices is 3 years which is the tenant and landlord would feel more secured. There is also 3+2 (option to both parties), while rental will be increased in 3 years. For waqf, normally it depends on the WPM. If the tenant is a

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good tenant, then the duration should be longer according to Sharia viewpoint. While, sublet is not permissible according to the best practices except for

whole building and subject to landlord approval. This clause has been embedded in the tenancy agreement. To find tenants is crucial because it is due to the owner’s prospects. Somehow, the tenant brings their own sub lessee. If the owner agreed, it can proceed. In the case of tenant renting the whole building, then sublet to the other tenants, which is fine. In the case of waqf, sublet is not permitted but it is subjected to WPM’s arbitration. Sharia principles also do not allow the sublet. All this while, the tenant shall comply with the terms and conditions of use of the asset until the expiry of the tenancy or termination of the tenancy as agreed by both parties, whichever is earlier (No 64) of BNM (2009).

e) Enforcement

The discussion for this attributes focuses on the rental default, penalty and

eviction. In the case of rental default, the reminders served 2 times of notices and Letter of Demand (LOD) in the best practices. However, the waqf would serve notices, calls and court orders three or four times. In fact, two notices shall be given due to the sharia principles. Then, the deposit would be deducted accordingly.

Next, penalty for late payment imposed by the best practices were based on

the fix penalty and charged between eight (8) per cent to ten (10) per cent per annum. The late charges are imposed because late payment affects the landlord’s profit. For example, the tenant should gain RM10,000 for rental but if the tenant fail to pay they actually lost the opportunity to gain the profit if they invest in other investment the terms referred as opportunity lost cost. It based on the loss of the income. In contrast, the penalty of Shariah might be implemented through ta’widh (actual cost) and gharamah that will pay to charity or baitulmal. For example, one per cent from the rental (based on covenants and market rate). Then, the penalty for waqf needs was through letter, court order and sealed of premises.

Overall, eviction of tenants is permissible based on best practices, waqf

needs and sharia principles. In fact, it was difficult to be implemented for best practices since it does involve many procedures. However, the most reasonable causes are disrupting other tenants. The tenants shall not use the premises that cause nuisance, inconvenience to the landlord and its tenant. Lawyer will send the letter and mention that clause. In the sharia principles, the tenant will be alleged for eviction if they breach the contract. But it was subjected to the negotiation between landlord and tenant. While, based on waqf needs, tenant eviction permissible as the reason of habitual late payment of rent up to 3 month.

f) Property Manager

The person chosen to be property manager must be competent according to

best practices. Nevertheless, waqf needs have suggested that understanding of waqf and sharia Islamic expertise are essential. Then, professional and Islamic qualifications are indispensable under sharia principles. In the case whereby the property manager breaks the rules or violates ethics, it is subjected to the continuous performance by the property manager. The appointment agreement of property

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manager is made between the owner and property manager. As such, a two year contract will be signed between the owner and the manager, but if the property manager can renew the contract this means he is in that position. Based on waqf needs, it is subjected to the appointment of position also. However, if the property manager breaches the Islamic principal and normal practice, the property manager could be removed according to sharia principles.

Research Methodology 3.0.

This section discusses the way in which the research will be designed, strategized and conducted within a research philosophy framework. That is how the research questions will be answered throughout the research. Due to need a specialized niche area in discussing waqf concept from the beginning, thus, qualitative approach is adopted in this study.

3.1 Research Design

This research applies the qualitative study, involving two phases of data collection and analysis. In the first phase, FGD 1 & FGD 2 were conducted to discuss and verify all the attributes of TM based on waqf, sharia perspectives and best practices collected from the secondary data. These findings were used for constructing the two sets of interview questions for waqf property manager and the tenants in the selected case study. Next phase, semi-structured interview was conducted with WPM and the tenants in the case study. The purposes of interviewing WPM are to investigate whether tenancy management is complying with sharia compliance and adhere to the waqf needs or not. Then, the semi-structured interview was conducted with the tenants to identify their characteristics as a tenant, factors for default rental payment, the problems towards the waqf tenancy management and WPM, the satisfaction towards the TM and any recommendation for the TM improvement. Furthermore, the issues of tenancy management were investigated as well. These findings were used for the development of the framework.

3.2 Data Collection

A case study was adopted in this research to understand complex phenomena, within a real-life context. Four (4) case studies selected are of the commercial waqf properties namely State A, State B, State C and State D. The scope area covered the state of Johor, Selangor, WPKL and Penang. Overall, 7 premises were selected; two (2) premises in State A, State B and State C respectively and one (1) in State D. It were selected due to certain criteria such as diversity of commercial types, form of governance, strength and weaknesses of rental performance and tenancy management issues which could achieve the research objectives. It includes shop houses, shop office, waqf community bazaar, commercial complex and stratified commercial office.

Overall, 27 participants participated in the interview. The code names are as below;

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Table 2: List of Interviewee as coded No. Respondent Codes Sub-codes Total

1.

Waqf Property Manager

WM1 - 6

2. WM2 -

3. WM3 -

4. WM4 -

5. WM5 -

6. WM6 -

7.

Tenant

TA TA1 1

8. SL SL1-SL3 3

9. TB TB1-TB4 4

10. TC TC1 & TC2 2

11. TD TD1-TD4 4

12. TE TE1-TE6 6

13. TF TF1 1

Total Participants 27

These participants were divided into two groups; WPM and tenants. WPM was selected from various institutions include, State Islamic Religious Council, waqf subsidiary company and corporate body. It was coded as WM1, WM2, WM3, WM4, WM5 and WM6. Meanwhile, tenant coded as (TA, TB, TC, TD, TE and TF) representing six premises respectively and one (1) sublet premise coded as (SL).

Data Analysis and Findings 4.0.

This section discusses the key findings from the semi-structured interview and site observation. The case study analysis was then applied and initiated within-case and continued with cross-case analysis. This cross-case analysis is carried out to discuss the commonalities and differences or any conflicts raised in the TM attributes within the multiple case studies. This study employs Nvivo12 application software to do the cross-case analysis.

4.1 Waqf Tenancy Management Attributes

From these findings, it will be investigated whether waqf TM practices follow a sharia compliant and adheres to waqf needs or not. Furthermore, the issues of TM will be investigated as well from the WPM’s and tenant’s point of view. Then, the site observation is carried out with the tenant after the interview session with tenants is completed. Site observations were to clarify the questions answered by the WPM and tenants and to get a clear picture of the TM issues at the premises.

As referred to tenant selection attributes, the result of cross-case map shows

that five (5) nodes for tenant criteria’s have been coded by the 27 participants namely (i) Muslim, (ii) Muslim and non-Muslim, (iii) asnaf is not listed, (iv) have the ability to rent and (v) depends on SIRC’s policy as shown in Figure 2.

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Figure 2: Results of crose-case of tenants’ criteria

Overall, the Muslims nodes are most coded by the participants (n=25) which

reflected that the majority tenants who can rent out the waqf properties as shown in State A, B, C, and D. Besides, the non-Muslims are coded by the participants of WM2 and TC1 (n=2) representing State B. Indeed, FGD 1 was validated that the tenant can be Muslim and non-Muslim as long as sharia principle has complied. It does mean that the tenant selection for State B which permitted for non-Muslim to

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rent out instead of Muslim was underpinned by sharia law. To sum up, the analysis has revealed that all states conforming sharia principles in selecting their prospective tenants.

In terms of tenancy business attributes, the result of cross-case map shows

that five (5) nodes for business conditions that have been coded by participants in operating business in waqf premises as depicted in Figure 3. The business conditions coded namely (i) sharia-compliant goods and services (ii) not contradict to Islamic law, (iii) no “temple of worship” for non-Muslim (iv) immoral purposes disallowed, and (v) comply with the tenancy agreement.

Figure 3: Results of crose-case of business condition

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16%

84%

Rental Determination

Market rental

Below marketrental

All the waqf premises conducted in four states were adhered to the sharia principles though premise 4 of State B violated the rule in their tenancy. As mentioned earlier, the permissibility to rent an asset is based on the permissibility of the tenant’s core activity, although it may involve certain activities that do not comply with sharia (No 63) of BNM (2009). However, the tenant shall comply with the terms and conditions of use of the asset until the expiry of the tenancy or termination of the tenancy as agreed by both parties, whichever is earlier (No 64) of BNM (2009).

However, the rental determination attributes was differed from previous

attributes in terms of their compliance with the sharia rules. As illustrated in Figure 4, the WPM (WM1 and WM3) and most of the tenants claimed that the rental charged was below market rental which was imposed in the State A and C. Instead, State B and D charges were based on the market rental. The practice by State A and State C clearly contradicted with the opinion of majority of fuqaha whereby the rental rate of waqf tenancy should not less than customary rent (ujra al-mithl) (Othman, 1982; Mohamed, 2001; Rani et al., 2010). On the same theme, Ibn Nujaim al-Hanafi expounded that waqf rental must be at a standard price, or more. While, from the sharia principle, there is no conditions what the best rental should be charged. However, according to (Paragraph 76) of (BNM, 2009), the rental amount shall be determined upon establishment of tenancy contract. Once the tenancy contract comes into effect, the amount of rental specified and mutually agreed for the tenancy period shall not vary during the period (Paragraph 77).

Figure 4: Results for rent payable Moreover, most WPMs in four states acknowledged that they implementing a

sharia-compliant tenancy agreement. In fact there is no clearly guidance provided by previous jurist on how the tenancy contract shall be documented. However, through the document analysis of tenancy agreement and interview among the participants, all the terms and conditions embedded are deemed as valid conditions listed by Johansen (2016). Besides, once tenancy period and rental has been determined during the execution of contract, it can be deemed as valid (Usmani, 2000).

As shown in Table 3, the enforcement implemented by State B with regard to

the penalty similar to the conventional financial system whereby the default tenants were charged by interests. Since the imposition of interests or riba is prohibited by sharia, the delay in payment by the tenant will create harm to the SIRC as the

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trustee which suffer actual loss in terms of incurring additional expenditure, such as cost for issuing notices and letters, legal fees and other related costs. These issues should be avoided in order to ensure that business transactions are conducted according to the principle of market efficiency.

Table 3: Penalty imposed

Focused coding (%) n=27

1 CTOS-HQ. Currently plan to reveal the name of tenants who are

unable to pay their rent at the mosque.

WM3

2 (4% p.a./ 365 days) x (total days in rental arrears) WM2

3 No penalty The rest

Further, for waqf property manager attributes, all the WPM conducted a periodical inspection for safety or maintenance of premises at all reasonable times as tabulated in Table 4. As such, WM3 would give written notice to the tenants for any repairment of the defects required as aligned with tenants’ obligation. If no action is taken by the tenant within 10 days from the notice given, WM3 may enter and proceed for repairment and all cost shall be claimed to the tenants. Also, it strongly recommended being undertaken to check that no illegal and non-Sharia activity is taking place on the premises.

Table 4: Periodical inspection

Focused coding (%) n=27

1 Inspection will be handled periodically by another department to

have more effective management

WM1

2 Periodically inspection will be done at the premises with the

Department of Engineering for five times per year to check any

problem including damages and cleanliness etc.

WM2

3 It was not frequently since there were many premises to be

managed

WM3

4 Once the report sent to us, then we proceed for site inspection WM4

5 Inspection done by WPM only if any complaint was reported. All the

tenants

6 Yes, but sometimes. TE4

In a nutshell, the findings of this research revealed that waqf property

manager were not adopting a full Sharia Compliant tenancy management and implementing different practices of tenancy management because they have their own waqf enactments, State Islamic Religious Council’s policies and standard operations procedure. The identified tenancy management issues were shown in the following Table 5.

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Table 5: WPM and tenant’s perspectives on tenancy management issues

Tenancy Management Attributes

WPM’s Perspectives Tenant’s Perspectives

Tenant Selection A1:Tenant Criteria Easy to deal with non-Muslim previously rather than Muslim (C)

Tenancy Businesses

B2:Business Condition The tenant does not display their business license issued by CCM at the premises (A)

B3: Business Strategy The sale of business is seasonal especially during Friday prayer and festival of Hari Raya (B)

B3: Business Strategy The sale of business is seasonal especially during the school holiday, and festival (Hari Raya) (C)

B4: Businesses Location, Facilities and services (Location) A premise is not strategically located (A)

B4: Parking No available parking causes the difficulties of customers to come (C)

B4: Building Services Passengers waiting time for lift services is too long (D)

B5: Marketing No signboard provided before reaching the premises (B)

B5: Marketing Many obstacles from local authority as such cannot put the signboard in front of the premises (C)

Rental Determination

C2: Rental Collection The tenant paid the rental through the system but as there is a problem with the system, no payment is recorded. Hence, it had been recorded as rent arrears (C)

C3: Rental Increment/ renew Dissatisfaction towards the rental increment (A) & (B)

Tenancy Agreement D2: Responsibility Cleaning & Maintenance (correction of faults by tenant) Premises are not being managed by the tenant and are in bad condition (A)

D2: Responsibility (Repair and maintenance by

D2: Responsibility (Repair and maintenance by

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The table above demonstrates that tenancy businesses are the most

important determinants of tenants and WPM satisfaction followed by tenancy agreement, rental determination and enforcement. While, tenant selection and waqf property manager attributes are less important. The solving of TM issues will be discussed in the next section.

4.2 Proposed Framework of Integrating Sharia Compliant Tenancy Management for Waqf Properties This section has presented a sharia-compliant tenancy management

framework for waqf properties. The development of framework has been done through several steps which were the integration of best practice with waqf needs and sharia compliance and validation by the experts through FGD 3.

The researchers propose that the first step to select the tenants is by giving the explanation about the nature of waqf philosophy in an understandable way. For tenant selection’s attributes, the WPM shall provide clear information about the tenant’s criteria and tenant screening needs to be done so that they know whether they are qualified or otherwise. Hence, the market tenants are recommended for the tenant’s criteria as the rental income must be sufficient to be distributed to beneficiaries as well as to maintain and manage waqf properties (A1). Non-Muslims are also qualified to rent out since it is permitted by Islamic law. However, priority is given to Muslim tenants.

WPM) Leaking water pipes due to high usage (D)

WPM) The tenant carried out the repair either minor or major by themselves (C)

D2: Responsibility (response by WPM) The tenant delivers their complaint through email. However, it was a late response from WM (C)

D4: Sublet The premises has been sublet without permission(C)

Enforcement E1: Rental Default The tenants will only take an action by approaching the 3rd notice given (notice of termination). However, the payment is not a lump sum basis. But the tenant will pay gradually (B)

E1: Rental Default Monthly rental is not paid on time/ consistently (A) & (B)

Waqf Property Manager

F1: Qualification No experts in regards to development (A)

F4: Waqf Disbursement The manfaah from the rental collection are not fairly distributed (A)

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Also, this proposed framework will allocate the waqf properties for special tenants who cannot afford to pay rent according to the market rental value including of asnaf category to give them an opportunity to penetrate the market and compete with other tenants. In this case, the zakat will give an incentive to the special tenants by supporting them a portion of the rental payment. The tenant’s segregation proposed to be 70% of Muslims and 30% of non-Muslims. Then, the tenant of Muslim breaks further into 60% of the market tenant and 40% of the special tenant. The non-Muslim’s tenants, however, are subject to the market rental value. All in all, it has been subject to the type of business. Besides, the potential tenant also should be screened concerning their attitude and awareness on the waqf (A2) instead of background check, credit check and previous history of rent payments as proposed in the previous framework. By having a good attitude and understanding the waqf philosophy, it could encourage them to fulfill their responsibilities as tenants very well.

In regards to tenancy businesses' attributes, the types of businesses,

business condition, and business strategy must be well planned and suit with the current market need to ensure the waqf properties could compete with other conventional properties. Besides of sharia compliance, best use, sustainability, opportunities, marketability and profit-making for non-profit purposes for tenancy businesses, this proposed framework outlined other significant types of businesses should be considered. To select the special tenants as outlined in tenant’s selection attributes, the consideration on types of business (B1) must be taken into account. First, the WPM should differentiate the category of businesses or development such as high (profit-commercial), medium or low-end building. This is because the tenant for each category might be different. The high-end building which is profitable commercial shall be rented to the regular market tenants. For medium-end building might be of mixed tenants; market tenants and special tenants. Then, for a low-end building like small retails farmers’ market and night market facilities should be rented to the special tenants or the needy or known as the asnaf.

In addition, all the conditions set forth for waqf premises must conform to

sharia principles (B2). It does imply that the business conducted contradict to sharia principles are considered forbidden (haram). As such there should be no elements of forbidden uses include tobacco and alcohol, pork, interest-based banking, gambling and weaponry. To strategized, this framework suggested that they shall have a good tenant profile that could attract more crowds and promote the waqf building. If possible, set up the main tenant or anchor tenant to attract more people to the waqf building especially for a big commercial centre such as a bank, GLC company, EPF, post office and others. Besides, an interesting event should be organized to attract the crowd (B3). Importantly, the activities performed could reflect the waqf's good image and expose the waqf's principles and benefits to society.

As previously suggested, the waqf istibdal could be carried out to combat the

unstrategic location of waqf premises (B4). However, istibdal issues must refer to maslahah instead of the potential assets and the decision of the Fatwa Committee by SIRC. Then, the researchers proposed that the services of the waqf properties must be emphasized on the provision of ibadat purposes while adding sharia value such as the location of musolla. By right, putting the sign of musolla could entice more patrons or customers to business premises. However, every service to be

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equipped at waqf premises must in line with the intention of waqif but depends on the manager to most potential services. Also, in order to attract visitors and make large sales, the framework proposed that an attractive signboard for the waqf property is essential (B5). By doing this, visitors are aware of the existing waqf properties and the product or services that the premise offered. Moreover, colour scheme for waqf building as building identity could also be as the strategy of marketing.

Concerning rental determination’s attributes, the researchers propose that the

rental charged (C1) should be based on market value. As mentioned earlier, the incentive would be given by the zakat for special tenants who cannot afford to pay rent according to the market value. Thus, this framework has proposed a discount of 5% of the market rental to the special tenants. 50% of the rental would be paid by the special tenants and another 50% would be sponsored by the distribution of zakat. However, this has to be subjected to the zakat calculation and regulation by the respective states. Of note, this suggestion was more practicable for medium-end building.

Furthermore, rental collection (C2) for waqf properties suggested that rental

payments should be made through a bank transfer (GIRO). A bank giro transfer is a method of transferring money by instructing a bank to directly transfer funds from one bank account to another without the use of physical checks. As the rental default was the most challenging issue faced by WPM, the researchers propose that this type of payment appears capable of disciplining tenants in fulfilling their obligations as waqf tenants. Indeed, their monthly payment could make a huge contribution to the beneficiaries. Hopefully, this alternative payment might decrease SIRC's default tenant figures. Then, the rental increment (C3) should be implemented based on market rental. But the full consideration must be given to the new facilities provided by the landlord which was based on the tenant’s needs and performances of businesses.

Basically, the tenancy agreement’s attributes concern for tenancy process

which tends to be most crucial in this development of the framework. To make it flexible for both WPM and tenant, the framework has proposed that the duration of the tenancy (D1) shall be (1+1+1). It does mean that the duration of one (1) year with an option to renew for another one year and up to two years renewal at the same monthly rental. The rental will be reviewed after three (3) years. This could provide that the flexibility to terminate the tenancy by the tenant will be increased and WPM may reduce the risk of default tenants. By this way, the chances of tenant retention could be longer and the WPM could manage the tenant easily.

Moreover, the attributes of responsibility (D2) suggested that the process of

maintenance must be sharia compliance such as using halal and good cleaning products. Lastly, for the responsiveness dimension proposed by WPM (D2), it shall be done in a shorter time. For on-site WPM, it should be done within half an hour. Then, it would be two hours of response time if in the case was off site but subjected to the terms and condition. Thus, any complaints or request shall be voiced by any medium and must be followed by the the filling up relevant form. However, other suggestions made in security & utility deposit (D3) are proposed about two months'

rent as security deposit, and a half a month’s rent as utility deposit. Then, sublet (D4) not

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allowed to be implemented since it is presumed risky. In the case whereby the tenant wants to move out before the expiry of their

tenancy (D5), the tenant are obliged to pay full unexpired term with 6 months’ notice in writing. It is based on Fiqh concept that the Muslims are bound to their covenants (clauses), except the covenant (clause) which prohibits the lawful or permits the illegal. However, if there is a new tenant, WPM shall return the payment made the previous tenant. It was to prevent the action of taking double profit by the landlord.

Besides, rental default (E1) proposed as following; i) issuance of bill-triggered

to pay-(1st-7th of the month), (ii) after 7 days in rental arrears-(14th of the month)- 1st notice, (iii) if fail to pay within 14 days from the 1st notice-(28th of the month)-2nd notice, (iv) Notice of expiry (after 30 days)- LOD-letter of demand. As waqf emphasizes the social welfare, thus there is no harsh approach implemented in enforcement’s attributes. The researchers propose that the penalty (E2) for the waqf properties might be implementing through sharia compliant approach. It was based on ta’widh (actual cost) and gharamah. Ta’widh may be charged on late payment of financial obligations resulted from exchange contracts. Besides, ta’widh may only be imposed after the settlement date of the financing became due as agreed between both contracting parties. Islamic financial institution may recognise ta’widh as income on the basis that it is charged as compensation for actual loss suffered by the institution. The rate of charge was fixed at 1% which based on outstanding principal balance.

However, gharamah is the penalty to avoid late payment but shall not be

recognised as income. Instead, it has to be channeled to certain charitable bodies. For example, one percent from the rental (based on covenants and market-rate) will pay to charity or baitulmal. The imposition of ta’widh and gharamah on delayed payment of debt is an appropriate approach to mitigate the harm suffered by the landlord, and at the same time instilled discipline on the tenant to make payment according to the stipulated schedule. Therefore, the penalty adopted by BPTM was not adopted since it was not sharia compliance. However, eviction (E3) could be applied if the tenant fails to comply with any terms of the agreement (breach of contract) and the tenant uses the premises for any unlawful purpose or any other purpose which is otherwise agreed by the superintendents in writing.

For waqf property manager’s attributes, qualification (F1) suggested that the

tenants shall be a competent and professional, understanding of waqf and Sharia (Islamic expertise/principle) and shall graduate in real estate and have an experience in real estate. Then, property inspection shall be carried out to confirm that no illegal and non-sharia activity is taking place (F2). Besides, property inspection could detect any maintenance or repairs needed and ensure tenants are complying with the terms of the tenancy. While, in regards to governance (F3), it is a good way to encourage the tenants to participate any program in related to waqf as to ensure they really understand the nature of waqf instead of increasing their awareness. Since maintenance should be given priority for distribution, even if the waqif has stipulated it or not, this distribution is proposed (F4). The allocation should be channeled to; (i) management and maintenance, (ii) outgoings (quit rent, assessment rate, property tax, fire insurance), (iii) sinking fund (upgrading/ major repair) and (iv) beneficiaries. The proposed framework illustrates in Figure 5.

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Sharia

Compliant

Tenancy

Management

Sustainable

income return

C: Rental Determination

D: Tenancy Agreement

E: Enforcement

F: Waqf Property Manager

C1: Rental Charged

C2: Rental Collection

C3: Rental Increment

D3: Security & Utility Deposit

D5: Early Termination

D4: Sublet

D2: Responsibility

D1: Duration

E1: Rental Default

E3: Eviction

E2: Penalty

F2: Property Inspection

F1: Qualification

F3: Governance

B3: Business Strategy

B2: Business Condition

B4: Businesses Location, Facilities and Services

BE

ST

PR

AC

TIC

E T

EN

AN

CY

MA

NA

GE

ME

NT

(BP

TM

) B

PT

M O

F W

AQ

F P

RO

PE

RT

IES

INT

EG

RA

TE

D S

HA

RIA

CO

MP

LIA

NT

AN

D B

PT

M F

OR

WA

QF

PR

OP

ER

TIE

S

TENANCY MANAGEMENT ATTRIBUTES

F4: Waqf Disbursement

Figure 5: Sharia Compliant Tenancy Management Framework for Waqf Properties

B1: Types of Business

B5: Marketing

B: Tenancy Businesses

A2: Tenant Screening

A: Tenant Selection

A1: Tenant Criteria

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With regards to the framework above, the results of the integration between best practice, waqf needs and Sharia compliance are depicted in the following diagram.

Figure 6: Integration of best practice, waqf needs and sharia compliance

Overall, three (3) groups of integration were discovered. Firstly, BPTM was not adopted as it did not meet the waqf needs. It included of tenant selection (A1), rental charged (C1), duration (D1), early termination (D5) and waqf disbursement (F4). As far as waqf plays a major role in economic and social welfare of Ummah, thus stipulation of tenant selection (A1) and rental charged (C1) must give the consideration to the special tenant like asnaf for reducing the poverty rate in our country. Similarly, the remedy intended to be implemented especially for the tenants to move out (D5) before the expiry of their tenancy not too harsh and must in line with waqf needs. Besides, by proposing the duration of one (1) year with an option to renew another one (1) year up to two (2) years (D1) could provide the flexibility termination for the special tenant. Moreover, waqf disbursement (F4) must be also aligned with the intention stipulated in waqf deed. Instead, BPTM and sharia principles have no clear rules mention the best policy for distribution. Hence, all the TM attributes stated above should give special consideration in order to fullfill the objective of waqf.

Secondly, BPTM was not adopted since it was not sharia compliant which was

penalty (E2). Thus, the penalty (E2) for default tenants was proposed based on sharia compliance. Finally, the integration BPTM was adopted as it did apply waqf and conforming sharia principles. The attributes embodied were tenant screening (A2), types of business (B1), business condition (B2), business strategy (B3), business location, facilities and services (B4), marketing (B5), rental collection (C2), rental increment (C3), responsibility (D2), security and utility deposit (D3), sublet (D4), rental default (E1), eviction (E3), qualification (F1), property inspection (F2) and governance (F3).

39

In essence, the third group was to integrate the BPTM while adhering to waqf

needs and sharia compliance. However, the vulnerability has existed for those TM attributes in group 1 and 2, thus BPTM could not be adopted.

Conclusion 5.0.

This research has developed a framework that leads to better understanding on the sharia compliance in waqf TM and provides better solution in sustaining income of the waqf properties. It is imperative to note that there have been not many studies conducted on TM of waqf properties. Therefore, by adopting the BPTM in the developed framework, it is expected that this research would assist in innovating the waqf management system so that it can be more effective and efficient.

The differences of conventional tenancy management and sharia compliant tenancy management have been expanded through this research. Tenancy management attributes is conceptualized as a composite of six attributes such as tenant selection, tenancy businesses, rental determination, tenancy agreement, enforcement and property manager. This framework can be regarded as the important theoretical implication for research in related fields because it provides the characteristics of tenancy management in three different viewpoints that can be facilitated and improvised the waqf tenancy management.

A further significant methodological implication includes the selection of the triangulation of data (FGD, semi-structured interview, observation and document review) to counterbalance the weaknesses of each method. This research has overcome the limitations and provides a better insight into sharia compliances in waqf tenancy management practices.

This research will assist the researchers and waqf properties stakeholders to address the issues in tenancy management of waqf properties. This research could be a guideline among SIRCs to streamline and regulate income generating of waqf properties. By adopting the BPTM, SIRC as the Mutawalli will be better able to manage waqf properties and lead to waqf properties to be on par with other properties eventually. On the other hand, this study provides guideline for the waqf stakeholder to implement a sharia compliant tenancy management for waqf properties. By right, it could be a guideline for the professional property managers if they were to be appointed by SIRC to manage the waqf properties. Better managed waqf properties will cause more assistance to Muslims. As a result, the investors would be more confident in investing in waqf properties resulting from more sustainable income will be generated.

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EXECUTIVE SUMMARY: PAPER 3

PRESENTER: DR. HJ ABDUL SHUKOR BIN SHAMSUDIN, UUM

FOSTERING CUSTOMER SATISFACTION ON THE ECO-

BASED RESIDENTIAL DEVELOPMENT IN MALAYSIA

43

FOSTERING CUSTOMER SATISFACTION ON THE ECO-BASED RESIDENTIAL DEVELOPMENT IN MALAYSIA

1Abdul Shukor Shamsudin 2Mohd Sobri Minai 3Ali Yusob Md Zain 4Abd Rahim Romle

1,2,3School of Business Management, Universiti Utara Malaysia 4School of Government, Universiti Utara Malaysia

Abstract Awareness of the delicate balance between bio-ecological systems and the need for the industrial development and achievement is becoming more sensitive. It focusses on the well-being of the natural environment whilst conducting such development. The main objective of this study is to identify the key eco-based residential features and their relationship with buyer’s satisfaction. A quantitative approach was used in this study. The data were gathered through personal-administered survey questionnaires and a total of 284 respondents participated in this study. The SPSS 23.0 was the main statistical tool employed for analysing the data collected. The findings revealed that the eco-landscape and eco-energy are the most important features in eco-based residential development. It was observed, the price of the property is no an important factor of consideration for the potential buyers. In general, eco-based residential buyers are satisfied with their purchases. Finally, based on the findings, the recommendations and direction for further research also discussed. Keyword(s): Eco-based residential development, eco-based residential features, buyers’ satisfaction

INTRODUCTION The rapid industrialization of agriculture and the commercialization of farming have

led to a greater pressure to continuously increase the product’s yield. In many ways,

the systematic and satisfactory development to all have been achieved through

strategic management in the respective industry. For example, within the context of

agricultural management, the better disease management, better pest management

and use of growth hormones, genetic engineering through cloning and stem cell

research, etc. However, very often, to achieve these results, it involves extensive use

of chemicals such as pesticides, growth hormones, and newly cloned materials.

Thus, such development must be balanced with the needs and demands of the

44

human being who modified their preference, especially in the recent years, to a more

eco-friendly environment.

Consequently, an increased consumer activism resulted in the rapid growth and

development of organizations to protect the environment like Green Peace, World

Wildlife Fund initiatives such as save whales, tigers, dolphins, orangutans etc. As

consumer demand for more environmentally non-destructive business practices

grew, the industry responded by adopting and embracing concepts of sustainability

and eco-friendliness in their Corporate Social Responsibility (CSR) manifestos.

Although many companies initially applied or utilized the concepts more, as a

marketing tool, however, research has since shown that companies that incorporated

“environmentally friendly”, “green”, “sustainable”, “sustainability”, “eco-friendly” or

“eco-based” practices tend to have better success, sales and profitability than those

which do not (Ibiyemi, Adnan, & Daud, 2015) .

Furthermore, some of the Malaysian property developers have used eco-based and

sustainability approaches as a marketing tool to promote their property development

projects. However, in Malaysia, generally, there may be a lack of awareness and

motivation from the customer perspective of the need to be more committed towards

practices that would be regarded as being eco-friendly especially with regards to

purchasing properties with eco-friendly features. While there are a number of

organisations that exists to promote the “green” agenda, the high visibility efforts are

normally done though the Federal Government and its ministries. The Ministry of

Science, Technology and the Environment and The Ministry of Energy, Green

45

Technology and Water (KeTTHA), are mainly responsible for the operational aspects

of managing the “green” agenda.

In Malaysia, the eco-based real estate development has gained much interest from a

number of stakeholders. There is an increasing trend of such developments,

introducing various concepts and approaches as to what constitutes an eco-based

environment (Jacobs, 2016). To promote the country’s efforts for eco-based

residential development, the role of consumers is essential. If consumers exhibit a

high degree of ecological concern and channel it into some eco-friendly purchasing

behaviors, it is likely that profit-driven developers will be motivated to adopt the

concept of eco-based approach in their operations. In short, the dynamics of this

buyer-seller interaction will lead to a further advancement of the eco-based revolution

in the country (Ottman, 1992; Salzman, 1991). Thus, in order to better understand

this eco-based residential development in Malaysia, an examination of how the

consumers view ecological issues, and how these views are reflected in their

purchasing behavior on green issues serves as a good starting point.

LITERATURE REVIEW

Malaysia’s Eco-based Residential Benchmarks

Initially, benchmarking provides a mean to compare practices against other practices

and subsequently identify area where improvement can be made to increase

performance. There is no specific rule whether to accept or reject benchmarking

features and indicators. The importance of eco-based features vary from region to

region, country to country and even county to county. The researchers after careful

consideration have decided for the Malaysian situation the appropriate eco-based

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residential benchmark features should consist of eco energy, eco design, eco water,

eco construction, eco master plan and finally eco landscape. The following table

provides benchmark indicators for eco-based residential development in Malaysia.

Table 1: Eco-based benchmark features

Features Indicators

Eco energy Renewable energy, energy efficiency, and energy

management

Eco design Building orientation, window design, shading mechanism,

cool roof, natural ventilation, natural lighting, and recycling

ready

Eco water Renewable water, and water conservation

Eco construction Responsible construction, construction waste recycling, and

using green or eco-label materials

Eco layout plan Greenscapes and waterbodies, pedal ready, and green

mobility

Eco landscape Natives plants, biodiversity, landscape irrigation water, tree

preservation, and composting

Source: Eco World Development Group Berhad and current literature

Satisfaction with the Eco-based Features

Bruin and Cook (1997) explored that behavioural characteristic like (i) residential

characteristics, (ii) safety and security and (iii) friendly relationship with their

neighbours are the powerful factors of customer satisfaction in purchasing decision.

Ukoha and Beamish (1997) found that the satisfaction is based on the services

provided by the construction company. The satisfaction level also depends on some

economic factors like economic benefit, improvement in quality of life, planning and

environmental issues. These factors of residential characteristics, the economic

factors and the services provided are being referred to by current researchers such

47

Balta-Ozkan, Davidson, Bicket and Whitmarsh (2013) and are key factors to be

explored in this research work.

Carolyn and Gladys (1998) suggests that customers show their frustration and

dissatisfaction through taking harsh action (legal action) against the developers for

reasons such as taking a long time for handing over the project, not fulfilling

promises and poor after sale services. Thus, developers must ensure that buyers are

fully satisfied in order to avoid unnecessary litigation. Again, satisfaction can be

fulfilled by other factors. Liu (1999) found that both physical and social factors

influence the residential satisfaction. He highlighted that customer satisfaction

depends on both cleanliness and maintenance of the flat. Al-Momani (2000)

emphasized on the quality of service and found that the company paid little attention

to the customer needs (like customization) leading to its poor performance.

Holm (2000) stated that housing satisfaction largely depends on the construction

process. He examined the difference between the customer satisfaction and

expectation, and the perception of manager regarding the construction process for

the construction company. This process is assumed to cover the aspects such as (i)

responsible construction, (ii) recycling of construction wastes and (iii) usage of green

or eco-labelled materials.

Djebarni and Al-Abed (2000) found that customers who purchase their flat for low

cost are highly dissatisfied with the facilities provided by the construction company.

Apartment size is one of the important factors to evaluate the customer satisfaction.

Soetanto (2001) suggests that the performance of a construction company should be

48

improved to increase the customer satisfaction level. Satisfactory performance of the

company leads to maintain harmonious relationship with the customers’.

Parker and Mathews (2001) stated that satisfaction can be measured by determining

the relationship between the customer expectations and what they received. Maloney

(2002) states that customer as an organization that includes the interest of the

construction service buyer, potential users and other interest groups. Novak (2008)

indicates that customer satisfaction is measured by comparing buyers ‘satisfaction

and perception based on their location. Nahmens and Ikuma (2009) in the article

named “Discovering the variables that influence new home buyer service

satisfaction” found that higher income, price and larger house size are the factors

that influence home buyer satisfaction. Hui and Zheng (2010) revealed that high

quality service is an important variable to measure the customer satisfaction. He

found that service quality has larger impact on satisfaction of home buyers’ than the

management quality.

Santiago et al. (2010) in the article “Low income home ownership: does it necessarily

mean sacrificing neighborhood quality to buy a home?” states that low income

homebuyers may be forced to buy a home in disadvantaged region. This is a latent

problem because buying home in such region may limit appreciation, may reduce the

quality of life. Dekker et al. (2011) found that satisfaction level is high for elder

customers and customers with high income because customers can customize their

apartment based on their income level and experience.

49

Mustafa and Ghazali (2012) suggest that buying behavior model and the gap

analysis model are used to calculate the satisfaction level. The author use delivery

system as an independent variable and house buyer characteristics as a moderating

variable to measure the satisfaction level of the customer. Fang (2005) states that

customers who lived in an area for longer period showed more dissatisfaction levels

towards their neighborhoods.

Chen, Martin and Merchant (2014) states that two sets of customer satisfaction

measures are found from the homebuilding company to evaluate its performance

they are future financial performance and association timing between the customers

and the company. He finds that timing has a large impact in customer satisfaction

measures.

The housing industry has progressed from its early inception from a basic shelter to

providing a portrayal of personal success and aspiration, which includes the aspect

of safety, love, peace and freedom (Marcussen, 1990). It also involves the service

and infrastructure or facilities (Kemeny, 2013). In addition, housing involves activities

that generate economical benefit, improve the quality of life, and plan and solve

environmental issues (Yusof et al., 2016). The Ministry of Housing and Local

Government in Malaysia (MHLG) emphasizes that housing should provide residents

with safety, security, comfort, health, privacy and other services (José Vilares &

Simões Coelho, 2003).

In addition to the above, it is a fact that most people consider buying a house as an

important event in a person's life. It is considered as the single biggest capital

50

investment undertaken by a person in his or her lifetime. Therefore, such experience

would bring a sense of achievement and joy to those who pursue it.

METHODOLOGY

Sample

A pilot study was conducted from 27th August 2017 to 31th August 2017. It took place

at the following locations: (i) 35 Pearl Villas (SP Setia Bhd), (ii) The Light (IJM Land

Bhd), (iii) 11 Brook Residences (SP Setia Bhd) and (iv) 9 Brook Residences (SP

Setia Bhd). The contacts were identified through the internet based on the attribute of

(i) green residential building and (ii) northern region location.

In the real study, the researchers targeted 400 sets of respondents to be

administered by ten enumerators and only 284 sets of questionnaires were usable.

The enumerators face various difficulties in getting the access to the respondents to

the extent that they have to stop potential respondents when they were out for their

evening workout.

Reliability Analysis

The survey instrument consists of six scales measuring the respondents’ satisfaction

levels with the eco-based features. The reliability coefficients of the scales were

assessed using Cronbach’s alpha measure of internal consistency. The reliability

scores of the scales range from 0.690 to 0.875, indicating that the scales have

adequate internal consistency properties and are suitable for further statistical

analyses. The overall satisfaction score (comprising all the six satisfaction scales) is

0.925. The results of the reliability test are shown in Table 2.

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Table 2: Reliability of measurement scales

No Scale regarding eco-based features Cronbach’s Alpha

1 Satisfaction with energy .785

2 Satisfaction with design .875

3 Satisfaction with water .690

4 Satisfaction with material .747

5 Satisfaction with layout plan .792

6 Satisfaction with landscape .760

7 Overall Satisfaction .925

DATA ANALYSES, DISCUSSIONS AND RECOMMENDATIONS

Profile of Respondents

The detailed profile of the respondents is shown in Table 3. Respondents who were

selected to participate in the survey were from five locations: Eco Hill Semenyih

(31.3%), Eco Park Setia Alam (31%), Eco Glades Cyberjaya (26.4%), SP Setia

Penang (7.7%) and IJM Land Penang (3.5%). In terms of ethnic group, there were

50% Chinese respondents, 32.4% Malays, 14.1% Indians, and 3.5% of the

respondents were from the other ethnic groups (including non-Malaysians). Most of

the respondents were from the 45 years or below age groups. They make up about

79% of the total respondents, whereas the 46 years and above age group is only

about 21%. The percentages of respondents based on their educational levels are

about equal, i.e. about 50% for both groups (respondents with university degrees or

higher, and respondents with diplomas or lower).

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Table 3: Profile of Respondents

No Demographic Characteristics Frequency (N) Percentage (%)

1 Location Eco Hill Semenyih Eco Glade Cyberjaya Eco Park Setia Alam SP Setia Penang IJM Land Penang

89 75 88 22 10

31.3 26.4 31.0 7.7 3.5

2 Ethnicity Malay Chinese Indian Others

92 142 40 10

32.4 50.0 14.1 3.5

3 Age (Years) 35 and less 36 to 40 41 to 45 46 and above

67 91 64 62

23.6 32.0 22.5 21.8

4 Education High School and Diploma Degree and higher

140 144

49.3 50.7

Satisfaction of the Purchasers with Eco-based Features

Table 4 reported that the respondents’ satisfaction with the eco-based features were

assessed by taking the mean satisfaction scores as the indicators. Of the six

features, respondents were most satisfied with the design of their eco-based

residents. There are seven criteria which are used to define the design feature. The

levels of satisfaction with the respective criteria, in the descending order of their

mean scores are: window, building orientation, natural lighting, natural ventilation,

shading mechanism, cool roof, and recycling ready. This indicates that, the

developers of eco-based residential projects should pay more attention to the design

features which are relatively less satisfying. Future eco-based residential projects for

example, should consider some improvements to the recycling aspect of the design

feature, e.g. by providing collection centres for recyclable materials which are easily

accessible to the residents.

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Table 4: Satisfaction of the Purchasers with eco-based features

Features Mean S.D.

Design 1.Window 2.Building orientation 3.Natural lighting 4.Natural ventilation 5.Shading Mechanism 6.Cool roof 7.Recycling ready

4.301 4.378 4.363 4.331 4.324 4.282 4.229 4.191

.498

Landscape 1.Biodiversity 2.Native plants 3.Tree preservation 4.Irrigation water 5.Composting

4.291 4.391 4.336 4.324 4.289 4.109

.453

Water 1.Renewable water 2.Conservation

4.248 4.271 4.225

.519

Energy 1.Renewable Solar 2.Efficiency 3.Management

4.199 4.286 4.194 4.124

.620

Layout Plan 1.Greenscapes and waterbodies 2.Green mobility 3.Pedal ready

4.199 4.307 4.181 4.088

.572

Material 1.Responsible construction 2.Using green or eco label materials 3.Construction waste recycling

4.175 4.193 4.168 4.151

.509

Other aspects in the design feature which are relatively less satisfying are the

installation of cool roof and suitable shading mechanism. Cool roof has two main

properties: solar reflectance and thermal emittance. These properties help reduce

electricity used for air conditioning by lowering roof temperatures. Probably, to suit

the Malaysian climate, the cool roof materials used in residential buildings should

have higher SRI (solar reflectance index) and also a higher thermal emittance in

order to provide a “cooler” indoor temperature.

The eco-based feature with the second highest score on the satisfaction level is the

landscape. Under the landscape, there are five eco-based aspects. Respondents

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were least satisfied with the “composting” and “irrigation water”. In terms of

composting, improvements could be made by the developers through the provision of

suitable facilities for residents to turn their stuff into compost. This is to avoid the

need for the residents to have the composting buckets in or close to their own

homes.

Proper drainage in residential areas is one of the most important aspects for a

comfortable living. Without proper drainage, the areas may experience flash floods

when there are heavy rainfalls. Developers need to pay attention to this aspect so

that the water flow is not hindered due to an unsuitable drainage system in the

residential area.

The third eco-based feature is water, comprising irrigation and conservation aspects.

The level of satisfaction with this feature is relatively low. Water use reduction is an

important aspect of many eco-based residential projects, and one way to achieve this

is to collect rainwater for non-potable uses, such as watering the landscaping

vegetation. Developers should improve on this aspect by introducing suitable and

efficient rain harvesting technology for their eco-based residential properties.

Energy, which includes renewable energy, energy efficiency and energy

management, is also one of the main eco-based features provided in the residential

properties. Among the aspects of this feature, energy efficiency and management

are relatively lower in the levels of respondents’ satisfaction. Possible actions to be

considered for future development, in order to reduce energy use include: installation

of Energy Star appliances, and programmable thermostats.

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In terms of the layout plan of the residential area, respondents are least satisfied with

the “pedal ready” element. This refers to the provision of proper infrastructure for

residents of the eco-based homes to be involved in cycling activities. Cycling could

also be an alternative to other less eco-friendly modes of transportation. The initiative

taken by one of the developers to encourage bike-sharing programme in their

development project could be emulated by other developers.

The last feature with the lowest mean score of satisfaction among the six eco-based

features is material. This includes responsible construction, use of green-labelled

materials, and recycling of construction waste. Generally, the mean satisfaction

scores of the three aspects are relatively low.

Multiple Regression Analysis

A multiple regression analysis was conducted by taking the levels of satisfaction with

the eco-based features as the independent variables, and the overall satisfaction

score as the dependent variable. The purpose of the analysis is to examine the

relative effects of the independent variables on the overall satisfaction with eco-

based residential properties. The results of the regression analysis are shown in

Table 5.

Derived from the Table 5, it can be concluded the order of importance for the eco-

based features in affecting the level of buyers’ satisfaction are Eco-landscape and

Eco-energy. Followed by, eco-design, eco-water, eco-layout and eco-material.

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Table 5: Levels of Satisfaction with the Eco-Based Features

Model Unstandardized Coefficients

Standardized Coefficients

t Sig.

B Std. Error Beta

1 (Constant) .969 .948 1.023 .308

Ecoenergy .416 .102 .330 4.082 .000

Ecodesign .469 .297 .190 1.581 .116

Ecowater -.245 .209 -.115 -1.174 .243

Ecomaterial -.056 .205 -.023 -.275 .784

Ecolayout -.089 .202 -.039 -.438 .662

Ecolandscape 1.355 .245 .457 5.537 .000

Recommendations

By looking at the present study, there are several approaches and areas that future

research should take into consideration and focus on. As mentioned earlier, this

study employed cross sectional approach to collect data. This approach is a research

tool applied to capture information based on data collected from a pool of

respondents with varied characteristics for a specific point in time. One of the

disadvantages is a cross sectional study cannot be used to analyze behavior over a

period of time. Therefore, we strongly believe a longitudinal study could examine

eco-based residential buyers’ satisfaction after they are staying in the property for

several (five to 10) years and this may provide some very valuable and useful

insights accurately.

This study had a single emphasize of eco-based residential property buyers in

Malaysia. There is further research opportunity exist that may broaden the

knowledge in eco-based residential development in Malaysia. One of the opportunity

is future researcher could conduct a comparative study on the satisfaction level of

eco-based residential buyers and ordinary residential buyers. Comparative study is

seen important as it enables researchers to explore and examine some possible

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phenomena and reveal whether there are some specific reasons or characteristics

between the two groups of house buyers. The findings might be useful to the

government agencies to formulate some suitable and attractive incentives, such as

assessment reduction, that may encourage more people to invest in eco-based

residential property as this is in accordance with the Government’s Green

Development Policy.

CONCLUSION

Although there are many definitions of eco-based residential concept assumed in this

development context, however, it is obvious that stakeholders, specifically the buyers

have almost similar perspective on eco-based residential features. Eco-landscape,

and eco-energy are seen as the two most important and must have features,

followed by eco-design, eco-water, eco-layout and eco-material in eco-based

residential development. The findings of the study also suggested that eco-based

residential buyers are satisfied with their purchase as the developers delivered what

they promised.

ACKNOWLEDGEMENT The researchers would like to thank The National Real Property Research Coordinator (NAPREC) for granting this study. Appreciation also dedicated to the comments and continuous support by the panel of experts.

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EXECUTIVE SUMMARY: PAPER 4

PRESENTER: PROF. DATO’ SRI AR. DR ASIAH ABDUL RAHIM, UIAM

THE EFFECTIVENESS OF MAINTENANCE MANAGEMENT

THROUGH IMPLEMENTATION OF BUILDING

MAINTENANCE POLICY IN COMMERCIAL HIGH RISE

BUILDING

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1.0 Project Title

The Effectiveness of Maintenance Management Through Implementation Of Building Maintenance Policy In Commercial High Rise Building

2.0 Project Team

- Leader : Prof. Dato’ Sri Ar. Dr. Asiah Abdul Rahim (IIUM) - Researchers :

o Sr. Dr. Mohamad Ridzuan Yahya (UiTM) o Ir. Shahrul Nizar Shaari (Innovacia Sdn. Bhd.) o Assoc. Prof. LAr. Dr. Mohd Ramzi Mohd Hussain (IIUM) o Asst. Prof. Dr. Izawati Tukiman (IIUM) o Dr. Zulkefle Ismail (Politeknik Port Dickson)

- Research Assistants : o Nur Amirah Abd Samad (UKM) o Wan Mohamad Amin W Seman (IIUM)

3.0 Abstract & Keywords

Nowadays maintenance management in commercial high-rise buildings is quite complex in the operation and maintenance activities. In Malaysia, most of them carried out the operation and maintenance activities based on term and condition of contract agreement and company regulation where they consider as a building maintenance policy. There were two (2) objectives in this study which to identify an existing implementation of maintenance policy in maintenance management and to analyse the effectiveness of maintenance policy towards maintenance management performances. The fundamental investigation was to review maintenance policy with respect to maintenance strategy, acceptable maintenance policy standard and resources. The methodology applied for this research by using questionnaire based on rating scale and structured interview building stakeholders. The data was analysed using combine method qualitative and quantitative. It is evident from the findings that the implementation of maintenance policy was varies from one building to another. It reflects to the maintenance performance, which was not consistent. Hence, maintenance management should implement maintenance policy as outlined by Malaysian Property Management Standard (Second Edition 2016).

Keyword: Maintenance Management, Commercial high rise building, Policy

4.0 Introduction

- Problem Statement

Nowadays maintenance management in commercial high-rise buildings is quite complex in the operation and maintenance activities. In Malaysia, most of them carried out the operation and maintenance activities based on term and condition of contract agreement and company regulation where they consider as a building maintenance policy. They were facing serious problems with the quality of maintenance management, which cannot meet the current standard of building

63

policy. However, the development and implementation of sustainable building policy in that particular building is still lacking.

- Research Objectives

The research objectives are: i. To identify an existing implementation of maintenance policy in

maintenance management ii. To analyse the effectiveness of maintenance policy towards

maintenance management performances.

5.0 Literature Review

Maintenance management refers to how well a building is maintained. British Standard 3811: 1964 defined maintenance policy as an approach contained by which maintenance decisions are made. According to British Standard BS8210: 1986 Section 2, a maintenance policy should ensure that value for money expended is obtained, in addition to protecting both the asset value and the resource value of the buildings concerned and the building owner against breaches of statutory and legal obligations. It is important to have a well-developed building maintenance management to guarantee the building always in high-quality circumstance. The building maintenance policy is very significant to building owner, tenants, customers, users and maintenance professionals in order to ensure that they are in safety zone all the time and get the benefits. They also need high level of services and awareness since their expectation is generally high. According to Mohamad Ridzuan, Y. and Md. Najib, I. (2015), maintenance management operations in high-rise building are more complicated, which leads to advanced maintenance policy. There is a connection between improving maintenance effectiveness and the maintenance policy implementation, the top management constantly requests to recognize further on the efficiency of maintenance performance. Mohamad Ridzuan, Y. and Md. Najib, I. (2015) discover that maintenance services are not obvious and are always unseen by the management. Concept of Building Maintenance Policy According to Lee and Scott (2008), the building policy is a written document that act as tool to planning and determine the framework to all maintenance strategy and standard. In addition, Lee and Scott (2008) identify building policy and strategy, strategic management, facilities management and performance management as the four main aspects influencing the sustainable of maintenance management operation processes. Improving the building policy is one of the major component in achieving the maintenance objective and goal in adequate (Adenuge et al, 2010). Mohamad Ridzuan, Y. and Md. Najib, I. (2015) state that high rise office building in Malaysia mostly carried out the maintenance works based on contract agreement and company regulation where they claim that is a maintenance policy.

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According to Lee and Scott (2008), maintenance framework and strategy cannot implement successfully by responsible personnel without fully understanding the basic essential element of maintenance policy such as the maintenance strategy, defining maintenance standard and allocation of financial for maintenance works. Adenuge et al, (2010) claim that, the building maintenance policy will ensure the effectiveness of maintenance work in the building and will reflects toward the building performance with suitable approach and strategy to sustain the value and economic of the building and expand the lifespan of the building. Key elements of a building maintenance policy According to Arazi et al. (2009), the strategic of maintenance work need to be planning by building maintenance policy and facility management to sustain the value of the building in safety, quality and service aspect. James et al.(2016) state that, the building maintenance policy should be carried out in maintenance management in order to sustain high level of productivity based on maintenance strategy, standard, and allocation of maintenance resources. Maintenance policy is a tool for maintenance personnel to plan their appropriate maintenance strategies. However, before a maintenance programme is prepared, maintenance personnel and top management are required to agree on maintenance policy because it requires strategic directions, as well as resources. The maintenance policy consists of five (5) major components, and different maintenance strategies are developed from these components. Without defining this policy, maintenance operation processes will be in a haphazard order. The five major components (CEM, 1994; RICS, 1990; Chanter and Swallow, 1996; Lee and Wordsworth, 2001) are as follows:

The length of time for maintaining for their present use. The life requirements of the buildings and their fittings and services. The standard to which the building and its services are to be maintained. The reaction time required between the defects occurring and a repair being

carried out. The legal and statutory requirements shall also be considered.

Following with these five major components in maintenance policy, the sequences for formulating maintenance policy and strategy is summarized in Figure 1.1.

Figure 1.1: Sequences for formulating building maintenance policy and strategy. Essentially, a departmental maintenance policy should identify how, and by whom, the maintenance of the department’s building assets is to be managed. The policy should be structured to include the following components:

A statement of the policy’s intent and objectives The scope of the policy

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The details of the policy (i.e. the policy requirements) Allocation of responsibility for implementing the various policy requirements Continuous improvement arrangements for the policy, including policy review

procedures. Policy Frameworks for Building Maintenance The worth of buildings largely rely on the safety, quality and service of the standard of policy given and enforced in them (Mohamad Ridzuan, Y. and Najib, I., 2011). The definitions of policy of maintenance have been given as a system by which decisions on maintenance are made (BS 3811:1964). Several studies have defined the policy of maintenance being a framework of management embracing varying type of strategic maintenance to guarantee that properties/facilities are adequately maintained (Lee and Scott, 2008). The policy of maintenance framework stands as document that is official which indicate the parameters, procedure, guidelines in full description. The situations of management of maintenance have no general acceptable suitable layout. A format being used for a specific situation must be geared towards a specified need and programme of the host organisation (RICS, 2013). The policy of maintenance have to guarantee the certainty of worth for money spent are attained and also protect the asset and the resource value of the buildings concerned. It should also ensure that the building owner is not held liable of any breach of statutory or legal obligations (BS 8210:1986). The policy of properties/facilities maintenance standard should yield much profit on expenditure incurred on actions of maintenance (Lee and Scott, 2008). The safe environment and benefit guaranteed by the maintenance policy has made it much important to stake holders such as facilities/maintenance managers, customers, owners and tenants (Mohamad Ridzuan, Y. and Najib, I., 2011). The Effectiveness Criteria Building Maintenance Policy The approach taken to determine condition standard ratings should be outlined in the departmental building maintenance policy and in any related departmental documents (e.g. asset management manuals). Once determined, condition standard ratings form the basis of instructions to the maintenance service provider regarding the level to which the department expects building assets to be maintained. For this reason, it is imperative that ratings clearly communicated to service providers and carefully documented in procurement arrangements such as Service Level Agreements (SLAs). Ratings will be used by the service provider within the condition assessment process that to identify gaps between the desired and actual condition of buildings. Providers can then determine and report maintenance works necessary to return buildings to the desired standard. Condition standard ratings also will be referenced by service providers during the day-to-day maintenance delivery process, including delivery of unplanned works. This regular referencing will ensure that works undertaken meet – and do not exceed – the standards that have been established by the maintenance management department.

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6.0 Methodology

The Questionnaire Method

Questionnaire survey has been used as a research instrument to collect any information of the research topic. The questionnaire surveys have been distributed to the respondents who are building occupants (building owners and tenants) and maintenance management team (in-house building maintenance personnel, out-sourced contractors and out-sourced consultants). The primary data will be collected by using questionnaire surveys which distributed among commercial high rise buildings in Klang Valley, Malaysia. Questionnaire form is a survey of study which to identify the value of commercial high-rise buildings through effectiveness of maintenance management system based on implementation of building maintenance policy. The building stakeholders of each building were interviewed and got their feedback based on survey through questionnaire form which have been developed into two (2) sections:

a. Section 1: Respondent & Organization detail b. Section 2: Issue of effectiveness building maintenance policy

The Rating Scale

The likert scale able to give clearly and obvious result and ease the respondents to answering the questionnaires. Likert scale on five (5) ordinal measures of agreement were adopted in the questionnaire survey (refer to Table 3.1).

Table 1.1: Likert five-point in questionnaire

Section 1: Information about your Organisation

Value Level of Complexity

1 Very simple

2 Simple

3 Fair

4 Complex

5 Very complex

Section 2: Building Maintenance Performance And Effectiveness

Value Level of Performance and Effectiveness

1 Very Weak

2 Weak

3 Fair

4 Strong

5 Very Strong

The Interview Session

The oral interviews have be carried with in-house building maintenance personnel to obtain perspective about building maintenance. They represented the perspective from expert profession regarding the effectiveness of building maintenance policy. Only two (2) number of questions have been asked which are as follows:

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i. Question 1: What is the main factor affecting good achievement of maintenance management in high rise office building? ii. Question 2: The implementation of building maintenance policy standard as guidance able towards the facilities management performances

Case study of Current Maintenance Management Practice in High Rise Building

The buildings have been chosen randomly. The research limitation where the building typology was commercial high-rise buildings in Klang Valley only.

Case Study:

Commercial High-Rise Buildings in Selangor, Malaysia

Table 1.2: List of case study of High-rise Commercial Buildings in Selangor, Malaysia

1 Menara MBPJ

Location/Address

: Petaling Jaya, Selangor

Main Usage : Commercial Office

Height (estimated)

: 108.11 m

Floors (above ground)

: 27

2 Wisma MBSA

Location/Address

: Shah Alam, Selangor

Main Usage : Commercial Office

Height (estimated)

: 112.11 m

Floors (above ground)

: 28

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3 Menara MRCB

Location/Address

: Shah Alam, Selangor

Main Usage : Commercial Office

Height (estimated)

: 80.08 m

Floors (above ground)

: 20

4 Menara Mesiniaga

Location/Address

: 1 A, Jalan SS 16/1, Subang Jaya, Selangor

Main Usage : Commercial Office

Height (estimated)

: 63.00 m

Floors (above ground)

: 15

Floors (below ground)

: 1

5 Manara MPAJ

Location/Address

: Jalan Pandan Utama, 55100 Ampang, Selangor

Main Usage : Commercial Office

Height (estimated)

: 68.07 m

Floors (above ground)

: 17

6 Menara Axis

Location/Address

: Jalan 51A/223, Petaling Jaya, Selangor

Main Usage : Commercial Office

Height (estimated)

: 56.87 m

Floors (above ground)

: 14

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Commercial Buildings High-Rise in Putrajaya and Kuala Lumpur, Malaysia

Table 1.3: List of case study of High-rise Commercial Buildings in Putrajaya and Kuala Lumpur, Malaysia

1 KPWKM Building

Location/Address

: Putrajaya

Main Usage : Commercial Office

Height (architectural)

: 92.38 m

Floors (above ground)

: 20

2 KPKT Building

Location/Address

: Putrajaya

Main Usage : Commercial Office

Height (estimated)

: 150.30 m

Floors (above ground)

: 37

3 Menara TH Perdana

Location/Address : No.1001, Jalan Sultan Ismail, 50250 Kuala Lumpur

Main Usage : Commercial Office

Height (estimated)

: 142.17 m

Floors (above ground)

: 35

Floors (below ground)

: 3

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4 MIDA Headquarters Tower

Location/Address : Jalan Stesen Sentral 5, Kuala Lumpur

Main Usage : Commercial Office

Height (estimated) : 121.86 m

Floors (above ground)

: 30

5 Seri MARA (Medan MARA)

Location/Address : Jalan Raja Laut, Kuala Lumpur

Main Usage : Commercial Office

Height (estimated) : 113.74 m

Floors (above ground)

: 28

6 Wisma LPPKN

Location/Address : No.12A, Jalan Raja Laut, Kuala Lumpur

Main Usage : Commercial Office

Height (estimated)

: 105.61 m

Floors (above ground)

: 26

7 Wisma Sime Darby

Location/Address

: Jalan Raja Laut, Kuala Lumpur

Main Usage : Commercial Office

Height (estimated)

: 89.37 m

Floors (above ground)

: 22

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8 Dayabumi Complex

Location/Address

: Jalan Sultan Hishamuddin, Kuala Lumpur

Main Usage

: Commercial Office

Height (estimated)

: 157.00 m

Floors (above ground)

: 35

9 Petronas Twin Towers

Location/Address

: Jalan Ampang, Kuala Lumpur

Main Usage : Commercial Office

Height (architectural)

: 451.90 m

Floors (above ground)

: 88

10 KKR Tower

Location/Address

: Jalan Sultan Salahuddin, Kuala Lumpur

Main Usage : Commercial Office

Height (architectural)

: 175.00 m

Floors (above ground)

: 37

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7.0 Result

Management for Property Asset

Most of buildings:

Certain positions primarily supervise trades work in a certain specialty area while others will supervise general works in multiple trades.

Work supervised includes maintenance, repair, replacement, fabrication, installation, alteration, construction and design of facility components requiring the application and management of skills in planning, problem-solving, attention to detail, teamwork, communication and adherence to safety.

Current Maintenance Policy

Most of buildings:

Not fully meet their respective obligations as efficiently and effectively as possible, in order to continually deliver both the business and building maintenance objectives required from the contract..

Certain parties know their obligations under the contract and building maintenance policy.

Contract Management Guidance and Procedures are not aligned with the procurement policy and are not integrated with the procurement manual and any other relevant processes.

Regular reporting to only certain parties takes place on contract management performance, issues and opportunities.

Inappropriate systems and processes are in place to capture and report on key data and lessons at a project, category and organizational level.

Not consistently implement the work planning system for maintaining high availability and reliability of important plant structures, systems and components.

Not propose maintenance performance indicators and the framework as a whole;

From a management approach using systems thinking, facility managers did not fully understand how building maintenance knowledge aligns with the core competencies of facility management such as:

Operations and maintenance Real estate Human and environmental factors Planning and project management Leadership and management Finance Quality assessment and innovation Communication Technology

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A number of the interviewees indicated that one of the reasons for not keeping the contractor’s engineers informed about the company is that the relationship between them is temporary.

These problems are related to maintenance group management, performance and execution of management during maintenance.

Effectiveness Level of Implementation Policy

Most of buildings:

Not achieve and maintain internal standards and regulatory compliance Prefer to focus on corrective maintenance events only. Only certain actions intended to ensure that an asset performs a required

function to a specific performance standard(s) over its expected useful life by keeping it in as near as practicable to its original condition.

Only certain aspect of accepted standard or specification of performance, which sets out the skills, knowledge and attitudes, required to operate effectively.

Only certain record management system that not included their maintenance lifecycle and not achieve efficient, transparent and accountability.

Performance management and reporting are only cover to certain information to determine whether performance is in accordance with the entity’s management policies, standards, strategic plans, procedures, objectives and performance targets.

8.0 Conclusion and Recommendations

As for conclusions, the study and research made has led to the achievement of the objectives of the study. It is evident from the findings that the originality of building maintenance policy implemented varies from one building to another. This implies the quality of maintenance is not consistent. There is a need to develop a building maintenance policy based on Malaysian Property Management Standard (Second Edition 2016) which to be enforced legally to ensure comfort and safety to public. In view of the perspective on the maintenance policy practiced in building maintenance management consideration and the maintenance requirements in office high rise buildings, maintenance policy and strategy, strategic management, facility management and performance management as the four key aspects which significant fundamental for management of building maintenance operation processes. Building maintenance policy is the main aspect that influences building maintenance operation processes radically. Moreover, maintenance strategic management and facility management are greatly influenced by the strategic directions from the top management. Therefore, they can determine and value the cost and quality of the building operational processes improvement through performance management. Maintenance activities are no longer an individual activity but depend very much on the maintenance management strategic directions. It has more expectation from the building owner, maintenance professionals, tenants and occupants. The study concludes that a clear most of building

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maintenance management do not implement the existing maintenance policy standard published by Malaysian Property Management Standard (Second Edition 2016).

9.0 References

Adenuga, O. A., Olufowobi, M. B., & Raheem A. A., (2010). Effective Maintenance Policy As A Tool For Sustaining Housing Stock In Downturn Economy. Journal of Building Performance.Volume 1 Issue 1. pp. 93 – 109

Arazi, I., Khamidi M. F., & Lateef O. A., (2009). Value Based Maintenance Management Nodel for University Building in Malaysia – A Critical Review. Journal of Sustainable Development.Volume 2 Number 3. pp. 127-133

CEM. (1994) Maintenance, Technology for Postal Course, Diploma in Surveying, Reading, MA: The College of Estate Management.

Chanter, B., & Swallow, P. (2007).Building Maintenance Management. (2nd ed.). United Kingdom. Blackwell Publishing.

James, O., Lekan, A., Gani. J., Oleyani, T., Joy, P., & Omuh, I. (2016). Assesing The Effectiveness of Maintenance Practices In Public Schools. Journal of Science and Technology. Vol. 3 Number 3. pp. 103 – 109

Lee, H.H.Y. and Scott, D. (2008) Identification of main aspects in the management of building maintenance operation processes. Surveyors Times, Hong Kong Institute of Surveyors, 17 (6): 37–41.

Lee, R. and Wordsworth, P. (2001) Lee's Building Maintenance Management. London: Blackwell Publishing.

Mohamad Ridzuan, Y. & Mohd Najib, I. (2015).Building Maintenance Policy Issues In High Rise Commercial Buildings.The 2nd International Conference on Public Policy & Social Sciences 2015.

Construction Industry Development Board (CIDB) Malaysia (2011). Asset and Facility Management Implementation Manual.

Constitution, F. (2006). Laws of Malaysia Act 757 Strata Management Act 2013. Article, 1–21. Retrieved from http://defensewiki.ibj.org/images/c/cc/Malaysian_Constitution.pdf

Laws of Malaysia Act 663. (2007). Building and Common Property (Maintenance and Management) Act 663, 44.

Government of Malaysia. (2006). Strata Titles Act 1985, (January).

Jabatan Kerja Raya (2014). Garis Panduan Pemeriksaan dan Penilaian Keadaan Bangunan Sedia Ada.

Construction Industry Development Board (CIDB) Malaysia (2012) Standard for the Delivery and Maintenance of Infrastructure using a Gateway System.

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Construction Industry Development Board (CIDB) Malaysia (2011) The Key Perspectives of Asset and Facility Management (AFM) in Malaysia

The Board of Valuers, Appraisers and Estate Agents, Malaysia. Malaysian Property Management Standards.

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EXECUTIVE SUMMARY: PAPER 5

PRESENTER: ASSOC. PROF. DR KARTINAH BINTI AYUPP, UNIMAS

MODEL FOR LEVERAGING GROWTH STRATEGY AND

CORPORATE GOVERNANCE FIT FOR A SUPERIOR

FINANCIAL PERFORMANCE IN THE MALAYSIA

PROPERTY INDUSTRY

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MODEL FOR LEVERAGING GROWTH STRATEGY AND CORPORATE GOVERNANCE FIT FOR A SUPERIOR FINANCIAL PERFORMANCE IN THE MALAYSIA PROPERTY

INDUSTRY

Associate Professor Dr. Kartinah Ayupp (project leader) Dr. Daw Tin Hla

Encik Mohd Waliuddin Mohd Razali

Abstract This study was undertaken to examine the types of growth strategies and corporate governance activities adopted by the property and construction firms listed in the Bursa Malaysia, by using firm’s size and listing age as control variables. Currently there is a lack of studies on how growth strategy and corporate governance activities can be leveraged as a means to achieve superior financial performance. In terms of the scope of the study, this study covers all the construction and property firms listed under the Bursa Malaysia that have full set of data dated from 2000 to 2105.With this in mind, the total number of firms under study are 38 firms from the construction sector, and 76 firms from the property sector. Based on the result of this study, it is generally found that the construction public-listed firms adopted more types and breadth of growth strategies compared to the property firms. Big sized and well-established construction firms are able to set a premium price for their products while maintaining a low-cost structure in comparison to their smaller-sized competitors. Construction sector’s firms focuses more on market penetration, risk management, customer relationship networking and R&D investment on technology such as IBS and green technology in their business processes. On the part of the property sector’s firms, the main growth strategies adopted involve offering customized product/services especially within urban clienteles, mixed use of the buildings, focusing business in a specific geographic location – such as highly populated and developed locations, new township or future planned government infrastructure locales. Just like construction sector, firms in the property sector also adopted related diversification. In terms of corporate governance, construction sector was seen to have less influential effects as compared to the property sectors, while listing age do not have significant influence to the firms in both sectors. Both sectors have numerous important upstream and downstream stakeholders, including private and public agencies; with customers encompassing both B2B and B2C such as commercial and residential clients, designer, contractors, and manufacturers etc. With such fragmented sectors, this can create issues such as lack of coordination and mismatched if not managed properly. In terms of corporate governance aspects, it is found that BoD’s elements such as board diversity, size and composition, do not significantly influence the level of financial performance of the construction firms. While for the property sector, board diversity, composition, role of audit committee and board independency have positive relationship with property firms’ performance. Keyword: Growth Strategy, Corporate Governance, Firm Performance, Malaysian Property Industry

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1. Introduction The property industry encompasses a wide variety of activities including the planning, construction, sales and purchase, and management of property. It is regarded as a high-growth industry with the residential segment constituting the fastest growing and largest segment in the sector. However, with the current fluctuations of the world economy, the Malaysian property industry is facing a new business landscape Thus, this study focuses on the growth strategies and corporate governance activities adopted by the firms within the property and construction sectors listed in the Bursa Malaysia. It examined the simultaneous dependent and mediating effects of the firm’s growth strategies and governance mechanisms towards achieving superior financial performance. This study fills a need for a corporate governance process, that is not just a custodian of a firm’s compliance but also a mechanism that is robust and fluid enough to fit with, and is capable of supporting, business changes demanded by the firm’s strategies. The results shows how the implementation of the governance mechanism can add value to a property firm’s performance and achievement of strategies, taking into account firm’s size, complexity, resources, and other external and internal factors. It is widely recognized that the more dynamic and fast-moving an industry, the more complex are the governance issues. Most of the time, business owners let governance lag behind and only start to act when symptoms of governance problems begin to show such as mismanagement, accounting discrepancies, poor performance, disputes between management over issues of control and accountability, etc. 1.2. Problem statement Despite widespread acknowledgement of the importance of strategy–structure fit, there is still lack of studies to address the similar issues in other aspects of an organization such as corporate governance-business strategies fit, especially within the property industry. Corporate governance is generally viewed as a means to ensure compliance to an industry’s standard. As stated by Monks and Minow (2012), governance is a structure intended to make sure the right questions asked, and that proper checks and balances are in place for the creation of a sustainable value and returns to the company. However, it is time for the governance role to be extended to improving the fit between compliance, business strategies and superior financial performance. Although the principle is not new, actual implementation involves new thinking because of the fluid nature of strategies and the changing business needs. This is especially lacking in a developing country like Malaysia where business success often involves not so much what you know, but who you know & the appointment of directors tend to follow such sentiments. As stated by Korine and Gomez (2014), “with new shareholders came new strategies and with new strategies came new shareholders”. When a firm adds new business to its portfolio, there is a change in the management control span and consequently this will increase the complexity of the firm’s governance process. The more the new business differs from exiting business, the greater the challenge it poses to governance (Anderson, Bates, Bizjack and Lemmon, 2014). But growth is fundamentally important for any firm to safeguard, at the very minimum, its capacity to earn returns and competitive standing in its business environment.

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With the unpredictable nature of the existing business environment, property corporations need to ensure that their business growth strategy is in sync with their corporate governance activities. However, there is a lack of indicator on how to leverage growth strategy and corporate governance activities to fit the firms’ superior financial performance. The problem is compounded by tendency of some financially focused shareholders that seek relatively immediate returns to shareholders rather than long-term gains. Firm performance measures in other researches use mainly ROA, ROE (traditional accounting ratios) and Tobin’Q (market related performance ratio). Traditional ratios indicators rely heavily on past trend and not on the future. There is a need for an indicator of future growth to convey the sustainable profit growth of the property sector. With the current volatile business scenario, property corporations need to ensure their processes are in line with each other and this include the strategies they adopted and governance activities. Thus, it can be seen that there are gaps in the current literature on how to leverage growth strategies-corporate governance fit to achieve superior financial performance. Secondly, how the firms in these two sectors are adapting to the dynamic business environments brought about by the changes from the context of their strategizing and governance practices. With this in mind, this study mainly focuses on the corporate governance, growth strategy and firm superior performance of the property firms for their sustainability in the Malaysian construction and property sectors. 1.3. Research Objectives This project was conducted with the objective to identify how growth strategy and corporate governance are being leveraged for a superior financial performance. Specifically, it aim: O1: To assess the types of growth strategy adopted by the property and construction firms

listed on Bursa Malaysia. O2: To study the sustainability of the property and construction firms by observing their

financial performance in Malaysia. O3: To evaluate the trend of superior financial performance of the property and construction

firms in Malaysia O4: To study the association between growth strategy and superior financial performance of

these firms. O5: To define the impact of corporate governance activities on company’s superior financial

performance. O6: To construct the model for leveraging growth strategy and corporate governance for

superior financial performance of property and construction firms in Malaysia. 2. Literature Review 2.1. Growth Strategies According to Barbero et al. (2012) an effective growth strategy as one that could make use of the organization’s resources and capabilities in order to grab the opportunities posed within its external environment. Thus, for an organization that is competing within an industry that is facing changes and challenges such as the property industry, this means the ability to leverage a correct combination of resources and core competencies so that it can deliver above average returns. However, determining the most appropriate growth strategy to adopt is not an easy task because as an organization grows, the management of growth becomes more complex (Lumpkin and McNamara, 2014; Dess, Lumpkin and McNamara, 2014) Be that as it may, growth

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is crucial for an organization if it is to survive in the very long term. And for a firm to grow successfully, it must be able to ascertain its limitations and strengths and leverage on those areas. Every organizations faces similar challenges when it comes to strategic decision making or which strategic process to pursue to grab the opportunities or to overcome significant problems. These complexities in a way, lend to the robust nature of strategizing and provide a direction to management on the different strategic options or typologies that organizations can pursue (Henry, 2011). There are some major strategies that organizations can adopt in pursuing, such as internal development, strategic alliance, mergers and acquisitions (Thompson et. al., 2014; Hitt, Ireland, and Hoskisson, 2015; Dess, Lumpkin and McNamara, 2014; Jones and Hill, 2013, David, 2015). Internal development strategies are also sometimes refers to as organic growth strategies because an organization builds on its own capabilities in order to grow. Other decisions include whether to integrate horizontally or vertically (Wheelen and Hunger, 2012; David, 2015; and Hill et al., 2014). Vertical integration is an approach where a company expands its business movements on a similar production line, this includes owning or taking over the supply and/or distribution task of the firm’s value chain. (Lin et al. 2017). There are also strategies that posed higher risks but at the same time can bring very high return if managed properly such as diversification strategy. Diversification helps firm to gain market power over rivals, distributers, suppliers and clients (Li and Greenwood, 2004) and thus lower uncertainty in revenue by dividing investment risks over multiple product lines. Taking all together, firm can enjoy economies of scale by utilising synergies among the numerous product lines/categories, (Zahavi and Lavie, 2013). There is some evidence relationship between diversification and financial performance under same industry (related industry). Nobeoka and Cusumano (1997) find positive relationship between diversification and sales due the economies of scope in the sharing of technology. Other researchers such as Tanriverdi and Lee (2008) find negative relationship between diversification and sales as a result of the increased in costs in trying to effectively coordinate the firm’s platforms and product scopes. Recent study made by Zahavi and Lavie (2013) show a U-shape relationship between diversification and sales growth. Furthermore, growth strategy is a continual process that is highly dependent on, and is control by, the type of industry and business in which the company is operating in (Mankins and Steele, 2005). The steps taken to ensure growth success is multi-pronged; ranging from doing analysis of its competitors, establishing objectives and strategies to counter current and potential competitors; to re-evaluating the implemented strategy at a regular interval to monitor its status and level of success. A change in the external environment would also warrant formulating a new strategy to meet this changes or opportunities. Warugu (2001) noted that when strategies formulation and implementation is done effectively it can offer opportunities for the firms to respond accordingly and do improvement within its operating environment. 2.2. Corporate Governance Depending on which practitioners’, researchers’ or theorists’ viewpoints are adopted, corporate governance can be viewed in a narrow or a broad way. The narrow viewpoint looks at corporate governance as being restricted to the relationship between an organization and its shareholders. This way of thinking can be seen in the workings of the agency theory (Larcker, Richardson and

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Tuna, 2007). From a broader perspective, corporate governance is regarded as having a multitude of relationships that encompass not only those between an organization and its shareholders, but also between an organization and its numerous range of stakeholders such as customers, employees, communities, suppliers etc (Koldertsova, 2011). In Malaysia, under the Malaysian Code on Corporate Governance 2012, the purview of corporate governance is not only pertaining to the interests of the shareholders, but also relevant internal and external stakeholders. Notwithstanding the numerous definitions and perspectives, a good corporate governance is crucial to ensure that the contribution of firms to the overall economy can be maximised. Review of previous studies discover the benefits of better governance to the firms in the form of performance improvement, higher access to financing options, reduction in cost of capital, and improvement in the management of all relevant stakeholders (Claessens and Yurtoglu, 2013; Ramli and Ramli (2016) In terms of market valuations, numerous studies have also shown the positive impact of corporate governance (Cheung et al., 2014, Black et al., 2008, Srairi, 2015, Black et al., 2008, Naushad and Abdul Malik,2015, Karolyi, 2012) . Hoever, in terms of the specific aspects of corporate goverance activities, there seems to be a mixed reviews on each actvitive’s contribution to firm perfoamnce. According to Germain, Galy, and Lee (2014) there is a strong linkage between the size and independence of the board, and firm’s operation level. The research by Zabri, Ahmad, and Khaw (2016) also reveal that board size are significantly related to ROA , with weak negative relationship to ROE, while board independence is found to be irrelevant to firm performance. A study by Ghazali (2010), uses profit maximization instead of the e prevalent way of using ROA, ROE, or Tobin’s Q to represent performance of firms. A study by Nik (2002) show that only the directors’ professional accounting qualification have inverse relationship to the total revenues while the others board attributes like directors, CEO or chairman demographics do not influence on the overall performance of firms. Meanwhile, Bauer, Frijns, Otten, and Tourani-Rad (2008) shows that, although well-governed firms lead to higher stock price, only certain governance categories affect the corporate performance, namely activities pertaining to financial disclosure, remuneration and shareholder rights, while there is limited impact shown from the provisions of board accountability, market control, and corporate behaviour. While a study by Gupta and Sharma (2014) that include parameters such as board structure, board constitution, conflict of interest, committee compositions, independent directors, and disclosure of information, found only partial link between corporate governance, firm’s shares prices and financial performance. Meanwhile, the studies on listed firms in Sri Lanka provide evidence that board size and composition of non-executive directors are negatively related to firm value, while the firm size and director shareholdings have a substantial influence on firm performance as measured from Tobin Q (Guo & Udaya, 2012). 2.3. Literature Review on Superior Firm Performance Traditionally, many researchers used the profitability of the firm as a measure of firm performance. Armstrong and Taylor (2014, p.336) defines profitability as the “measure of the return in the shape of profits that shareholders obtain for their investment in the company”. The objectives of having profits are to cover the cost of the business to sustain businesses’ survivability and to ensure the success of a business. Superior financial performance measures such as growth of income, cash value added (CVA), market value added (MVA) and economic value added (EVA) are mechanisms that are a better fit to reflect the effectiveness of a growth

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strategy. Cash value-added highlight the management ability to manage cash asset of business; market value-added (MVA) is a proxy for the achievement of firm performance in the market; while economic value-added represent the achievement of firm’s performance internally for a successful business. For this study, the metrics proposed to embody firm performance are economic value added (EVA) and market value added (MVA). EVA and MVA have become important management tools for many corporations to measure the firm’s true economic profit; and to be in-line with shareholder value maximization (Uyemura, Kantor and Pettit, 1996, grant, 1994, Stewart, 1994, O’Byrne, 1996, 1997). The presence of a positive EVA would indicate that the management has created value. Conversely, when there is a negative EVA it shows that the management has ruined value. EVA have numerous purposes which includes the development of organizational targets, compensation plans, capital budgeting goals, and corporate valuation. Moreover, among the most critical functions of EVA is to ensure alignment between shareholders’ interests and management by tying executive compensation to the creation of shareholder value (Stewart & Chew, 1995, Birchard, 1994, Dodd & Johns, 1999, Blair, 1997, Wallace, 1997, Ehrbar, 1999, Baum, Sarver & Strickland, 2004). Thus, it could be seen that EVA directly tackles two important issues which are, agency theory and capital scarcity theory. MVA is an extension of EVA as its value is equivalent to the current/present value of the future streams of EVAs. MVA plays a role by comparing the value of what shareholders put into the firm and what this input is currently worth. An indication of value being created and a positive MVA is when the value of the management’s actions and investments is higher than the value of the capital given to the firm by shareholders. This study use EVA and MVA to proxy for superior firm performance as it is not implacable to measure one firm is more superior profit than another firm as their organisational structure may be different which can impact differently on their profitability. Therefore, individual firm’s EVA and MVA are used to proxy for the superior firm performance of the firms over some years’ data for each firms. With this in mind, the dependent variables in this study are firm performance which is indicated as economic value added (EVA) and market value added (MVA). As in prior diversification studies (Delios & Beamish, 1999; Hitt, Hoskisson, & Kim, 1997; Tallman & Li, 1996) this study identify firm profitability using the accounting-based measure, return on assets (ROA). Although the use of accounting-based measurement for firm's profitability have been critiqued (Aaker & Jacobson, 1987), there is sufficient validation for their adoption (Hoskisson, Hitt, Johnson, & Moesel, 1993). It has been shown that external analysts and managers regularly use ROA or return on sales (ROS) as a means to measure management effectiveness, and they are typically linked to various other measurement of profitability (Robins & Wiersema, 2003). Additionally, stock prices fluctuations tend to be influenced by the announcement of figures depicted within ROA or ROS, which would indicate their significance in signalling the performance of firms (Fama & Miller, 1983). Within the field of firm’s diversification, Tobin’s Q has been frequently adopted to measure organization performance especially in measuring firm value. (Bharadwaj, Bharadwaj, & Konsynski, 1999; Hitt, Wu, & Zhou, 2002; Tam, 1998). As a market-based measurement for firm’s performance, Tobin’s Q is forward-looking and risk-adjusted. Notwithstanding the above, the most important factor in using Tobin’s Q is that it monitors both the long-term performance as well as the value of the intangible assets that a firm

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owns (Bharadwaj, Bharadwaj, & Konsynski, 1999). In summary, majority of the prior researches shows compelling evidence attesting to the robustness and soundness of a good corporate governance, in addition to growth strategies in predicting firm performance. With this in mind, the following hypothesis were developed: Hypothesis 1: Growth strategy of a firm in the previous year can stimulate the growth strategy in the current year. Hypothesis 2: Growth strategy of a firm have a positive impact on the superior firm performance Hypothesis 3: Firm’s superior performance is positively related to its level of corporate governance. Hypothesis 4: Firm size and superior firm performance are positively associated Hypothesis 5: Firm age of listing can improve superior firm performance 3. Research Methodology 3.1. Development of Research Models This research method involves the use of secondary data such as the examination of the annual reports and relevant information from the Bursa Malaysia. It seeks to construct the model for leveraging growth strategy and corporate governance fit for superior firm financial performance by using quantitative research method. Two paradigms of the research, growth strategies and superior firm financial performance are structured as a framework of the research design. It is essential to change from cross sectional models and move towards a model that capture the inter-temporal behaviour of firm’s profitability. Mueller (1986) was the first to recommend that the autoregressive properties of firm-level profit time series reflect whether, and how fast, abnormal profits converge upon normal long-run levels. The common approach is to estimate the following first-order autoregressive base line model are applied for the growth strategies, corporate governance activities and superior financial performance models as follow:

ititti egrsgrs 100 * -------------------------(Eq. 1)

ititti ecgacga 100 * -------------------------(Eq. 2)

itittiesprofsprof 100 *

-----------------------(Eq. 3)

Where: grs is growth strategy, cga stands for corporate governance activities, total number of years which a firm has been up to year 2015 that is denoted as fage and sprofit, is firm i's normalized superior profit rate, at time t of firm i; 'normalised' being realised profitability less

an indicator of normal profits. The 0 parameter or the persistence parameter-indicates the

rate at which abnormal profits converge upon long-run levels. An estimate that is not significantly different from one indicates that abnormal profits persist indefinitely. More

generally, the higher 0 is, the more persistent abnormal profit outcomes. The 0 parameter

indicates the level upon which profits converge in the long run. An estimate that is significantly greater than zero indicates that firms earn relatively high long-run profits. Therefore, higher

values of 0 also indicate greater profit persistence of the firms. The following model (Eq.4) n

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is in order to determine whether firm growth strategy and corporate governance (and other proposed covariates) influence the convergence-of-returns process in a systematic way:

Based line model of the research:

)4.(***

*

114113112

111141312110

Eqesproffagebsprofsizebsprofcgab

sprofgrsbfageasizeacgaagrsaasprof

ititititititit

ititititititit

where sprofit-1 is the one-period lag of the superior firm performance of firm i relative to its corresponding industry (Property sector), grsit-1 and sizeit-1 are similar measures of relative growth strategy and relative firm size, and. Our superior financial performance hypothesis

predicts positive estimates for both andb . This model examines the path of convergence

followed by all abnormal profit outcomes. To be more specific about the effects of relative growth strategies (denoted as cgs) and corporate governance activities (cga) on the persistence of superior profit outcomes, we estimate a model, using only those observations for which one year lag of the explanatory variables. The autoregressive profit models assume that period-to- period changes in firm profitability are gradual, or incremental. However, current theorising also embraces the more dramatic types of change associated with Schumpeter’s process of creative destruction (Amit and Schoemaker,1993; Rumelt, 1987). This interest in more discontinuous profitability changes suggest that we use an approach of explicitly models the timing of discrete performance events. In light of this, we employ a complementary event history approach to modelling sustained superior performance. This approach requires that financial performance be recast as a categorical (i.e., superior versus below-average) variable. Moreover, it assumes that firms are concerned with increasing the length of time spent in superior firm performance position as an outcome of growth strategy and corporate governance. Event history analysis relates the probability of an event occurring at a point in time (i.e., movement from superior to below-average performance) to some set of accounting measures of profitability as absolute performance measures. However, the autoregressive approach assesses the dynamic properties of normalized profit time series, whereas the event history requires that we distinguish superior from below-average performance outcomes. In this analysis, we use industry-average return on assets (ROA) as an indicator of normal returns (all other explanatory variables are also normalized to the corresponding industry averages). The results from the autoregressive models are discussed firstly by using the model 1, 2 and 3 (Eq. 1 – 3). In Model 1, the estimated constant term is not significantly different from zero, while the β estimate is significantly less than one. These results are consistent with the findings of previous persistent profitability research, as they suggest that abnormal profits do eventually converge upon normal long-run levels (Roberts and Dowling, 2002). Model 4 (Eq.4) incorporates the explanatory variables and their respective interactions with the superior financial performance as sprof lag variable. The significant coefficients on the reputation variables suggest that high-reputation is associated with a larger intercept term and a greater persistence parameter. These findings support our firm’s reputation hypothesis – firms with better growth strategy and corporate governance activities tend to demonstrate greater profit persistence. Models 3 and 4 demonstrate how the results change when we consider only the persistence of superior profit outcomes. In Model 3, the persistence of abnormally high profits is somewhat greater than in the overall model. The results from Model 4 suggest that firms with relatively good growth strategy and corporate governance activities experience a

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significantly greater degree of profit persistence, a finding that once again supports the hypotheses. Model 4 is classified to indicate the three different superior firm performance measures: Model 4A: Growth strategy, corporate governance and superior firm performance with EVA.

)4.(***

*

114113112

111141312110

aEqesproffagebsprofsizebsprofcgab

sprofgrsbfageasizeacgaagrsaaEVA

ititititititit

ititititititit

Model 4B: Growth strategy, corporate governance and superior firm performance with MVA.

)4.(***

*

114113112

111141312110

bEqesproffagebsprofsizebsprofcgab

sprofgrsbfageasizeacgaagrsaaMVA

ititititititit

ititititititit

Model 4C: Growth strategy, corporate governance and superior firm performance with Tobin’s Q

)4.(***

*'

114113112

111141312110

cEqesproffagebsprofsizebsprofcgab

sprofgrsbfageasizeacgaagrsaaQTobin

ititititititit

ititititititit

3.2. Measuring Dependent and Independent Variables 3.2.1. Measuring Superior Firm’s Performance Market value added (MVA) was used together with other variables such as firm size, firm age, board size, growth opportunity, return on asset, return on equity, corporate governance and growth strategies:

𝑀𝑉𝐴𝑖𝑡 = 𝑎0 + 𝑎1𝑔𝑟𝑠𝑖𝑡−1 + 𝑎2𝑐𝑔𝑎𝑖𝑡−1 + 𝑎3𝑠𝑖𝑧𝑒𝑖𝑡−1 + 𝑎4𝑓𝑎𝑔𝑒𝑖𝑡−1 + 𝑏1𝑔𝑟𝑠𝑖𝑡−1 ∗ 𝑠𝑝𝑟𝑜𝑓𝑖𝑡−1 + 𝑏2𝑐𝑔𝑎𝑖𝑡−1 ∗ 𝑠𝑝𝑟𝑜𝑓𝑖𝑡−1 + 𝑏3𝑠𝑖𝑧𝑒𝑖𝑡−1 ∗ 𝑠𝑝𝑟𝑜𝑓𝑖𝑡−1 + 𝑏4𝑓𝑎𝑔𝑒𝑖𝑡−1 ∗ 𝑠𝑝𝑟𝑜𝑓𝑖𝑡−1 + 𝑒𝑖𝑡

Tobin’s Q is frequently used to measure the firm performance with market-based aspect. Thus, in this research, Tobin’s Q is used as a proxy for superior firm performance. Tobin’s Q ratio used as a proxy for market based measure is defined as the market value of equity divided by replacement cost. Hu and lzumida (2008) argued that Tobin’s Q ratio measures the effectiveness with which firm management is capable of using its assets to create value for the shareholders. It is market based measures such as Tobin’s Q is calculated differently by different authors. For example, prior researcher calculated Tobin’s Q by dividing the market value by replacement cost. However, Booth and Deli (1996) calculated the same ration by dividing the market value of equity divided by the total assets. Tobin’s Q larger than one is considered to be utilising scare resources effectively. In contrast, those with Tobin’s Q less than one are judged to be poorly exploiting their resources (Filatotchev & Jackson 2013).

)(

)('

ValueBooksLiabilitieValueBookEquity

ValueBooksLiabilitieValueMarketEquitysQTobin

Weighted Average Cost of Capital - WACC' Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is proportionately weighted. All sources of capital, including common

86

stock, preferred stock, bonds and any other long-term debt, are included in a WACC calculation. A firm’s WACC increases as the beta and rate of return on equity increase, as an increase in WACC denotes a decrease in valuation and an increase in risk. The method for calculating WACC can be expressed in the following formula:

)1(**Re* TcRdV

D

V

EWACC

Where: WACC is weighted average cost of capital; Re = cost of equity; Rd = cost of debt E = market value of the firm's equity; D = market value of the firm's debt; V = E + D = total market value of the firm’s financing (equity and debt); E/V = percentage of financing that is equity; D/V = percentage of financing that is debt; Tc =corporate tax rate Cost of Equity and Cost of Debt The cost of equity is the return a company requires to decide if an investment meets capital return requirements; it is often used as a capital budgeting threshold for required rate of return. A firm's cost of equity represents the compensation the market demands in exchange for owning the asset and bearing the risk of ownership. The traditional formulas for cost of equity (COE) are the dividend capitalization model and the capital asset pricing model.

DividendsofRateGrowthStockofValueMarketCurrent

ShareperDividendsEquityofCost

Furthermore, this study also looks at firms’ cost of debt and how it is factored into the firm’s performance measurement. Measuring Dividend Growth Rate The dividend growth rate is the annualized percentage rate of growth that a particular stock's dividend undergoes over a period of time. The dividend growth rate is necessary for using the dividend discount model, which is a security pricing model that assumes a stock's price is determined by the estimated future dividends, discounted by the excess of internal growth over the company's estimated dividend growth rate. A history of strong dividend growth could mean future dividend growth is likely, which can signal long-term profitability for a given company. 3.2.2 Measuring Business Growth Strategies at Company Level Measurement of the attributes of firm’s business growth strategy is done through content analysis or disclosure analysis. The source of this secondary data is obtained from the annual report of the firms in both the construction and property sectors. Level of growth strategy is treated as one of the independent variable and thus the measurement will take into account this factor. To determine the measurement attributes of the growth strategies, their different types and corresponding levels, five categories of strategies are being applied which are [1] Market penetration strategy; [2] Market development strategy; [3] Product/service development strategy; [4] Diversification strategy: vertical integration; [5] Mergers, acquisition, joint ventures: horizontal integration. Construction and property firms generally disclose these strategies in their financial reports under the category of non-financial information such as within the Chairman

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Message or speech; company’s prospective and notes to the financial statements. Each type of business strategy used in a business is defined by the key performance indicators, and the key performance indicators are determined and set up as queries to run content analysis by using QSR Nvivo 10 software. The qualitative analysis software is used to accomplish the content analysis or disclosure analysis. Growth strategy level of one firm for one year is computed as the following statistical model (Eq:5).

N

GSGRSL

N

it

it

1

)(---------------------- -(Eq. 5)

Where, GRSLit is denoted as growth strategy level of a firm at time t period; N is total number of key indicators for the growth strategies. GSit is each relevance scores of disclosure or content regarding growth strategy. The average relevance scores of the following 24 key words (check list) related to the measures of business growth strategy practices are computed for one company by using above equation 5. The total number of key words in the check list N is twenty-four. 3.2.3 Measuring Corporate Governance Practice Similar to growth strategies measurement, corporate governance is measured through content analysis from the listed firm’s annual reports and analysed using the Nivivo qualitative analysis software. The key words are based on the Malaysia Code of Corporate Governance Guidelines and these words represent the code of corporate governance practice. Total annual reports amounting to 416 of firm year observations from the construction sector and 1327 from the property sector are posted separately into the Nivivo software to run content analysis by using the determined key works. The following statistical equation is used to calculate the code of corporate governance compliance scores for each firm year observation for both sectors (construction and property):

Q

CCGCCG

Q

it

it

1

)(---------------------- (Eq. 3.2)

Where, CCGit is code of corporate governance compliance score of a firm for a year. Q is total number of queries runs for each and every company. 3.3. Data Sampling and Collection The focus of the study is on the construction and property listed firms in the Bursa Malaysia. The total number of firms used for this study are 126 public-listed firms. They are 43 firms belonging to the construction sector, and 83 coming from the property sector listed under the Kuala Lumpur Stock Exchange/ Bursa Malaysia. Based on the above list, their respective annual reports were collected from the Bursa Malaysia, and data was tabulated from the year 2000 to 2015. Financial ratios and stock prices are collected from Thomson Data stream and Yahoo finance. In order to ensure the validity and reliability of the data collected, those firms that do not have complete data are excluded from the study. Thus, although there is a total of 126 public-listed firms within these two sectors, only 114 were included in the study. The other 12 firms were removed from the sample because of incomplete data. This action was taken as their inclusion will cause an unbalanced panel data. With this in mind, the total number of firms that have full

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set of data from the construction sector stands at 38, while for the property sector there are 76 firms. In terms of the time horizon, the annual reports being examined are from year 2000 to 2015; making it a 16-years coverage. On 1st October 2007, the Securities Commission of Malaysia have launched an improved version of the Corporate Governance code. This new code has a revision in some sections to ensure some better best practices within the governance of the Malaysian public-listed firms. Due to this, year 2008 is chosen to explore the performance of firms after the revised code is launched. 4. Data Tabulation The time observation for each of these firms are 16 years, which is from year 2000 to 2015. Since the total number of firms are larger than the total number of years for the both sectors, the panel regression is deemed the most appropriate for this research. In this case, two data sets comprising of the construction and property datasets are constructed separately to ensure accurate analysis of the data. The construction sector’s data set includes 38 firms and 16 years for each observation for 10 variables. This resulted in 608 total number of observations, with the number of groups constituting 38 for the whole construction sector. For the property sector, the total number of observations is 1216 with the number of firms standing at 76. Furthermore, a comprehensive reliability and validity tests were conducted to ensure the best methodology is being adopted for this study. Panel regression analysis in the form of pooled regression, random effect and fixed effect were conducted in order to identify the most appropriate regression analysis technique. Consequently, random effect is found to be the most appropriate and subsequent analysis was conducted. Normality test was done to determine whether a data set is normally distributed. Multicollinearity test indicate that the VIF’s mean is less than 10 for both construction and property sector, indicating no problem of multicollinearity effect in the model. The heteroscedasticity results also shown a gof fit witht chi-square probability value of 0.0000 is less than 0.01 (1%) for both construction and property sector. To further test the fit of the model, testing such as Hausman, Breusch and Pagan LM test were also conducted. For diagnostic on autocorrelation problem, Wooldridge test is run in panel data. All the above test has shown the strength of the research design and analysis being adopted for the study. 5. Data Analysis 5.1. Random Effect Panel Regression Model Analysis (Construction Sector) Table 1 below shows the Random Effect Panel Regression Model Analysis. The variables included in the model, which are based on overall sample of the construction companies, explained 29% of the variance of the superior firm performance. R2 of within is 15% which means that the 15% explain the superior firm performance by one company variables. The between in R2 is 39%, it indicates that the variables were able to explain towards 39% of the superior firm performance. Table 1 also reveals that the growth strategies of a business variables have negative relationship with superior firm performance at 1% significant level (p-value = 0.00 < 0.05). In contrast, board size is significantly positive to superior firm performance at 1% significant level. This shows that the larger the board size, the more effective it is in improving the firm performance. Therefore, random effect panel regression model is appropriate for this

89

study. The value of Chi square is 123.69 and probability is less than 1%. Rho is 45%, there is a variation in the superior firm performance among the firms.

In terms of the variables being studied, the Random Effect Model shows that corporate governance practice does not significantly influence the market value added or superior firm performance in this sector. The whole model of leveraging growth strategy and corporate governance has significant negative effect on market value added (superior firm performance) at less than 1% significant level (p value is less than 1). Therefore, the construction firms’ growth strategy needs to be reviewed in terms of its choice of emphasis or combination of strategies in order to increase its effectiveness in contributing towards superior financial performance. Table 1: Random Effect Panel Regression Model Analysis

Random-effects GLS regression Number of obs = 608

Group variable: comp Number of groups = 38

R-sq: within = 0.1500 Obs per group: min = 16

between = 0.3916 avg = 16.0

overall = 0.2920 max = 16

Wald chi2(9) = 123.69

corr(u_i, X) = 0 (assumed) Prob > chi2 = 0.0000

------------------------------------------------------------------------------

mva | Coef. Std. Err. z P>|z| [95% Conf. Interval]

-------------+----------------------------------------------------------------

fs | -.0071105 .0037686 -1.89 0.059 -.0144969 .0002759

fa | -.0003392 .002721 -0.12 0.901 -.0056723 .0049939

bs | -.0101475 .007803 -1.30 0.193 -.0254411 .0051461

mv | .0231448*** .0023723 9.76 0.000 .0184952 .0277945

rev | .0004428 .0024352 0.18 0.856 -.0043301 .0052158

roa | -.0238284 .0162275 -1.47 0.142 -.0556337 .007977

roe | -.0710693 .2029924 -0.35 0.726 -.4689271 .3267885

corg | .0001221 .000269 0.45 0.650 -.0004051 .0006492

grows | -.0035474** .0014256 -2.49 0.013 -.0063415 -.0007533

_cons | 4.237864 .6102025 6.95 0.000 3.041889 5.433838

-------------+----------------------------------------------------------------

sigma_u | .01287665

sigma_e | .01416173

rho | .45257906 (fraction of variance due to u_i)

------------------------------------------------------------------------------

NOTES: MVA = superior firm performance (Market value added), size = firm size, bs = board size, fage = number of year for being a listed company, rev = revenue growth opportunity, roa = return on assets, roe = return on equity, corg = corporate governance growth, grows = growth strategies practices by firm. . *** significant at 1%; ** significant at 5%.

The forecasted model of the leveraging can be explained as follows:

𝑀𝑉𝐴𝑖𝑡 = 𝑎0 + 𝑎1𝑔𝑟𝑠𝑖𝑡−1 + 𝑎2𝑐𝑔𝑎𝑖𝑡−1 + 𝑎3𝑠𝑖𝑧𝑒𝑖𝑡−1 + 𝑎4𝑓𝑎𝑔𝑒𝑖𝑡−1 + 𝑏1𝑔𝑟𝑠𝑖𝑡−1 ∗ 𝑠𝑝𝑟𝑜𝑓𝑖𝑡−1 + 𝑏2𝑐𝑔𝑎𝑖𝑡−1 ∗ 𝑠𝑝𝑟𝑜𝑓𝑖𝑡−1 + 𝑏3𝑠𝑖𝑧𝑒𝑖𝑡−1 ∗ 𝑠𝑝𝑟𝑜𝑓𝑖𝑡−1 + 𝑏4𝑓𝑎𝑔𝑒𝑖𝑡−1 ∗ 𝑠𝑝𝑟𝑜𝑓𝑖𝑡−1 + 𝑒𝑖𝑡

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5.2 Random Effect Panel Regression Model Analysis (Property Sector) In Random Effect Panel Regression Model Analysis (as shown in Table 2), the variables included in the model explained 29% of the variance of superior firm performance. This is shown by the overall R-square. R2 of within is 34%, the between in R2 is 27%. This indicates that the variables among the company were able to be explained 27% towards superior firm performance. Based on table 5.6, it is reveals that the growth strategies have negative relationship with superior firm performance at 1% significant level (p-value = 0.00 < 0.05). In contrast, Fs is significantly positive to superior firm performance at 1% significant level. This shows that the larger the board size, the better is the firm’s performance. Therefore, random effect panel regression model is appropriate than fixed effect model.

Table 2: Random Effect Modal (Property Sector) Random-effects GLS regression Number of obs = 1216

Group variable: comn Number of groups = 76

R-sq: within = 0.345 Obs per group: min = 16

between = 0.267

overall = 0.291

Wald chi2(8) = 41.85

corr(u_i, X) = 0 (assumed) Prob > chi2 = 0.0000

mva Coef. Std. Err. z P>z [95% Conf. Interval]

fs -.0077*** .0014629 -5.24 0.000 -.0105288 -.0047945

fa -.0001* .0000624 -1.83 0.068 -.0002362 8.28e-06

bs .0001105 .0002573 0.43 0.667 -.0003937 .0006148

rev .00342*** .0012312 2.78 0.005 .0010157 .0058418

roa .03140 .0853751 0.37 0.713 -.1359232 .198741

roe -2.2518 3.408763 -0.66 0.509 -8.932858 4.429246

corg -.00021** .0001042 -1.98 0.048 -.0004102 0.00000

grows . 002008* . 0010367 1.94 0.053 .0000236 .0040402

cons 10.75013 10.19538 1.05 0.292 -9.232456 30.73272

sigma_u .01070717

sigma_e .01129646

rho .47323789 (fraction of variance due to u_i)

NOTES: MVA = superior firm performance (Market value added), size = firm size, bs = board size, fage = number

of year for being a listed company, rev = revenue growth opportunity, roa = return on assets, roe = return on equity, corg = corporate governance growth, grows = growth strategies practices by firm. . *** significant at 1%; ** significant at 5%.

Table above shows the leveraging model of growth strategy and corporate governance toward superior firm performance. The forecasted model of the leveraging can be explained as follows:

𝑀𝑉𝐴𝑖𝑡 = 𝑎0 + 𝑎1𝑔𝑟𝑠𝑖𝑡−1 + 𝑎2𝑐𝑔𝑎𝑖𝑡−1 + 𝑎3𝑠𝑖𝑧𝑒𝑖𝑡−1 + 𝑎4𝑓𝑎𝑔𝑒𝑖𝑡−1 + 𝑏1𝑔𝑟𝑠𝑖𝑡−1 ∗ 𝑠𝑝𝑟𝑜𝑓𝑖𝑡−1 + 𝑏2𝑐𝑔𝑎𝑖𝑡−1 ∗ 𝑠𝑝𝑟𝑜𝑓𝑖𝑡−1 + 𝑏3𝑠𝑖𝑧𝑒𝑖𝑡−1 ∗ 𝑠𝑝𝑟𝑜𝑓𝑖𝑡−1 + 𝑏4𝑓𝑎𝑔𝑒𝑖𝑡−1 ∗ 𝑠𝑝𝑟𝑜𝑓𝑖𝑡−1 + 𝑒𝑖𝑡

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6. Hypotheses Testing Results 6.1. H1: Growth strategy of a firm in the previous year can stimulate the growth strategy

in the current year. It found that firm’s growth strategy from the previous year have a positive stimulus towards its current year’s growth strategy, thus hypotheses 1 is accepted. That is, firms in both sectors tend to gain better performance by focusing their efforts on extracting value from its current strategies than on developing or finding new sources of values. Both sectors adopt growth strategies for business expansion, although the type of strategizing focus differs slightly. Construction public-listed firms are highly focused towards customer relationship and finding new markets, research and development, risk management, exploring diverse sales opportunities and using new and high technology processes such as IBS etc. The property sector, on the other hand, exercised less diversity on the type of growth strategies with focus on exploring new market, R&D and high emphasis on aspects of risk management. Notwithstanding the above, both sectors shows that there is a positive impact when it comes to the effect of their previous strategic actions towards future financial performance. This indicate that the sectors do not suffer from ‘strategic drift’, but rather they show a commitment in implementing their planned strategies through to it natural phase. This positive outcome seen from adhering to the systematically-planned growth strategies is in-line with what scholars’ terms as the effect of organizational learning and higher learning curve. That is, a systematically planned resource-based view of strategic plan will lead to firms’ capabilities to improve its effectiveness and increase their capabilities in terms of knowledge assets. This translate to increased ability to capture and extract the value as the strategies progresses. This study shows that effective growth strategies need a shared ambition and cooperation of all the people in the organization, and this takes time to gain momentum. As stated by Kululanga (2009), Thanurjan and Seneviratne (2009), and Escobar (2005), as firm progresses in its strategic implementation, there is greater synergistic capabilities achieved as a result of a more developed knowledge and competences on what works best for the firm. This synergistic factor is especially important in property and construction firms as both are operating in a complex and dynamic business environment with fragmented value chain and diverse stakeholders at various phases of the chain. This include stages and functions such as as planning, design, construction, sales, and maintenance. The stakeholders are from both upstream and downstream, encompassing the public and public sector, while from both B2B and B2C such as commercial and residential, clients, designer, contractor, and manufacturer etc. As can be expected from any fragmented sectors such as these, it can generate numerous problems such as lack of coordination and mismatched if not managed properly. Thus, by having growth strategies that focuses on the long-term perspectives, these strategies crate synergies - one that balances the needs for innovative practices and the relationship between price and expenditures. 6.2. H2: Growth strategy of a firm positively impact on the superior firm performance The research findings show that the growth strategy adopted by both sectors have a positive impact towards the firms’ MVA performance, and thus hypotheses two is accepted for both the sectors. For the construction sector which have traditionally been known as a labour-intensive sector with large number of unskilled, semi-skilled and skilled people, their growth strategies have shifted to ones that make use of better adoption of technology such as IBS, related

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diversification and new marketing channel. As for property sector, although traditionally it is relatively conservative compared to construction due to its low level of automation, this has changed in the past decade as the sector been experiencing disruptive technology due to the advent of digital revolution, green technology and more sophisticated customer base and changing needs. Both sectors demonstrated a range or portfolio of growth strategies that balances the relationship between financial returns that can be expected from a portfolio and the riskiness of the portfolio. Firms that demonstrated superior financial returns are those that seems to be able to improve the level of risk relative to return, by diversifying their portfolios. The key to these firms’ diversification is to choose investments whose prices and processes are not strongly correlated. Firstly, investing technological process, new market segments, geographical regions and classes of projects to improve diversification. Below are the growth strategies’ focus emphasis by the two sectors: Figure 1: Growth Strategies Adopted by the Construction Sector

Construction companies are categorized by a project-based structure and by a relationship with numerous third parties such as subcontractors, suppliers, government, clients etc. Thus, the resources and relevant capabilities play an important role in sector’s success. For these public-listed firms, the crucial assets for high performance covers both tangible and intangible asset. This are namely, financial resources, technical competences, and the quality of its human resources especially those related to technical knowledge on-sites. The firm’s connection and image in the industry, research and development know-hows, quality of customer relationship, and innovation tendencies are the four means of product differentiation in the construction. This include doing both forward and backward integration into the various value chain encompassing a range of project management methods, extending into design, financial packaging, and commissioning, facilities management, etc. This include eentry into new type of construction projects, implementation of new method in construction process, maintaining close relationship

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with local government, establishment of close relationships with other GLCs and training of manpower. Figure 2 : Growth Strategies Adopted by the Property Sector

In the case of property sector, the firms seem to emphasis related and focussed growth strategy that take the form of a combination of resource differentiation and cost leadership strategy. For superior financial performance, the main growth strategies adopted involve offering customized product/services especially within urban clienteles, mixed use of the buildings, focusing business in a specific geographic location – this normally pertains to highly developed locations with dense population, new township or future planned government infrastructure locales. Just like construction sector, firms in the property sector also adopted related diversification. Many of these high-performance firms focus on full service range, ranging from consulting, marketing, legal services, project management or design as their main services and sub-contracting other non-core critical business to other companies. Those that have superior MVA shown that their talent lies in strong marketing investments, corporate reputation for quality or technological leadership, and unique combination of skills drawn from other related upstream and downstream businesses. For those that do not subscribed to related diversification, their growth strategy is angled towards developing a strong cooperation from the channel. 6.3. H3: Firm’s superior performance is positively related to its level of corporate governance. For hypotheses 3, the null hypotheses cannot be rejected for the construction sector, while for the property sector the findings show that their firms’ superior financial performance is positively related to the level of corporate governance adopted. In the case of the construction sector, the relationship between governance structure and firm performance are strongly affected by the fragmented and complex nature of the industry, even if the ‘right’ composition, size and diversity of the board have been exercised. Thus, there is a need to examine the relationship of the board influence on the firm’s performance in relation to the key elements of a firm’s operating environment, such as socio-economic policies, governmental influence, law and regulations. In addition to the tightening of the interest rate and poor economic conditions, in terms of regulatory requirements, construction have a higher number of regulations to abide compared to the

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Property Sector Growth Strategies

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property sector. Operational-wise, the complexity of the governing bodies also adds to the complexity of the governing aspect in this industry. Firstly, to be a contractor and be given a construction project, a firm is required to register with numerous bodies starting from CIDB, SPKK, STB. Furthermore, other agencies such as TNB, Telekom, JKR, Petronas, SPAN etc also will be needed to be included in the regulatory frameworks if the firms want to participate in procurement activities of these respective agencies. In addition to these, there are various other regulatory procedures that have to be followed as the construction firms began to embark in pre-construction and up to post-construction works. These regulations relate to local authorities, municipal council and other GLCs for permits, authority-granting procedures etc. Given the numerous regulatory bodies, this can lead to process cost and sometimes delays in the commencement of projects as problems in documentation can hold up construction works either related to off-sites, on-site and also manpower issues especially pertaining to foreign workers, Sometimes the delays in getting these approvals have resulted in contractors losing opportunities to secure projects leading to lost in revenues. Thus, it is found that in terms of BoD’s elements such as board diversity, size and composition, these do not significantly influence the level of financial performance of the firms. Thus, it can be concluded that corporate governance variables are perceived as the weak link in the firms’ performance. However, for the property sector, board diversity, composition, role of audit committee and board independency have positive relationship with property firms’ performance. For this sector, board composition is an important mechanism of board structure. This point to the executive and non-executive directors’ roles and the application of the agency theory and stewardship theory in ensuring impartiality of the board. Using panel data regression, it is also found that board size and CEO/Chairman duality has significant relationship with firm performance. Risk management committee has also been found to play a role in firm performance in its capacity to identify, prioritize and oversee economic risks, in addition to its internal audit review. This is because as the project progresses the property developer will be facing higher risk because of reduced flexibility and the complexity of work and investments are increasing. Most of these projects will take very long time to complete with stakeholders consisting of landowners, developers, government agencies, financial institutions, building contractors, agents and the professional team (comprising of planning consultants, accountants, lawyers, engineers, architects, planning consultants, project managers etc.). While the success or failure of a property development project is often influenced by market conditions, the role of proper auditing and monitoring play an important a crucial role too. For the property sector, given the diverse upstream and downstream operations, these firms need strong board members to observe and regulate the administration and investment activities of the property firms to ensure superior financial performance. 6.4. H4: Firm size and superior firm performance are positively associated. This hypothesis has been proven to be correct in the case of both the sectors and thus the hypotheses is accepted. This is because large size public listed firms have the ability to carry out their stakeholders’ needs is tightly related to capital structure. Furthermore, the firm’s size highly influences the type of relationship the firm enjoys within and outside it business environment. That is, the larger the firm, the more influence it can exert on its stakeholders. Most importantly, these firms were normally able to prove ability to carry out, and thus secure big

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investments projects such as large or very large residential and mixed-use development projects. The Construction Industry Development Board Malaysia (CIDB) publications have also shown that since the 1970s many large-sized Malaysia contractors and developers have been expanding their business to global markets too. For both these sectors, although agility have its benefits, the need for a strong and stable capital structure is the determinant factors for ability to capture new opportunities and thus gain, superior financial performance. This is in-line with Hart (2000) and Markman and Gartner (2002)’s works where it is indicated that firm will grow until they reach the scale where they can fully utilize the economies of scales. Large sized firms were also shown to devote strategies to systematically manage their human capital, reputation, image and the focus on technology in their processes and seeking new materials in constructions/operations. This is especially true for the construction firms as the use of better and new materials will lead to higher productivity. Ability to invest in R&D have enabled both sectors to create technological diffusion leading to less labour-intensive operations, thus increasing productivity. 6.5. H5: Firm age of listing can improve superior firm performance. The hypotheses 5 for both sectors is rejected as findings have shown that the duration of firm listing do not significantly influence superior firm’s performance. Getting access to large projects requires scale and in the absence of which it is hard to break in large projects regulated by international standards. The failure to build effective mechanisms for ensuring credibility, rather than age of listing also will lead limited access to the high-income segment of the property industry. For the construction firms, they are regarded as project-base in structure. The ability to garner superior performance lies in the fact that these firms’ growth strategies chosen have a fit with the market segments and can successfully win the projects. This ability to use resources and core competencies effectively are mainly due to good managerial process in response to market´s need. The opportunity to grow are also based on the reputation and image of the firms which were built through strong capital structure and ability to grasp opportunity and be proactive rather than reactive. In other word, this ability does not seem to relate to the age of the firm’s listing as younger listed firms are shown to have similar performance, or even in certain cases, outperform some older public-listed ones.

Both sectors display similar patterns in their trend towards achieving superior financial performance whereby increase of productivity contributed by R&D through innovation of new technology to support their businesses’ value chain. Notwithstanding the age of listing, superior performance firms have mastered cost effective strategies through productivity’s thrust of using cost efficiency and resources to maximize the outcome through operational effectiveness, R&D though innovation of new technology to support the value chain. In addition, the productivity is positively related to systematic monitoring of labour and material, selection of quality suppliers and subcontractors, effective resource and labour saving, reputation and image, , innovative project management, offering customize products, focusing businesses in specific geographical areas and penetration into new locations for future potential opportunities. Furthermore, the financial performance in the property sector was improved through close customer relationship strategies and keeping close attention to changing customers’ need and technological trends. For both sectors, productivity is linked to many factors; such as investments in R&D, lower rate of accidents, project managerial process and resources deployment. Furthermore, the

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attainment of economies of scales and learning curve are not framed by age listing, since both older and younger listing-firm demonstrate almost similar ability in adopting best practices and new innovative technological process. For the property sectors, these best practices extend to things such as investment appraisal services, brokerage, consulting, insurance, matching/listing services, mortgages, project development, real estate finance, real estate’s transaction process, etc. In conclusion, efficiency, effectiveness, and reputation as well as increasing market share is significantly influential to firm’s performance rather than age of listing. . Based on the above findings, the testing of hypotheses can be summarized as follows: Hypothesis Description Construction

Sector Property Sector

H1 Growth strategy of a firm in the previous year can stimulate the growth strategy in the current year.

Accepted Accepted

H2 Growth strategy of a firm is positively impact on the superior firm performance

Accepted Accepted

H3 A firm’s superior performance is positively related to its level of corporate governance.

Rejected Accepted

H4 Firm size and superior firm performance are positively associated

Accepted Accepted

H5 Firm age of listing can improve superior firm performance

Rejected Rejected

In conclusion, the findings show that the property sector emphasis on both corporate governance and growth strategies to improve their firm performance. While for the construction sector, the focus on corporate governance practices is not as significant in their quest to achieve superior firm performance. The detail growth strategy pattern will be discussed in the following chapter six. 7. Conclusion and Recommendations The objective of this study is to construct a model for leveraging growth strategy and corporate governance for a superior financial performance. This study uses dynamic panel regression method to identify the model of growth strategies, corporate governance and superior financial performance. This panel method is used because it minimizes errors across the estimated points on the line and the actual observed points of the estimated regression line by giving the best fit. There are 38 full set of data for construction sector, while for the property sector the data sets amounted to 76 firms. Panel regression analysis is conducted as Pooled regression, Random effect and Fixed effect. Finally, random effect is found to be the most appropriate and subsequent analysis was conducted. Different types of firm performance measurements were looked into, and it is found that MVA is the most powerful indicator of a firm’s superior profit level. Market value added is wider in scope to indicate the firm performance by underlying not only

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internal firm performance but also comprising capital market achievement for the firm. Random effect was adopted as the most appropriate to interpret the results for both the construction sector and the property sector. The above methodology and performance measurement were used as it is deemed to be the most appropriate to study the complexity of the property and construction industries. The real estate industries cover a wide range of interrelation activities, starting from the preproduction, production and post production stages. Not only do each phase has its own value chain, but they are governed by numerous government agencies, and also different sets of acts and regulations. The process of navigating through the various government legislations, in addition to macro environmental factors such as the economy, technological changes, market supply and demand greatly affect the type of strategies adopted. Construction public-listed firms adopted more types and breadth of growth strategies compared to the property firms. Big sized and well-established construction firms are able to set a premium price for their products while maintaining a low-cost structure in comparison to their competitors. The level of strategy percentage ranges from 0% (translated as having no growth strategy) to 30%. (the highest practices of growth strategies as stated in the respective firms’ annual reports). Construction sector’s firms give high emphasis to customer relationship and development programmes, new market strategy, research and development, risk management, sales opportunities and using new methods and technology in their business processes. These firms were found to have achieved high growth by identifying new markets for their new but related products. As product differentiation is a relatively new strategic concept, these construction companies are able to gain competitive advantage through these actions. The use of innovative designs and green technology is especially prevalent among developers of high-rise residential projects due to the intense competition in this market segment. When it comes to suppliers of material, the big-sized developers are also able to enjoy greater bargaining power due to their economies of scale in comparison to the small developers. For the property sector’s firms, the research findings show that they have relatively less diversity and breadth of growth strategies being adopted as compared to the construction sector’s firms. That is, as the highest adoption level is not more than 8% while construction sectors firms have minimum 5% and maximum is greater than 25%. The property sector indicates that new market and business processes, introduction of new product offerings, research and development and risk management as their main thrust in growth strategies. This is because the trend of high demand enjoyed over the years have led to many new developers entering the market, leading to overcapacity, and thus stronger rivalry. Due to this high competitive rivalry, a lot of the industry players have decided to shift their geographical coverage and launched affordable landed properties in townships outside the city centre, in order to take advantage of the newly constructed infrastructure. These findings indicate that the research expenditures used by the both sectors are relatively high and real growth can be determined from the findings of the statistical analysis (panel regression analysis). In terms of corporate governance, construction sector was seen to have less influential effects as compared to the property sectors, while listing age do not have significant influence to the firms in both sectors. This study highlighted how the measurement of the attributes of business growth strategy for each firm on an annual basis by using content

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analysis or disclosure analysis. This is done by using secondary data as appeared in the annual report of the firms from both construction and property sectors. Since the level of growth strategy is one of the independent variable, the measurements have to be categorised for a systematic analysis of the different types of strategies adopted. To determine the attributes of growth strategy levels based on the different types of business growth strategies; these are classified into categories of strategies namely; market penetration strategy, market development strategy, product/service development strategy, diversification strategy: vertical integration and mergers, acquisition, joint ventures: horizontal integration. 7.1. Limitation of Study As in most secondary-based research studies, there are certain limitations in the present study due to the boundaries in terms of data source and scope covered, and hopefully, these limitations can be addressed in future studies. Unavoidably, the data restricted in the annual report contains certain degree of preparers’ justifications of activities. Consequently, certain data may be prejudiced as a result of different understandings or personal preconceptions of the Annual Report’s preparers, which can influence the quality of the measures. Besides, this research is confined to the Malaysian public-listed construction and property firms only. The findings of this research may not be applicable to other types of ownership structure or SMEs in these two sectors. However, it can be seen as a reference to these other firms as they are mostly facing comparable challenges due to the similar prevalent economic and business environments. Given these limitations, it poses an opportunity to further the research in this area of growth strategies, corporate governance, firm’s size and age by expanding the resources and perspectives to include primary data sources and also expanding the variables being studied. References Amit, R., and Schoemaker, P.J. (1993). Strategic assets and organizational rent. Strategic

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EXECUTIVE SUMMARY: PAPER 6

PRESENTER: SR DR SITI UZAIRAH BINTI MOHD TOBI, UTM

AGEING IN PLACE OVERVIEW FOR THE ELDERLY IN

MALAYSIA – LANDED PROPERTY HOME FOR

GENERATION X AND BABY BOOMERS

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AGEING IN PLACE OVERVIEW FOR THE ELDERLY IN MALAYSIA – LANDED PROPERTY HOME FOR GENERATION X AND BABY BOOMERS Sr. Dr. Siti Uzairiah Binti Mohd Tobi, Dr. Mohamad Syazli Bin Fathi Universiti Teknologi Malaysia Professor Dilanthi Amaratunga Huddersfield University, United Kingdom

ABSTRACT

The size of population in Malaysia had reached 28.3 million in 2010 and is expected to

increase to 38.6 million in the next 30 years. Malaysia data illustrates that 7% of the older

population age are more than 60 years during 2005, which is anticipated to double up to 14%

in the year 2028. This research has comprehensively reviewed the relevant articles and

journals to discover the concepts, definitions and issues regarding the ageing population

globally and in Malaysia, particularly on how elderly people age in place. Many researchers

are in agreement on the main focus areas towards a successful ageing in place home, these

three main areas are housing, surrounding facilities and social inclusion.Therefore, the

continuous increasing ageing population calls for the responsible parties which include all

stakeholders, such as government agencies, developers, researchers, practitioners, local

community and NGOs to further explore this research area. Accordingly, the concern over

ageing is not only about the size of the old age population but, more importantly the health,

the welfare and care, the living arrangements, the infrastructure, housing, income and

economic growth. Hence, this study investigates on this issue by deploying multiple case

study approach as the research design. Data are collected using semi-structured interviews,

focus group discussions, and document reviews. NVivo software is used to analyse the data

towards identifying the emerging themes. It is found that the built environment plays a role in

defining the conditions for people to live healthy lives. This is because older people require

high-quality built environment that suit their needs across the whole life course in the form of

a building stock and infrastructure that support independent living and enhance their quality

of life. The outcome of this report can be used as the foundation to further develop a

comprehensive guideline on standards of living for senior citizens in Malaysia through the

provision of better support services and facilities, as well as the creating age-friendly, safe

and sustainable environment.

Keywords: Ageing in place, housing, landed property

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1. INTRODUCTION

The ageing population is a global phenomenon which has major consequences and effects

for whole aspects of human life. Ageing is more obvious in developed countries and less

evident in the developing countries (Akil and Abdullah, 2015). In 2050, the world population

is estimated to rise within the range of 8 billion and 9.6 billion (Guerin et al., 2015). The ageing

population can be perceived as a major demographic challenge in many European countries

within the following fifty years. Its implications on socioeconomic systems, such as public

pensions programmes, health care or kinship structures should be substantial (Lanzieri,

2011). On the other hand, the ageing population disseminates quickly and has become one

of the utmost challenges around the world. Globally, the total number of elderly people is

anticipated to rise three times from 259 million in 1980 to 761 million in 2025. A significant

72% of this population (236.9 million) is determined by developing countries (Minhat et al.,

2014).

The continuous increasing ageing population calls for the responsible parties, for instance,

the engineers (in order to supply the tools and apparatus for daily activities in the garden and

in the kitchen in a less strenuous manner) to take the limitations of the ageing population into

account during the design process. Ergonomics considerations such as comfort and usability

with regards to the ageing population should be further highlighted since the ageing

population would be more vulnerable to common injuries while using these tools and

apparatus (Lee et al., 2015). On the other hand, ageing enhances the percentage of elderly

with additional morbidities and functional infirmity. Addressing this challenge has major

consequences to the government at the same time to the elderly in parts of socio-economic

and health issues out of all societies around the globe (Ramachandran and Radhika, 2013).

The size of population in Malaysia had reached 28.3 million in 2010 and is expected to

increase to 38.6 million in the next 30 years. This demographic milestone causes renewed

attention to the challenges caused by population growth (Rashid et al., 2014). Malaysia data

illustrates that 7% of the older population age are more than 60 years during 2005, which is

anticipated to double the percentage to 14% in the year of 2028.

a) Problem Statement

As the number of older persons in Malaysia continue to rise, issues and topics related

to elderly people become more prominent (Wan Ahmad and Ismail, 2014). Studies by Yusoff

and Zulkifli (2013), Mafauzy (2000) and Ariokiasamy (1997) affirm that senior citizens in

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Malaysia face various problems that affect their health and wellbeing such as shortage of

trained health care professionals, unsuitable housing design, lack of social and health

programs that encourage active lifestyle, inaccessible public transportation and others. Most

Malaysians would prefer to reside in their own homes and have no desire to move to another

place as they get older (Syed Abdul Rashid et al., 2006). They also found that the current

home environment in Malaysia poses many barriers that interfere with the wellbeing of elderly

people in Malaysia, such as slippery flooring, lack of space, lack of grab bars, split flooring

and others.

One of the proposed solutions that addresses these issues is the implementation of practices

that encourage ageing in place in Malaysia. Although there is a growing emphasis on ageing

in place in more developed nations, there seems to be a shortage of current research and

publications on the topic in Malaysia especially with regards to the built environment (Syed

Abdul Rashid et al., 2006; Wai & Wei, 2010). Nevertheless, the Malaysian government has

been more aware of the growing needs of seniors and has taken measures to address these

needs through initiatives such as the Economic Transformation Programme, the National

Policy for Older Persons, and by increasing the minimum retirement age to 60 years old

(Zawawi, 2013; PEMANDU, 2013; Chin, 2015). These findings indicate that there is a growing

focus on addressing the needs of Malaysia’s ageing population through programs and

developments that focus on improving their wellbeing using a multi-sectoral approach.

Therefore, this research is significant as it contributes to the limited information that is known

regarding the current challenges faced by older persons to age in place in Malaysia,

particularly in urban area. This research is in line with the preferences of many people to live

in their homes as they grow older with a focus on landed property.

It will also contribute to the efforts carried out by the government to improve the health and

welfare of senior citizens in Malaysia through the provision of services, facilities, and

developments (Syed Abdul Rashid et al., 2006). The findings of this research are significant

as it identifies the current challenges faced by elderly citizens in Malaysia, as well as it

deduces the good practices to age in place. This will be done through a proposal of a

preliminary guideline that can be implemented to address these issues.

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b) Research Objectives

The following are the research objectives of this research:

i. To identify the ageing in place practices based on the global existing guidelines

and best practices.

ii. To assess the challenges faced by the elderly population to age in place in

urban areas in Malaysia.

iii. To develop a framework that can be used to establish a guideline for ageing

in place population in Malaysia towards age friendly facilities and environment.

2. LITERATURE REVIEW

The ageing in place concept discussion includes providing the definition of an elderly person,

the physical environment and living arrangements for elderly people, and the definition of

ageing in place, with particular focus on landed property home. This section also discusses

on literature findings from housing related areas, facilities and services, as well as social

related areas. Finally this section provides an overview for the stakeholders involved in this

research which are the Baby Boomers and Generation X.

a) Definition of an Elderly Person

According to Karim (1997), ageing can be defined as a biological, sociological, economic and

chronological phenomenon. In this paper, the chronological definition will be used and in line

with the United Nations and Ministry of Health's recommendations, "the elderly or ageing

population" will be taken to mean people aged 60 years or older. Consequently, at the

moment, there is no United Nations standard numerical criterion, but a cut off age of 60 years

refers to the elderly population were adopted by many developing countries (Juni, 2015). On

the other hand, ageing can be described as an extensive concept which comprises mental

capabilities, physical alterations to the bodies, social characteristics via the adult life and

psychological modifications to the minds. Additionally, it takes into account the elderly

people’s capability on their situation or condition, self-care and position [wz1]within their families

along with their social networks. These inquiries are within their aptitude and capability to

deliver the information on their behalf, to ensure a suitable and pleased life (Abdullah et al.,

2013).

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An ageing population is a challenging domain that affects developed and developing

countries. Every month, one million people turn sixty years old. Furthermore, the projected

growth of elderly group will increase exponentially, and the need for resources to care for

older individuals will, therefore, increase proportionately. This growth will also result in an

increased incidence of degenerative diseases and disability. This will lead to the need of

generating knowledge on how to care for this population (Abdullah et al., 2016). In Malaysia,

the elderly people (aged population) are described as people aged 60 years and over (MHLW,

2013; Mohammad and Abbas, 2012). Accordingly, as the number and percentage of the older

population of Malaysia continue to increase, the need for extensive and current information

on the older population increases and thus, issues regarding elderly persons are becoming

increasingly important to be addressed (Wan-Ibrahim & Zainab, 2014).

b) Elderly Physical Environment

Many studies have discussed the importance of appropriate physical environments towards

positively influencing the health and wellbeing of individuals, which include Netherlands Board

for Healthcare Institutions (2008), Lavin et al. (2006) and Joseph (2006). According to reports

from Elsevier (2011) Stevens, Holman and Bennett (2001), Carter et. al. (1997) and Kirby

(2004), there are various environmental hazards which could increase the susceptibility of

elderly persons to injuries and falls, which include poorly designed stairs and handrails, bad

lighting conditions, stepovers, uneven walkways and others. These risks are often made

worse due to the weakened mental and physical state of the elderly individuals, some who

live alone and some are isolated from friends and family in their homes. Thus, in order to

make it safer for elderly persons to age in place, it is important to first create a safe physical

environment for them to live in.

Todd and Skelton (2004) interpret the physical environment as a general definition which

encompasses the home and community environment for an elderly person. This includes the

housing options (own house, assisted living facility, nursing home and more), public spaces

(hospitals, supermarkets, recreational and parks and others) and the spaces that connect

these places together (public transport stations, pavements and walkways and so on). The

National Council on Aging (2015) and Centres for Disease Control and Prevention (2016)

have both reported that one of the major risks from the physical environment for the elderly

population is related to injuries from falls, which can result in lower self-esteem, reduced

mobility, and serious injuries which require hospitalization. Furthermore, barriers in the

physical environment can cause mobility issues that will hamper active and healthy lifestyle

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habits and prevent access to much needed services and facilities within the community.

Hence, it is important to develop physical environments that suit all community members

regardless of their age and ability levels, as it will play a vital role in maintaining their quality

of life.

c) Living Arrangements

Based on findings from the Technology Strategy Board (2013), Congressional Budget Office

(2013) and Beattie (1999), there has been an increasing demand for long-term living

arrangements for the elderly in countries like the United States, Australia, and United

Kingdom as a result of higher numbers of elderly persons within the population.

Consequently, there is currently a diverse range of long-term care living arrangements for the

elderly population in those countries which can be selected based on personal preferences

and level of care needed either from home, within a chosen community or in a senior care

facility. There are five main types of common living arrangements that are available for the

elderly ranging from day care services to nursing homes (A Place for Mom, 2015).

According to Ball et al. (2011), preferences such as the location to family and friends,

preferred lifestyle habits, health conditions, financial costs and the need for companionship

will determine the type of living arrangement that is most suited for the needs of the elderly

person. Most importantly, the availability of various living arrangements allows the elderly to

continue living in their preferred environment with an appropriate level of care in a situation

where ageing in place is no longer a feasible option. Table 1 briefly discusses the five types

of living arrangements that are available for the elderly population based on literature reviews.

Table 1: Living arrangements for elderly population

No Type Description

1 Adult day care services

• Community-based service for elderly living at home and their caregivers (A Place for Mom, 2015).

• Services include respite care programs for caregivers (half-day or full-day care), social activities in group settings, healthcare services, transport services and more (Metlife, 2010)

• Alternatives for elderly who might otherwise require care in a nursing home or assisted living to stay in a comfortable and familiar environment.

2 Home care • Provision of services so individuals can live in their homes or communities as long as they are able to through local resources (Alberta Health Services[wz2], 2008).

• Suitable for persons who want to maintain their independence but still require low-level assistances with daily activities

• Services include transportation to and from the home, preparation of meals, basic medical services companionship,

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bathing and more (A Place for Mom, 2015; Home Instead Inc., 2014).

3 Independent living / retirement living communities / senior apartments

• Suitable for individuals 55 years and above with good health conditions, still independent, prefer the company of peers and want to have basic services provided for them (A Place for Mom, 2015; Robinson et al[wz3]., 2016).

• Promotion of active and healthy lifestyles ranging from affordable senior apartments to luxury apartments.

• Services provided include housekeeping, home maintenance, meals preparation, home health aide, and transportation, social and physical activities.

4 Residential care / assisted living

• Group residence which is limited to a number of persons with basic care and assistance as well as 24-hour security and supervision (Robinson, 2016)

• Appropriate for elderly or disabled persons who are generally independent but need minor assistance with daily activities or anticipate needing them in the future (A Place for Mom, 2015).

• Non-medical facilities in a home-like setting with greater emphasis on independence compared to nursing homes (Nochomovitz, 2008).

• Some facilities offer specialized care on certain groups of elderly i.e. Alzheimer’s and dementia care (Washington’s Community Living Connections, 2016).

5 Nursing homes • Long-term care facilities and offer comprehensive healthcare services for elderly with chronic or acute illnesses or injuries (Nochomovitz, 2008).

• Is considered the last option for elderly persons who require constant medical supervision which they cannot receive from home or community care facilities.

• Skilled medical care and assistance with daily tasks are provided by trained staff. Medical devices and equipment are available to cater to various healthcare needs (A Place for Mom, 2015).

• Healthcare professionals are available at the facility to support staff members and continuously assess the health of elderly patients (Ginzler, 2009).

d) Ageing in Place Definition

In the recent years, there has been a steady increase in discussions regarding the ageing in

place concept especially in developed nations where the ageing process is more pervasive,

as indicated by studies from the World Health Organization (2015), United Nations Population

Fund and Help Age International (2012), Farber et al. (2011) and Metlife (2010). Despite

increased discussions over the years, there have been limited evidences on the evolution of

the concept within the gerontological body of knowledge. However, from the 1990s to 2010

the ageing in place concept has grown in popularity in both policies and scientific research

and has been stated directly and indirectly (Vasunilashorn et al., 2012).

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Thus, the most recognized definition for the concept of ageing in place which has been

extensively used in current studies is as follows:

(Ageing[wz4] in place is) the ability to live in one’s own home and community safely,

independently, and comfortably, regardless of age, income, or ability level.

(Centres for Disease Control and Prevention, 2009)

In different terms, ageing in place involves developing services and facilities that will allow a

person to stay in their homes or chosen environment for as long as they are able to as they

grow older. Ageing in place is seen as a desirable concept for many as it provides an option

other than institutional care where a person can remain independent even as their health

conditions change over time (Metlife, 2013). Studies from Farber et al. (2011), Prosper (2012),

Greenberg and Schwarz (2009), and The Advantage Initiative (2003) have all indicated that

a majority of elderly people prefer to age in place rather than relocating to another place or a

residential care facility. This is because ageing in place allows them to maintain their

independence, social engagement and networks, and remain in a safe and comfortable

environment (Van Der Pas, 2009). Studies have also shown that the concept of ageing in

place not only refers to the physical environment or living at home, but also focuses on the

improvement of services and facilities that affect the wellbeing of elderly persons and other

community members, including healthcare services, technology, social support and more

(Vasunilashorn et. al., 2012; Pastalan, 1990). Thus, it can be concluded at ageing in place is

a comprehensive concept which, if implemented correctly, can become a solid basis for

developing sustainable communities for the present and future generations.

e) Age-friendly Housing

Studies have revealed that many designers and developers still lack awareness regarding the

concept of universal design and its implementation, as well as the unique housing

requirements of the elderly population and persons with disabilities (Null, 2013; Granger and

Asay, 2015; Saito, 2004). To counter this issue, these studies have provided suggestions

which will increase the awareness on the universal design which includes providing financial

support, offering incentive programs, improving the current education module, and promoting

the benefits of proper implementation of universal design and accessibility features. On the

other hand, Johnson and Edwards (2002), suggested in order to increase knowledge and

understanding on universal design and accessibility, more programs and workshops should

be conducted to designers and developers. Hence, these findings suggest that many

improvements are still necessary to create accessible environments for persons with

weakened capabilities, which often includes the elderly population.

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Some of the initiatives that can be implemented to improve the awareness and adoption of

universal design standards include developing checklists and guidelines as a reference,

providing training and education programs, promoting awareness on universal design and

accessibility topics, and encouraging more professionals to provide consultation and expert

services (Vanderheiden and Tobias, 2010; Centre for Excellence in Universal Design, 2012;

Australian Local Government Association, 2006). One example would be the United

Kingdom’s Inclusive Home Design Act which was introduced in 2003, that provide minimum

requirement standards for the design of homes to improve its visitability for persons with

disabilities, which include accessible outlets and switches, wider doorways, zero-step

entrances, and a bathroom located at the entry level (Hartje, 2004; Imrie, 2003). Meanwhile,

there are various guidelines that are available which provides guidance and better

understanding on topics related to universal design and accessibility which include those by

AusAID (2013), Centre for Excellence in Universal Design (2012), the U.S. Department of

Housing and Urban Development (1998), and Livable Housing Australia (2012).

f) Facilities and Services

Apart from having an age-friendly home environment, it is equally important to provide the

necessary services and facilities within a community to enable more people to age in place.

The quality and delivery of services to the community play an important role in allowing more

elderly persons to remain in their homes and maintaining their independence despite

weakening physical and mental conditions. According to Metlife (2010), home and

community-based services should also be developed so that they are well-coordinated with

each other while also provide different levels of care that can be adjusted according to the

needs of the individual. This sub-section provides a discussion on facilities and services which

should be improved and developed to encourage better ageing in place efforts, which includes

improving the healthcare delivery system, developing a variety of long-term care services,

encouraging the development of senior activity centres, improving transportation services and

mobility options, and enhancing places of worship for elderly persons who wish to focus on

religious aspects during the latter part of their lives.

g) Healthcare Services

Although the body of knowledge in the healthcare sector has advanced throughout the

decade, the current standards in the healthcare system can still be improved to fulfil the needs

of the elderly (Morelli and Dilani, 2007; Bennett and Flaherty-Robb, 2003). Some necessary

improvements needed include better management of chronic illnesses, support for informal

caregivers, and financial assistance for people who struggle to pay for healthcare services.

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Rice and Estes (1984) reported that even though people now have a longer life expectancy,

chronic illnesses have become more widespread and is now the top cause for disability and

functional dependency for middle-aged and elderly groups which in turn requires services

from various sectors to accommodate their needs. In addition, Stanton (2006) and Alemayehu

and Warner (2004) indicated that compared to other age groups, the largest consumers of

healthcare expenditures in the United States are persons aged 65 and above.

For the past few decades, the healthcare industry in Malaysia has grown exponentially and

is one of the biggest multipliers for the economy (PEMANDU, 2013). The healthcare system

in Malaysia is divided into two categories which are the publicly funded healthcare system run

by the government as well as the private healthcare system. Abdul Wahab (2013) reported

that many Malaysians largely depend on the public healthcare system, which in 2013 provided

an approximately 74% of hospital beds and gave employment opportunities to 68% doctors

in public hospitals and clinics. According to the Ministry of Health, the Malaysian government

allocated 8.39% of the National Budget which amounted to over RM22.16 billion towards

improving the public healthcare system. In addition, Tan (2014) reported that based on a

study by the American Publication International Living, the healthcare system in Malaysia is

listed as the third best out of 24 other countries.

According to the latest Health Facts report published by the Ministry of Health in 2014, there

were 132 public hospitals and eight private hospitals in Malaysia, which indicated that for

many Malaysians, the local healthcare services were mostly affordable and accessible (MoH,

2013). The healthcare system in Malaysia is generally geared towards short term care and

hospitalisation, although more attention is now given towards developing better preventive

and primary health care (Mohamed, 2000). Furthermore, there is currently growing interest in

the elderly or senior care market in Malaysia, particularly on the provision of long-term care

facilities and services where there has been a gap in provision of services in the past. Thus,

the amount of investments and developments related to senior care services and facilities

have grown in the past few years.

However, Kumar (2014) stated that due to the improved standards of the healthcare system

and the increase of minimum wage rates, the costs of healthcare services in Malaysia have

increased. Furthermore, the burden placed on the healthcare system in Malaysia is also larger

due to the increasing number of elderly persons, while advances in the field of medical

science using technology has resulted in better treatment procedures but increased medicine

costs (Soon, 2010). Pillay et al. (2011) also reported that there are several issues related to

the delivery of healthcare services which include heavy workloads, insufficient number of

facilities, slow processing speed, and lengthy waiting times. Hence, from these findings it can

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be concluded that although the healthcare system in Malaysia is satisfactory, there are still

issues with its affordability and quality which will likely be worsen over time.

h) Social Support

In terms of the social needs to age in place, the biggest issue which needs to be addressed

by policy-makers and communities is related to the social engagement and involvement of

the elderly population in Malaysia, which is backed by studies from the Advantage Initiative

strategy (2003) and New Zealand Ministry of Social Policy (2011). The health and wellbeing

of elderly persons is positively impacted from the development of regular social engagement

and contact with other members of the community. This is because elderly persons who are

socially active and constantly engaged with other people have been shown to have a slower

decline of health compared to those who are less socially active over time (Alden, 2011). This

emphasizes the importance of elderly persons maintaining regular contact with other persons

within the community as it lowers the risk of social isolation and depression and reduces the

barriers towards receiving appropriate services and facilities, which coincides with findings

from the British Columbia Ministry of Health (2004). Thus, various social activities and

programs that suit the needs of the elderly are required to allow them to maintain their sense

of dignity and facilitate their access to available community services.

The Alberta Health and Wellness (2008) reported that in order to improve ageing in place and

create an age-friendly community, it is necessary to improve social services and also provide

good opportunities that encourage the participation of elderly people within their communities.

There are several initiatives which can alleviate the social issues faced by the elderly

population, which include developing safety awareness programs for the elderly, creating

better opportunities for elderly individuals to join in community problem solving groups and

discussions, and promoting more physical activities and assisting exercise programs which

promote active ageing lifestyles (WHO, 2007; N.Z. Ministry of Social Policy, 2001). Apart from

developing these programs and activities for the elderly population, it is also equally important

for these programs to be accessible for elderly persons who might have face problems in

accessing them under normal circumstances.

According to studies by Mustaffa and Ahmad Alkaff (2011) and Mohd Sidik et al. (2003), many

of the elderly population in Malaysia face loneliness, social isolation and depression,

particularly those who are living alone. Ibrahim et al. (2013) validated this by reporting that

nearly half of the elderly persons involved in their research from a sample size of 1115

experienced social isolation. Thus, it is crucial to have a proper social support system in place

as issues with social isolation and loneliness can become serious health risks for elderly

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persons to the point where it increases the risk of mortality (Menec, 2016; Wiles et al., 2011).

Some social support features which encourage ageing in place efforts include recreational

activities, assistance with mobility needs, repair services and educational programs (Ross,

2014). From these findings, it can be concluded that the development of social support

services and programs which encourage the social participation and engagement of elderly

persons with other members of the community should be prioritized to ensure the success of

ageing in place practices. This statement is validated by Wan Mohd Azam et al. (2013) who

stated that the provision of social support for elderly persons partially prevented them from

feelings of loneliness and depression. This section thus discusses important initiatives which

will improve the social engagement of elderly persons in Malaysia to age in place.

3. METHODOLOGY – Case Study Approach

This research is an exploratory by nature, using case study approach to clearly identify the

boundary of the phenomena being studied (Yin, 2003). It will be done through getting an in-

depth understanding of the issue from the explanation and discussion given by various group

of selected respondents (Siti, 2016[wz5]). Under the research methodology chapter, this study will

present the research design used in the course of completing this study which is mainly the

qualitative approach. Thus, an approach suited to exploration and description is required.

Accordingly the case study design is deployed since it will be the most appropriate approach

to explain a phenomenon, due to limited current studies on this topic particularly in Malaysia.

This study has chosen a multiple embedded case study design in accordance with the data

collection by having unit of analysis to help focus on the related issue being studied.Thus, the

idea generated from the obtained data and literature review will be used to develop the initial

guideline for ageing in place in the urban area in Malaysia with the focus on landed property.

Hence, the research questions formulated for this study demand the study to be more

exploratory and explanatory in nature, in order to achieve the aim of developing a framework

towards establishing a guideline for ageing in place population. Later, the study needs to

explore the applicability of the model in Malaysian context in using it as an enabler in the

ageing population setting for landed property. In order to explore the applicability of the model

in the Malaysian context, the study needs to take multiple case studies to seek the research

findings in a robust way. Several areas under local governments will be taken as cases to be

studied. This will help to see the applicability of the framework in different environments, yet

moving towards the same goal. Each area is the subject of an individual case study, but the

study as a whole covers several areas with involvement of two groups of stakeholders as

respondents. The two groups of stakeholders from ageing in place context are:

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i. Providers – Local Government (Head of Department)

ii. Users– selected three case studies or localities with a focus on landed property (Shah

Alam, Klang and Kuala Lumpur) using local government as the platform to engage with

community leader

a) Selection of multiple case studies

As discussed in the previous section, the three local governments involved are those who

have common features such as, a centre of administration and commercial activities, and

have a population of more than 400,000. In accordance with this, Local Government

Department, under the Ministry of Housing and Local Government Malaysia has

determined that in order to be declared as a city council the area needs to have a

population of over 400,000 people, become a centre of administration and commercial

activities, and generate an annual income of over 100 million Malaysian Ringgits.

The three local governments are as listed below:

i. Case A – Shah Alam (under Shah Alam City Council)

ii. Case B – Klang (under Klang City Council)

iii. Case C – Kuala Lumpur (under Kuala Lumpur City Hall)

These three cases at Shah Alam, Klang, and Kg. Baru, Kuala Lumpur were selected

because the researchers need to identify a group of community that is currently ageing

in place (grow older at their respective residents). The justification of growing older is

referred to the community who currently resides the area until the third generation of the

family member namely the parent, the children and the grandchildren.

b) Data Collection Techniques

Semi-Structured Interviews (Stakeholder 1 – Local Government (PBT)

The identified respondents are the Head of Departments who are currently involved in

the welfare of elderly people and who are responsible to endorse the permission to

renovate houses (landed property).

Focus group discussion (Stakeholder 2 – Community Group).

The identified respondents are the Residents Association Committee Members, who

comprised three family generations namely the parents, the children, and the

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grandchildren. The ageing population are referred to either of these two age group

types:

➢ The elderly (Baby Boomers – the age group is between 53-71 years old)

➢ Ageing people (Generation X – the age group is between 37-54 years old).

Document Reviews

During the case study phase, document review will also be used as a supplementary

technique of data collection as a means of triangulating the data collection sources.

Relevant local government documents related to the elderly policy and welfare will be

reviewed.

c) Data Analysis Techniques

Content analysis

In order to analyse the content of the interview transcript, several analytical strategies

will be used namely display data, identify codes, reduce information, count frequency

of codes and relating categories. This type of analysis can be useful for discovering

patterns of ideas in the body of text (Krippendorf, 2004). Those strategies are used to

identify the emerging pattern from the vast amount of data from the interview

transcripts.The researcher will be using a computer software, NVivo version 11 in

managing the rich data and information arising from the interviews for this research.

The computer aided software save the researchertime in analysing data while

manipulating the qualitative data. Manipulating the data is like a ‘trial and error’ method

used to achieve the appropriate conclusion. In conclusion, computer software can help

a researcher to utilise time and manage the data more efficiently, without neglecting

the importance of following the analytical procedures of the research.

Cognitive Mapping

Cognitive mapping is used as a technique to structure messy or complex data (Eden

and Ackerman, 1998), as well as to structure ideas and identify relationships between

them. A map can be a powerful way of analysing and presenting large amounts of

qualitative data, and is also useful in planning the next steps in identifying areas where

more information might be required (Easterby Smith et al., 2003). Clark and Mankeness

(2001) suggest that the popularity of the technique emanates from its inherent simplicity

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and the attractiveness of using visual forms of data presentation. Accordingly, a

cognitive map is a graphical representation of an individual’s understanding of a

particular issue, domain or problem (Spicer, 2000), which if elicited properly, potentially

allows for a deeper and more integrative understanding and insights for the researcher.

Thereby, content analysis is used to identify concepts by developing codes, whereas

cognitive mapping is used to explore relationships among concepts by illustrating the

visual presentation.

4. RESULT

The cross-sectional analysis is carried out based on the data gathered from Focus

Group Discussion and interview data collection. The data gathered from both techniques

helped provide a better result as all data are converged. The validity of the result is compared

and discussed through the findings from all case studies with the evidence from the literature

review findings. This process helps the researcher to scrutinise the transcripts towards finding

the emerging pattern. These findings are listed as free nodes before the related child nodes

(sub nodes) are clustered in the main node (main themes). The final result for analysis are

then presented using cognitive mapping diagram that is identified as the initial framework

model for ageing in place guideline.

a) Summary of Analysis Result

The final stage of analysis is the exploratory stage, to summarise the result from the

cross sectional content analysis from all cases. The summary of the result is

presented in the following figure, grouped under the related themes.

Theme 1 – Housing related area

Intangible Factors

Extra land for activity (mental therapy)

Monthly financial aids (min RM500 to eligible families)

Need to have the elderly policy in place

Tangible Factors

Age friendly housing or home modification for elderly

Allocate rooms on ground floor

Wider entrance size

Extra land

Grab bars for toilets

Attached toilets

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Good lighting

Minimum land area (24’x75’)

Minimum three rooms

Minimum room size (12’x12’)

Non slip flooring

Ramps for wheelchairs

Same levelling floor all areas

Single storey housing are preferred

Housing Maintenance for elderly Provide mobile cleaning services registered with LC

Provide maintenance team registered with LC

Universal Design (UD) for eldersly should be regulated

Theme 2 – Facilities and Services related areas

Facilities Activity Centre Need to have periodic or scheduling activities

Places of worship Addressing different religion needs

Healthcare Services

Enough public ambulance is crucial

Caregivers and caretakers support

Health education and awareness programs

Mobile clinic and mobile doctors

Nearest public clinic is essential

Visit or routine medical check up from the nearest hospital

Transportation and mobility

Increase frequency of buses

Provide local transport to the community

Smaller transport (mini bus, van, car)

Various pick up points for public transport (covering the internal area)

Theme 3 – Social related areas

Community Safety and Security Crime protection and security

Periodic police patrols

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CCTV at strategic locations

Dessimination of information Encourage positive social interactions

Sharing of knowledge and expertise

Financial Stability Empowering the elderly for financial stability

Government and other Agencies Fund and Support

Help under social welfare department

Senior citizen aid and funding

Promote independence and self-empowerment

Social activities by Government, NGOs, CSR private

Currently, most activities are conducted at Masjid or Surau

Community activity in groups (involvement from all)

Government and NGOs need to conduct activities which include (the elderly)

Social support from local community

Stay close with family and realtives

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[wz6]

Figure 1: Cognitive mapping developed using Nvivo – The Main Theme and Sub-Themes

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d) Document Reviews

Document reviews are also used in this study as a supplementary technique to

triangulate the data collected from other techniques (focus group discussion and

interview).

Report on the Policy Dialogue of Asian Parliamentarians and Experts on Ageing

The researcher participated in the dialogue on 11 October 2016 to gain knowledge and insight

on current issues and practices from Asian countries. The researchers have identified that

the dialogue output is in agreement with the findings from this study. There are three key

points from the dialogue that are closely related to the result as underlined below:

Table 2: Document review analysis (The dialogue)

The Dialogue The undertaking study

RECOGNIZE that population of ageing is a global phenomenon and many developing countries in Asia are ageing at lower levels of development with unique economic, political, social-cultural, health, and environmental situations

This research further investigate issues related to facilities and services, and social related areas (Theme 1, 2 and 3).

BUILDING ON the heritage, traditions, and strengths of the respective Asian communities to seek innovative, appropriate and practical solutions in addressing the multidimensional needs of ageing populations

Under the social related theme, this can be highlighted as promoting independence and self empowerment of the ageing society (Theme 3)

On the other hand, looking at multidimensional needs of ageing could be properly addressed by having an age friendly housing or home modification for elderly (Theme 1).

Looking at the requirements of better facilities and services that they required (Theme 2)

PRIORITIZE limited resources to address the issues, challenges, and opportunities related to the rapid ageing of populations to ensure the well-being of older persons.

The outcome of this study can be used as a guideline that could enhance the standards of living for senior citizens in Malaysia through the provision of better support services and facilities, as well as the creation of environment that age-friendly and safe.

Outputs from this study:

Framework Model for Ageing in Place Guideline

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Report on National Policies on Ageing Malaysia

To further reiterate the findings of this study, the five Dimensions Framework on National

Policies on Ageing is also reviewed. The table below shows the summary and comparison

of the document review analysis.

Table 3: Document review analysis (The report)

The report The undertaking study

Elderly financial aid criteria:

- Aged 60 years old and above - Single with no next kin - No fixed income

*RM300 per month

Theme 1 – Housing

Under Intangible Factors

- Monthly financial aid, minimum RM500 to eligiblefamily

However, the study shows the lack of the needs of proper design or modification for people to better age in their own home as well as other factors that are related to housing, such as maintenance and cleaning services.

Activity Centre for Older Person (PAWE).

- Located throught the country - Organize activities and provisde

socialization platform for older person.

Caregivers and caretakers support across Malaysia with 2,150 volunteers with 5,892 older person involved.

Mobile care services (Unit Penyayang Warga Emas-UPWE)

Since 2008, this service has benefited 17,480 older persons. Operated by Central Welfare Council of Malaysia under Department of social welfare in selected area.

Theme 2 – Facilities and Services

Having PAWE is good, however having local activity centre in each area or having one designated space are more practical for local community.

Need to raise awareness and actively promote the idea of becoming caregivers and caretakers to cater older person.

However, this study finds an urgent needs to be fulfill on number of public ambulance, having mobile clinic/doctor, and visits/routine checkups provided by the nearest hospital (to come to the community).

Government also needs to pay close attention to all findings under transportation and mobility of elderly people.

Government support

In 2016, 25 NGOs received financial assistants from the Government (a one off payment).

Theme 3 – Social

Most of findings under the social themes are not yet delivered to the elderly community.

Therefore, the output from this study can be used as a guideline to take those findings in place.

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In conclusion, in spite of having some limitations, the findings of this study should be used as

a framework to establish a guideline for ageing in place population in Malaysia. Further

investigation needs to be carried out in order to improve and refine the findings before

adopting the final guideline.

It is important for developers to consider the suggestions from the findings in this study in

building homes with the ageing population in their mind. Although there may be an increase

in the initial costing, the benefits can be enjoyed for generations to come.

Finally, the next section explains the framework to establish a guideline for ageing in place

population in Malaysia towards an ageing friendly facilities and environment.

5. CONCLUSION

This section aims to draw a conclusion from the research findings in this study.

a) The Proposed Guidelines Framework for Ageing in Place

Below is the proposed framework to establish a guideline for ageing in place

population in Malaysia.

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Figure 2: Guideline Framework for Ageing in Place

The developed framework consists of the ‘Key Themes’ and ‘Sub-Themes” that are related

and complemented each other. Therefore, it should be used as a reference guide and

consideration for both the policy maker and implementer before any development in relation

with ageing community is undertake. The framework may be extended to other factors that

contribute towards a proper guideline for ageing in place population in Malaysia.

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b) Recommendations

This research has demonstrated a huge potential by offering a framework to establish a

guideline for ageing in place population in Malaysia focusing on age friendly facilities and

environment. The flexible enablers that have been identified through the main theme and

sub-themes have demonstrated a possible used for ageing population in Malaysia. By its

nature, the framework represents only part of the knowledge with various enablers within

the research area waiting to be explored.

The recommendations could be summarized into two (2) components.

i. Firstly, the recommendation for the related stakeholders who can benefit from the

established ‘Guideline Framework for Ageing in Place’ are as stated in the table below.

Table 4: Recommendations for related stakeholders

Government Agencies Outcome from the study

Ministry of Health

Facilities & services theme (healthcare subtheme) - Enough public ambulance for high population area - Health education training and wareness program - Mobile Clinic and mobile Doctor - Routine medical check up activity from nearest clinic - In-situ healthcare support are crucial

Ministry of Urban Wellbeing, Housing and Local Government,

Housing theme - Universal Design being regulated as part of housing development policy and being enforced through state and local governments. Social theme - Ageing community safety and security Facilities & services theme - Easy mobility taking into account their physical condition are crucial - In-situ healthcare support are crucial (work together with Ministry of Health)

Social Welfare Department (Ministry of Women, Family and Community Development)

Social theme - Self empowerment to generate financial sustainability - Fund and support on regular basis - Enough caregivers and caretakers supports

Property Developer Housing theme - People can ageing in place in a better condition of housing by incorporating the Universal Design element for new housing development scheme/township.

ii. Secondly, the future research that can be undertaken in the following areas:

a. These enablers can be applied and taken up by policy makers to make this

recommendation works effectively. The enablers (under the main theme and sub-

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theme) should be used as the basis to develop a comprehensive guideline for ageing

in place policy in Malaysia.

b. Investigate how this new framework could make a major difference in taking

into account the enablers that are related with ageing in place. In addition, perhaps a

pilot study can be carried out to test the enablers in other environment (i.e: for high

rise building). It is hoped that future studies could lead to a better age-friendly facilities

and environment for ageing population, particularly in Malaysia with expanded

features that would benefit the community.

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EXECUTIVE SUMMARY: PAPER 7

PRESENTER: ASSOC. PROF. TPR DR DANI BIN SALLEH, UUM

STRATEGI PENGURUSAN PENJUALAN PROGRAM

PERUMAHAN RAKYAT (PPR) DAN PERUMAHAN AWAM

(PA)

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STRATEGI PENJUALAN PROGRAM PERUMAHAN RAKYAT (PPR) DAN PERUMAHAN AWAM (PA) Assoc. Professor TPr. Dr. Dani Salleh Assoc. Professor Dr. Mazlan B. Ismail Dr. Wan Nadzri B. Osman Dr. Alias B. Rameli ASBTRAK: Inisiatif kerajaan menyediakan perumahan mampu-milik adalah untuk menyediakan keperluan tempat tinggal yang mencukupi dan selesa di kawasan bandar. Pelbagai program telah dilakukan, antaranya adalah seperti Program Perumahan Rakyat (PPR) dan Perumahan Awam (PA) untuk disewa. Walaubagaimanapun, setelah sekian lama program ini dilaksanakan, kerajaan telah menyedari timbulnya masalah yang serius dalam aspek pengurusan dan penyelenggaraan unit-unit program perumahan dan ianya perlu ditangani dengan segera. Ini adalah kerana sekiranya mereka terus menyewa dikhuatiri akan menghadapi masalah kewangan dan tidak mampu membayar sewa dan caj penyelenggaran. Kutipan caj penyelenggaraan yang tidak mencukupi akan menjejaskan kerja-kerja penyelenggaraan bangunan dan akhirnya kawasan perumahan berkenaan menjadi kawasan slum. Ini akan menyebabkan kerajaan terpaksa menanggung kos membaikpulih yang melibatkan peruntukan perbelanjaan pengurusan yang besar. Justeru kerajaan telah membuat keputusan untuk menjual unit-unit PPR dan PA yang terlibat. Walau bagaimanapun setelah sekian lama program ini dilancarkan tetapi sambutan sangat kurang menggalakan. Menyedari kepentingan ini, kajian ini dijalankan untuk mengenalpasti isu dan masalah yang menyebabkan kurang sambutan terhadap program penjualan unit-unit PPR dan PA. Seterusnya mencadangkan penyelesaian yang komprehensif kepada agensi-agensi yang berkaitan aspek pendekatan terbaik untuk mengatasi permasalahan penjualan unit-unit PPR dan PA. Hasil kajian telah mengariskan beberapa strategi perancangan dan pengurusan pembangunan dan penjualan di samping cadangan penstrukturan semula dilakukan terhadap mekanisme pembiayaan. Kata Kunci: Perumahan Mampu-Milik; Perumahan Bandar; Pengurusan Pembangunan Perumahan

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1. LATAR BELAKANG KAJIAN Inisitif kerajaan menyediakan perumahan mampu-milik iaitu PPR dan PA adalah untuk menyediakan keperluan tempat tinggal yang mencukupi dan selesa dikawasan bandar. Usaha bersepadu dan agresif ini telah mula dilakukan pada semenjak negara mencapai kemerdekaan lagi. Pelbagai program telah dilakukan, antaranya adalah seperti Program Perumahan Rakyat (PPR) dan Perumahan Awam (PA). Ia merupakan satu inisiatif kerajaan untuk mengurangkan jurang pemilikan yang semakin tinggi ekoran kesan meningkatan kos ekonomi yang telah memberikan kesan langsung (direct impacts) terhadap keupayaan pemilikan rumah di kalangan golongan berpendapatan rendah. Program ini telah dilaksanakan sejak 10 tahun lalu bagi menangani permasalahan berkaitan penempatan rakyat yang tidak teratur dan mengatasi masalah kemiskinan dalam negara. Pelaksanaan program itu telah memberi harapan yang baru bagi rakyat untuk menikmati kehidupan yang lebih sempurna dan sihat. Ia juga selaras dengan hasrat dan matlamat kerajaan untuk mempertingkatkan kualiti hidup golongan berpendapatan rendah. Walaubagaimanapun, setelah sekian lama program ini dilaksanakan, Kerajaan telah menyedari timbul masalah serius dalam pengurusan PPR dan PA yang perlu ditangani dengan segera. Menyedari kepentingan untuk membantu golongan berpendapatan rendah, kerajaan telah mengarahkan Kementerian Wilayah Persekutuan dan Kesejahteraan Bandar mengemukakan kerangka cadangan penyelesaian yang komprehensif untuk mengenalpasti dan seterusnya mencadangkan kepada pihak Kerajaan pendekatan terbaik untuk mengatasi permasalahan unit-unit PPR dan PA yang bermasalah dari aspek peningkatan kos penyelenggaraan bangunan-bangunn tersebut. Ini adalah kerana sekiranya mereka terus menyewa, dikhuatiri akan menghadapi masalah kewangan dan tidak mampu membayar sewa dan caj penyelenggaraan. Kutipan caj penyelenggaraan yang tidak mencukupi akan menjejaskan kerja-kerja penyelenggaraan bangunan dan akhirnya kawasan berkenaan menjadi kawasan slum. Ini akan membebankan Kerajaan apabila terpaksa menanggung kos membaik pulih perumahan kos rendah yang melibatkan peruntukan perbelanjaan pengurusan yang besar. Selaras hubungan dengan itu kajian ini diharap dapat memberi input kepada agensi-agensi Kerajaan di bawah Pelan Transformasi Kerajaan (GTP), iaitu untuk menyediakan kemudahan perumahan yang lebih selesa bagi golongan berpendapatan rendah dan miskin. Untuk itu, kajian ini akan mengenal pasti isu dan masalah yang dihadapi oleh penyewa PPR (MTEN) dan PA (DBKL) dalam pembelian unit-unit berkaitan. Kajian ini adalah penting bagi mengenal pasti tahap keselesaan fizikal, persekitaran kawasan perumahan dan yang lebih kritikal lagi ialah keupayaan kewangan bakal pembeli (iaitu golongan penyewa sekarang) unit perumahan di bawah Program Penjualan Perumahan.

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2. OBJEKTIF KAJIAN Objektif utama kajian ini adalah untuk mengkaji keberkesanan strategi penjualan dan pengurusan pembangunan Program Perumahan Rakyat (PPR) dan Perumahan Awam (PA) yang Tidak-Terjual (unsold) dan seterusnya menghasilkan mencadangkan penambahbaikan kepada praktis semasa penjualan unit-unit PPR dan PA terlibat di Wilayah Persekutuan Kuala Lumpur. Dan sehubungan dengan itu, sub-objektif kajian ini memberi fokus kepada aspek berikut;

i. Mengenalpasti punca dan permasalah mengapa penyewa semasa dan pembeli berpotensi (berkeupayaan) kurang memberi sambutan terhadap program penjualan unit-unit PPR dan PA;

ii. Mengkaji keberkesanan aspek penjualan unit-unit PPR dan PA; iii. Mencadangkan Satu Kerangka Amalan Terbaik (Best-Practice

Framework) untuk dijadikan asas kepada agensi-agensi terlibat merangka pendekatan untuk meningkatkan penjualan unit-unit PPR dan PA yang meliputi aspek pemasaran, penggalakan dan pakej pembiayaan.

3. ULASAN KARYA 3.1 Pengenalan Asas perancangan dan pembangunan sektor perumahan di peringkat persekutuan, negeri dan tempatan yang telah digariskan di dalam Dasar Perumahan Negara (DRN) (KPKT, 2010) bertujuan menyedia kerangka halatuju pembangunan perumahan di negara ini. Adalah menjadi matlamat utama DRN adalah untuk menyediakan rumah yang mencukupi, selesa, berkualiti, dan mampu dimiliki bagi meningkatkan kesejahteraan hidup rakyat. DRN juga diperkenalkan untuk menangani isu dan cabaran yang dihadapi oleh industri perumahan pada masa kini. Isu-isu yang kompleks dan mencabar serta cabaran memerlukan penyelesaian yang cekap bagi menjamin pertumbuhan industri yang sihat dan mapan. Perumahan merupakan salah satu keperluan asas untuk memastikan kesejahteraan hidup rakyat sentiasa terpelihara. Sektor pembinaan menyumbang kepada pertumbuhan ekonomi negara yang mempunyai kaitan secara langsung dengan sektor-sektor lain, termasuk sektor perumahan, perkhidmatan dan sektor pembuatan bahan-bahan binaan.

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Globalisasi dikenalpasti sebagai salah satu faktor yang mempengaruhi proses pembangunan, ekonomi, sosial, budaya, politik dan mempercepatkan pemindahan teknologi di sesebuah negara. Perubahan yang diperolehi adalah dalam bentuk kualitatif dan kuantitatif yang meresapi agenda pembangunan negara bangsa kerana pengintegrasian isu-isu tersebut ke dalam sistem dunia. Antara perubahan atau kesan yang dihasilkan oleh globalisasi adalah terhadap struktur penduduk, jenis dan gaya pembangunan yang dirancangkan, aliran migrasi, memampatkan ruang dan masa, mewujudkan landskap pasca-moden dan geopolitik ke atas sesebuah kawasan. Struktur ruang fizikal dan budaya hidup serta aktiviti ekonomi kian berubah dan lebih kompetitif serta mampat. Perkembangan bandar-bandar yang pesat dan pertambahan penduduk bandar meningkatkan permintaan terhadap kemudahan asas antara lain seperti tempat tinggal (perumahan), kemudahan kesihatan, pengangkutan, bekalan air dan tenaga. Pengglobalan pembangunan akan merubah struktur atau perancangan pembinaan rumah yang lebih menekankan konsep tempat tinggal bercorak kondominium, apartment moden, villa dan rumah berbentuk mewah. Fenomena tersebut akan memberi dampak ke atas pembentukan struktur kelas dan tahap partisipasi antara kaum atau penduduk yang menjadi penghuni bandar. Oleh itu adalah tujuan artikel ini untuk menjelaskan pengaruh dasar perumahan negara melalui pembangunan perumahan di sesuatu kawasan yang akan memberi impak geopolitik, geoekonomi dan geososial dalam jangka masa panjang. 3.2 Dasar Perumahan Negara dan Keperluan Penyediaan Perumahan

Mampu-Milik Dalam Dasar Perumahan (DRN) iaitu Keperluan Rumah Rancangan Malaysia ke-9 (2006-2010) menyatakan:

i. Rumah sebagai keperluan asas sosial dan kerajaan mesti menyediakan rumah yang berkualiti, cukup dan mampu beli bagi semua golongan rakyat/pendapatan.

ii. Kerajaan terus membina rumah kos rendah dibawah program

Perumahan Rakyat dan Syarikat Perumahan Negara Berhad (SPNB) akan mengambil alih dan membina 29,000 rumah kos rendah dan sederhana rendah dan juga membaikpulih 11,000 unit rumah.

iii. Penglibatan sektor swasta membina rumah murah iv. Pendaftaran dan sistem pengagihan untuk rumah kos rendah

dipastikan mencapai kumpulan sasaran yang benar-benar memerlukan

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v. Dalam 2001-2005 sebanyak 844,043 unit rumah telah siap dibina, 77.6 peratus daripadanya dibina oleh syarikat swasta dan selebihnya oleh sektor awam

vi. Program Perumahan Mampu Milik, Program Perumahan Mesra

Rakyat dan perumahan bagi pegawai tentera. vii. 200,513 unit rumah kos rendah telah siap dibina atau 86.4 peratus

daripada sasaran dengan 103,219 unit (51.5 peratus) dibina oleh sektor awam

viii. Setiap pembangunan perumahan yang pelbagai 30 peratus

diwajibkan membina rumah kos rendah bagi sektor swasta ix. Rumah Kos Sederhana: Sasaran 110,700, siap 252,121 (227.8

peratus) x. Rumah Kos tinggi (mahal) - sasaran 125,000, siap 297,483 (238.0

peratus) (Malaysia, 2006). 3.3 Dasar Pemilikan Perumahan Mampu Milik Terdapat banyak masalah yang berkaitan mengenai perumahan yang menyebabkan kajian mengenainya adalah penting dan usaha untuk mengatasinya sama ada oleh swasta dan kerajaan haruslah dijadikan sebagai satu agenda yang terpenting. Masalah perumahan yang dihadapi kesan daripada proses urbanisasi memaksa negara membangun jalan bagi menangani masalah yang semakin meruncing. Antara usaha yang dijalankan kerajaan ialah membentuk dasar-dasar awam, khususnya dasar perumahan yang memberi tumpuan kepada kaedah meningkatkan pengeluaran perumahan bagi menyelesaikan masalah perumahan. Pada masa yang sama, perbahasan tentang dasar perumahan sejak akhir-akhir ini didominasi oleh kritikan terhadap perubahan dasar yang mengarah kepada strategi meningkatkan pemaju swasta dalam pemajuan perumahan kos rendah. Penyediaan perumahan kos rendah melalui penglibatan pemaju swasta bermula tahun 1980an. Penglibatan pemaju swasta dalampemajuan perumahan kos rendah dikukuhkan melalui pendekatan pemudahcara. Pelaksanaan pendekatan pemudah cara adalah didorong oleh kegagalan pendekatan lalu seperti program perumahan awam dan program pertapakan dan perkhidmatan dalam memenuhi keperluan golongan berpendapatan rendah. Namun yang menimbulkan perdebatan hangat ialah pelaksanaan pendekatan pemudah cara didakwa terlalu memberi tumpuan kepada meningkatkan penglibatan pemaju swasta dan mengabaikan peranan sektor tidak formal, komuniti dan badan koperasi yang sebelum ini berperanan penting dalam menyediakan perumahan untuk golongan berpendapatan rendah. Pendekatan pemudah cara juga didakwa mengabaikan matlamat keadilan dan kelangsungan (Besar, J.A., et.al, 2012).

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3.4 Program Penjualan Perumahan PPR dan PA

3.4.1 Isu Tunggakan dan Masalah Penyelenggaraan Dalam Buku Informasi Jabatan Pengurusan Perumahan DBKL 2011 (DBKL 2011), antara syarat sewa rumah ialah pendapatan terkumpul suami/isteri hendaklah tidak melebihi RM2,000.00 (untuk unit kos rendah). Bagi kos sederhana rendah, pendapatan mereka tidak melebihi RM3,500.00. Jadual berikut menunjukkan pecahan responden mengikut tahap pendidikan. Maklumat tahap pendidikan tertinggi adalah penting dalam kajian ini bagi menjawab isu tunggakan bayaran sewa dalam kalangan penghuni. Berdasarkan maklumat buku informasi DBKL (2011), jumlah tunggak Rumah Jual, PPR & PA sehingga Oktober 2010 ialah kira-kira RM69 juta (Jadual 3.1).

Jadual 3.1: Tunggakan Rumah Sewa dan Jual sehingga Oktober 2010 (RM juta)

Punca Isu Tunggakan Tarikh Rumah

Jual Rumah

PPR Rumah Awam Jumlah

1 Tunggakan lama pada 1/1/2010 19.8 21.9 15.6 57.3

Bayaran bagi tunggakan sehingga 31-10/2010 2.3 2.2 1.4 5.9

Baki tunggakan lama sehingga 31/10/2010 17.5 19.7 14.2 51.4

2 Caj semasa Jan-Oktober 2010 4.8 41.1 29 74.9

Bayaran semasa 2.7 31.3 23.6 57.6

Baki tunggakan semasa pada 31/10/2010 2.1 9.8 5.4 17.3

3

(A+B) Jumlah tunggakan sehingga

31/10/2010 19.6 29.5 19.6 68.7

Sumber: Buku Informasi DBKL (2011)

Untuk strukur pendapatan responden adalah mengikut kategori kemiskinan yang ditentukan oleh kerajaan. Jadual berikut menunjukkan kategori kemiskinan mengikut julat pendapatan:

i. Miskin tegar, kurang daripada RM500.00/bulan ii. Miskin, RM501-RM1,000/bulan iii. Pendapatan rendah, RM1,001-RM2,000/bulan iv. Pendapatan menengah rendah, RM2,001-RM3,000/bulan v. Pendapatan menengah rendah, RM3,001-RM4,000/bulam vi. Pendapatan tinggi, lebih RM4,000

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3.4.2 Impak Persekitaran dan Fizikal Terhadap Pembelian Unit-unit

PPR dan PA Aspek tahap kebolehsediaan (availability) perkhidmatan dan kemudahan yang disediakan di kawasan perumahan juga diberi perhatian di dalam kajian ini. Untuk itu, wajar diambil perhatian bahawa penyediaan rumah sebagai keperluan asas tidak dapat dipisahkan daripada usaha untuk menyediakan kemudahan, perkhidmatan serta kejiranan bagi menjamin penduduk mencapai tahap kualiti hidup yang diharapkan. Komponen ini antaranya ialah bekalan air bersih dan elektrik, penyediaan (aspek peletakan) sekolah, aksesibiliti ke tempat kerja, pengangkutan awam, dan kemudahan keselamatan. Di samping keperluan berbentuk fizikal, penduduk juga memerlukan aktiviti sosial dan kejiranan untuk menghasilkan komuniti yang sihat, peka terhadap hal ehwal dalam komuniti.

3.4.3 Isu Penjualan Unit PPR dan PA Kerajaan telah membuat keputusan untuk menjualan Merujuk kepada Sebagai latarbelakang kajian ini, Kementerian Wilayah Persekutuan (KWP) melalui Dewan Bandaraya Kuala Kumpur (DBKL) serta Yayasan Wilayah Persekutuan (YWP) dalam proses penjualan rumah Projek Perumahan Rakyat (PPR) dan Perumahan Awam (PA) kepada penyewa-penyewa sedia ada bagi membolehkan rakyat di Bandaraya Kuala Lumpur memiliki kediaman sendiri. Ini adalah selaras dengan keputusan Jemaah Menteri dalam Mesyuaratnya pada 30 Mei 2007 bersetuju supaya Program Perumahan Rakyat Majlis Tindakan Ekonomi Negara (PPR, MTEN) dijual dengan harga RM35,000.00 seunit dan Perumahan Awam DBKL (PA, DBKL) dijual dengan

Rajah 3.1: Kerangka konsepsual Impak Aspek Sosial dan fizikal Kondisi Program Perumahan Terhadap Keinginan Pemilikan Rumah

Umur - Demografi -

Tahap Pendidikan - Sumber Pendapatan -

Taraf Perkahwinan - Pekerjaan -

Jantina -

Tahap keselesaan fizikal persekitaran unit kediaman mempengaruhi tahap kesejahteraan hidup penyewa dan baal pembeli. Gabungan faktor-faktor ini sangat mempengaruhi dorongan untuk membeli unit terlibat sama ada dari penyewa semasa ataupun pembeli luar.

Kemampuan Membayar

Kepuasan Fizikal Bangunan Kepuasan Persekitaran Prasarana

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harga di antara RM21,500.00 sehingga RM35,000.00 mengikut syarat-syarat yang ditetapkan. Pada asalnya, perlaksanaan PPR/PA di negara ini adalah bertujuan membantu golongan berpendapatan rendah dan miskin memiliki tempat tinggal yang murah, teratur, selesa dan selamat. Majoriti unit-unit rumah PPR/PA yang dikendalikan oleh DBKL adalah untuk disewa kepada penduduk setinggan, golongan yang berpendapatan rendah, dan penduduk yang terlibat dengan perpindahan sementara (transit). Sewa yang dikenakan pula adalah rendah dan berpatutan. Sejak program penjualan ini dimulakan (Mei, 2007) sehingga Oktober 2017 (rujuk Jadual 3.2) hanya lebih 700 pembeli berjaya mendapatkan pinjaman dari pihak bank dan institusi kewangan. Masalah utama yang dihadapi oleh kebanyakan bakal pembeli adalah untuk mendapatkan pinjaman dari pihak bank ataupun daripada institusi kewangan. Justeru untuk mengatasi permasalahan yang dihadapi oleh bakal pembeli, satu skim khas telah dirangka oleh pihak KWP dengan kerjasama DBKL dan Yayasan Wilayah Persekutuan (YWP) serta telah mendapat kelulusan terakhir daripada Jemaah Menteri pada Januari 2012. Berdasarkan rekod penjualan unit-unit PPR dan PA, sehingga Oktober 2017, sebanyak 16,822 unit (37%) keseluruhan unit-unit ini telah dijual daripada keseluruhan 45,357 unit yang ditawarkan (KWP, 2018). Walau bagaimanapun jumlah ini masih rendah dan tidak mencapai sasaran jualan yang telah ditetapkan walaupun harga yang ditawarkan amat rendh jika dibandingkan dengan nilai hartanah semasa di lokasi terlibat. Taburan statistik terkini pencapaian penjualan unit-unit PPR (MTEN) dan PA (DBKL) mengikut skim-skim perumahan yang terdapat di Kuala Lumpur adalah seperti di Jadual 3.2. Bagaimanapun, di atas keperihatinan Kerajaan, Jemaah Menteri telah meluluskan cadangan Penjualan Perumahan PPR & PA di Kuala Lumpur (Ogos 2009). Pelaksanaan penjualan ini adalah bertujuan merealisasikan hasrat Kerajaan untuk:

i. Membantu golongan berpendapatan rendah memiliki rumah sendiri di bawah konsep “Satu Keluarga Satu Rumah”;

ii. Memberi peluang kepada penyewa membeli rumah yang diduduki;

dan

iii. Menyediakan rumah mampu milik kepada golongan berpendapatan rendah di Wilayah Persekutuan Kuala Lumpur.

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Jadual 3.2: Rumusan Terkini Penjualan PPR (MTEN) dan PA (DBKL) (Sehingga 30 Oktober 2017)

Bil Perkara Jumlah Unit Parlimen

Bandar Tun Razak Cheras Lembah

Pantai Seputeh Batu Kepong Setia Wangsa

Titi Wangsa

Wangsa Maju

1 PA DBKL & PPR MTEN Yang Dijual 45,357 15,600 948 5,932 632 10,450 948 7,498 1,875 1,474

2 Jumlah Permohonan Untuk Membeli 29,382 8,555 902 4,288 480 6,692 0 5,613 1,640 1,212

3 Kekal Menyewa + Borang Tidak Dikembalikan 15,975 7,045 46 1,644 152 3,758 948 1,885 235 262

4 Kategori Layak 28,506 8,319 887 4,166 474 6,450 0 5,423 1,599 1,188

5 Kategori Layak Bersyarat (Mempunyai Tunggakan) 627 166 11 86 5 167 0 151 21 20

6 Kategori Tidak Layak (Tidak Memenuhi Syarat Kelayakan) 249 70 4 36 1 75 0 39 20 4

7 Surat Tawaran Dikeluarkan (Untuk Kategori Layak)

(Nota : Maklumbalas yang diterima selepas surat tawaran dikeluarkan) 28,506 8,319 887 4,166 474 6,450 0 5,423 1,599 1,188

1) Setuju 22,524 6,355 733 3,160 376 5,194 0 4,351 1,416 939 2) Tidak Setuju 112 45 1 20 4 23 0 14 3 2

3) Tiada Maklumbalas 5,870 1,919 153 986 94 1,233 0 1,058 180 247

8 Telah Menandatangani Perjanjian Jual Beli (DBKL) 14,304 4,230 428 2,156 237 3,083 0 2,731 973 466

9 Telah Menandatangani Perjanjian Jual Beli (SPWP) 5,810 1,700 271 666 67 1,212 0 1,109 325 460

Jumlah Telah Tandatangan Perjanjian (DBKL+SPWP) 20,114

10 Surat Pemilikan Kosong (DBKL) 11,200 3,142 410 1,671 233 2,617 0 2,034 703 390

11 Surat Pemilikan Kosong (SPWP) 5,622 1,659 256 626 66 1,186 0 1,077 322 430

Jumlah Telah Dikeluarkan Pemilikan Kosong (DBKL+SPWP) 16,822

12 Dalam Proses Menguruskan Pembelian Rumah 3,292 1,129 33 525 5 492 0 729 273 106

Sumber: Kementerian Wilayah Persekutuan dan Kesejahteraan Bandar (KWP), 2018.

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Ini merupakan kali kedua Kerajaan melancarkan program penjualan perumahaan awam yang disewakan di kawasan Kuala Lumpur. Terdahulu, pada 23 Mac 1983, Jemaah Menteri telah meluluskan supaya penghuni yang telah menyewa rumah 10 tahun atau lebih dan telah menjelaskan sewa rumah dengan sempurna layak membeli rumah yang dibina oleh DBKL di bawah Skim Sewa-Beli. Bayaran sewa yang telah dibayar sebelumnya juga dikira sebagai bayaran pendahuluan bagi pembelian rumah tersebut. Mulai 1 Julai 1983, DBKL telah mula menjual rumah-rumah yang disewakan. Antara kawasan yang terlibat dengan skim penjualan ini adalah seperti di Jadual 3.3 dan Jadual 3.4 (juga lihat Rajah 3.2). Jadual 3.3: Penjualan PA DBKL di Bawah Skim Sewa-Beli

Bil. Kawasan Perumahan Jumlah unit dijual

Jumlah Unit

Disewa

Harga Jualan (RM) Penjualan dihentikan 1 bilik 2 bilik 3 bilik

1. Flat Pekeliling* 404 2591 15,700 19,200 - 1985

2. Seri Pulau Pinang 722 536 12,700 22,000 - 1994

3. Seri Melaka 4D 137 1057 - 25,000 - 1994

4. Jalan Loke Yew 555 452 - 21,500 20,900 1989

5. Jalan Hang Tuah /Jalan Shaw 475 308 12,800 15,900 1989

6. Razak Mansion 557 100 12,400 34,000 - 1994

7. Seri Negeri Sembilan 65 722 17,000 25.000 - 1994

JUMLAH KESELURUHAN 2915 5766

Nota*: Unit rumah di Flat Pekeliling kini dikosongkan untuk dirobohkan dan semua penghuni dipindahkan ke Perumahan Awam Desa Rejang. Sumber: DBKL, 2011 Bagaimanapun, pada April 1994, Jemaah Menteri telah bersetuju supaya penjualan unit-unit perumahan awam DBKL tidak diteruskan lagi untuk mengelakkan kawasan perumahan awam menjadi slum di bandaraya Kuala Lumpur. Keputusan untuk melaksanakan kembali program penjualan PPR/PA di ibukota adalah lanjutan daripada keprihatinan Kerajaan serta permintaan daripada penyewa terbabit. Bagaimanapun, sejak pelancaran program tersebut dan sehingga 30hb. November 2011, bilangan penghuni yang telah menandatangani Perjanjian Jual-Beli adalah berjumlah 6,015 daripada 25,005 penghuni yang berminat atau kira-kira 24%. Jika bilangan yang telah menandatangani Perjanjian Jual-Beli tersebut dibandingkan dengan jumlah bilangan unit yang diputuskan Kerajaan untuk dijual, iaitu 44,146 unit, maka peratusan yang membeli ialah kira-kira 13%. Berdasarkan kajian yang dilakukan oleh pihak DBKL (2011) peratusan pembeli yang rendah sejak pelancaran program ini membimbangkan

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Kerajaan, justeru dua siri bancian telah dijalankan oleh Jabatan Pengurusan Perumahan (JPP), DBKL bagi mengenalpasti punca sebenar bakal pembeli. Bancian pertama telah diadakan pada 27hb. Ogos 2010 hingga 25hb. September 2010 yang 11,661 borang soalselidik telah diedarkan dari rumah ke rumah tanpa bersemuka bersama penghuni. Daripada hasil bancian, sebanyak 5,082 (44%) borang telah dikembalikan manakala 6,579 (56%) borang tidak dikembalikan. Bagaimanapun, maklumat bancian yang tepat dan jelas tidak diperolehi. Justeru, bancian kedua secara bersemuka dari unit ke unit telah diadakan serentak di 37 kawasan perumahan pada 12hb. Februari 2011. Sebanyak 7,644 unit dibanci (daripada 11,957 yang mengesahkan menerima tawaran membeli, hanya 4,313 sahaja yang telah menandatangani perjanjian jual-beli dan bakinya 7,644 masih belum memuktamadkan pembelian) dan dapat dibahagikan kepada 5 kumpulan penyewa seperti Jadual 3.4. Jadual 3.4: Agihan Kategori Penyewa Perumahan PPR dan PA

Kumpulan Catatan Bil. Peratusan

(drp 7,644)

1

Tidak Berkemampuan (tidak layak pinjaman, umur melebihi 50 tahun, tiada sumber pendapatan & kekal menyewa)

2,130

28%

2

Tidak Berkemampuan (ada tanggungan, muda, tiada sumber pendapatan & sumber pendapatan tidak mencukupi)

1,853

24%

3

Berkemampuan tetapi Tidak Layak (disenarai hitam & ada rumah kedua)

249

3%

4

Berkemampuan & sedang menunggu pengesahan

1,891 25%

5

Tiada di rumah

1,521 20%

Jumlah

7,644 100%

Sumber: DBKL 2011

Pada masa yang sama, bancian DBKL juga mendapati hanya 25% penyewa yang mampu dan ada sumber kewangan tetapi sedang menunggu pengesahan daripada pihak berkaitan (antaranya bank dan KWSP). Lanjutan daripada hal tersebut, bancian DBKL juga mendapati bahawa terdapat sejumlah 1,174 penghuni yang cuba mendapatkan pembiayaan bank tetapi hanya 19 pemohon sahaja atau kurang daripada 2% yang didapati layak untuk mendapat pinjaman. Oleh itu, masalah pinjaman bank juga turut menyumbang kepada kurangnya sambutan terhadap program penjualan unit PPR/PA.

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Jadual 3.5: Statistik Kaedah Pembiayaan Pembelian oleh Penyewa

Cara Pembiayaan Jumlah

- 4566 Bank 1174 Koperasi 2 KWSP 408 Pencen 48 Pinjaman Kerajaan 25 Tabung Haji 1290 Tunai 131

Jumlah Keseluruhan 7644 Sumber: DBKL, 2011

3.4.4 Penubuhan SPV Untuk Merangsang Penjualan Menyedari tentang kesulitan dan keluhan penghuni PPR/PA dalam mendapatkan pinjaman daripada institusi kewangan, maka Kerajaan telah menyarankan penubuhan Skim SPV yang dinaungi oleh Yayasan Wilayah Persekutuan . Skim ini memberi pinjaman 100% dan jumlah bayaran balik setiap bulan adalah tidak melebihi RM300.00. Berdasarkan kajian DBKL, adalah perlu bahawa sesuatu skim yang ingin dicadangkan perlulah mengenakan bayaran balik bulanan pinjaman yang rendah sesuai dengan keupayaan golongan yang menyewa di PPR/PA yang majoritinya adalah golongan miskin dan “mudah miskin”. Sebarang bayaran balik bulanan pinjaman yang tinggi mungkin akan menyebabkan permasalahan pembelian ini kembali ke tahap asal. 4. METODOLOGI KAJIAN Pengumpulan dan Sampel Kajian_Pemilihan sampel kajian adalah terdiri daripada ketua isirumah (KIR) unit PPR atau PA yang dipilih secara rawak daripada 500 unit daripada jumlah setiap unit rumah di PPR dan PA yang dikenalpasti sebagai responden. Atas beberapa fakor yang tidak dapat dielakkan jumlah responden yang dapat ditemubual hanyalah seramai 473 orang sahaja. Lokasi sampel kajian adalah di kawasan PPR dan PA yang representable dengan objektif kajian. Kriteria pemilihan responden berdasarkan feedback daripada hasil Post-Mortem dan maklumat semasa dari agensi pengurusan unit-unit ini (DBKL dan MTEN) mengenai Program Penjualan Rumah PPR dan PA (dan juga berdasarkan hasil Kajian Rintis yang telah dilakukan di awal penyedian cadangan kajian) iaitu lokasi perumahan yang menunjukkan minat paling tinggi untuk membeli dan paling tidak berminat untuk membeli.

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Analisis data kajian_Maklumat kajian diperolehi dengan menemubual responden. Borang soal selidik yang telah siap dianalisis. Maklumat mengenai latar belakang responden juga perlu dikumpulkan melalui borang soal selidik. Pengendalian sesi temu bual adalah selama 20 hingga 30 minit bagi setiap responden. Analisis data menggunakan program Statistical Package for Social Science (SPSS) for Windows. Statistik deskriptif dalam bentuk peratusan piawai telah digunakan untuk menghuraikan pembolehubah yang diukur. Kajian Lapangan_Pemilihan kawasan kajian untuk kerja lapangan utama berdasarkan pensampelan rawak mengikut kawasan PPA/PR.. Skop soalselidik merangkumi aspek aspek berikut yang diperlukan untuk menjawab persoalan kajian, iaitu:

A. Profil Responden B. Status Penginapaan Terakhir C. Isu pemilikan tanah, aspek keupayaan pembiayaan pembelian dan

kelayakan pembeli. D. Kemudahan Asas Perkhidmatan & isu aspek Penyelenggaraan

Bangunan. E. Perbelanjaan Isirumah dan Keupayaan Kewangan. F. Persepsi penghuni dan bakal pembeli terhadap unit-unit

perumahan PPR & PA. Untuk mendapat in-depth analysis mengenai isu kritikal yang dinyatakan dalam objektif kajian, penyelidik telah menghadiri beberapa bengkel berkaitan pengurusan perumahan mampu-milik yang telah dianjurkan oleh Jabatan Perumahan Negara (JPN) dan beberapa agensi lain di bawah Kementerian Kesejahteraan Bandar, Perumahan dan Kerajaan Tempatan (KPKT). Penyelidik juga telah mengadakan perbincangan yang terperinci dengan wakil institusi perbankan untuk mendapat penjelasan tentang isu-isu berkaitan kesukaran perolehan pembiayaan yang dihadapi oleh sebahagian penyewa semasa yang telah ditawarkan untuk membeli rumah yang dipromosikan oleh kerajaan tetapi kurang mendapat sambutan. 5. RUMUSAN PENEMUAN KAJIAN Tujuan tinjauan lapangan di kawasan/skim PPR (MTEN) dan PA (DBKL) adalah untuk mendapatkan gambaran jelas dan untuk mengenalpasti permasalahan dan isu yang dihadapi oleh penyewa semasa berkaitan pembelian rumah PPR/PA. Secara ringkasnya senario isu kurang sambutan terhadap program penjualan unit-unit PPR dan PA oleh kerajaan bermula apabial unit-unit PPR dan PA mula memberi bebanan peningkatan kos penyelenggaraan bangunan yang semakin meningkat kesan daripada masalah tunggakan sewa yang terlalu tinggi. Ekoran daripada isu tersebut, kerajaan telah membuat keputusan untuk menjual sejumlah 44,146 unit PPR dan PA di 39 kawasan perumahan yang telah diputuskan oleh kerajan (2009)

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untuk dijual. Daripada jumlah itu, sejumlah 35,095 penyewa telah di tawarkan membeli, dan 24,677 berminat untuk membeli dengan 22,405 telah dikeluarkan surat tawaran. Daripada jumlah tersebut hanya 11,957 mengesahkan menerima tawaran membeli tetapi hanya 4,313 sahaja yang telah menandatangani perjanjian jual beli dan bakinya 7,644 masih belum memuktamadkan pembelian. Sehubungan kajian lapangan ini dilakukan bertujuan untuk mengenalpasti punca sebenar isu dan masalah yang menyebabkan kurang sambutan terhadap program penjualan unit-unit PPR dan PA. Bancian telah dijalankan secara serentak di kesemua kawasan PPR /PA yang terlibat dengan program penjualan. Disebabkan kekangan masa dan kos, hanya 473 (sasaran asal 500 responden_27 not valid) responden daripada kawasan perumahan PPR dan PA yang terlibat ditemubual. Penemuan utama kajian mendapati bahawa:

i. 28% tidak mampu, tidak layak bank dan lanjut umur (>50 tahun). ii. 24% tidak mampu, ada tanggungan, muda, tiada sumber, tidak

cukup sumber (ibu/bapa tunggal, keluarga penganggur, tiada pendapatan tetap).

iii. 3% mampu, ada sumber, tidak layak (disenarai hitam, rumah

kedua). iv. 25% mampu, ada sumber, tunggu pengesahan ( bank, KWSP

dan lain-lain). v. 20% tiada maklumbalas.

Maklumbalas yang diterima daripada penyewa:

i. Pembeli enggan berurusan dengan pihak bank kerana terlalu banyak syarat dan khuatir rumah dilelong kerana pendapatan penyewa yang tidak tetap.

ii. Mencadangkan penggubalan satu mekanisme untuk membantu

(facilitate) bakal pembeli untuk memperolehi kemudahan pinjaman/pembiayaan.

iii. Penyewa tidak mahu meneruskan pembelian kerana masalah

fizikal unit disewa seperti kerosakan lif, resapan, kalis air dan kebocoran yang masih belum dibaiki, masalah tempat letak kereta dan lain-lain lagi.

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Secara keseluruhannya rumusan kajian lapangan mendapati;

i. sebahagian besar responden (68%) atau penyewa terdiri daripada golongan yang tidak berkemampuan serta enggan berurusan dengan pihak bank kerana syarat-syarat dan risiko yang tinggi dan kebanyakan daripada golongan ini kurang mempunyai maklumatdan pengetahuan mengenai proses perolehan pembiayaan, maklumat unit untuk disewa, syarat-syarat pemohonan dan lainlain berkaitan proses pembelian unit-unit PPR/PA.

ii. 32% golongan berkemampuan, ada sumber dan sedang menunggu

keputusan kemudahan pembiayaan (bank, KWSP, pencen dan lain-lain).

Sebagai ringkasan, didapati bahawa daripada 473 unit dibanci, 6 kategori penyewa telah dikenalpasti seperti berikut.

Kategori 1 (28%) Tidak mampu, tidak layak bank, tiada sumber,lanjut umur, tiada tanggungan

Kategori 2 (24%) Tidak mampu,ada tanggungan, muda, tiada sumber, sumber tidak cukup(ibu tunggal, keluarga tiada sumber)

Kategori 3 (3%) Mampu,ada sumber, dalam proses (bayaran tunai, tukar nama, tambah nama,Tangguh tunggu KWSP/Pencen/Pengesahan Pinjaman Oleh Bank)

Kategori 4 (25%) Mampu, ada sumber,tidak layak (blacklist)

Kategori 5 (20%) Mampu, ada sumber,tidak layak (rumah ke-2)

Kategori 6 (2%) Kekal Sewa

Daripada 473 responden yang ditemubual, 65% penyewa terdiri daripada golongan yang tidak berkemampuan serta enggan berurusan dengan pihak bank. Ini kerana golongan ini merupakan golongan yang telah lanjut usia, tiada sumber, sumber pendapatan tidak cukup, ibu/bapa tunggal, di senarai hitam dan mempunyai rumah kedua serta mereka yang memilih untuk kekal menyewa. Pihak institusi kewangan mengenakan syarat-syarat yang agak ketat iaitu pendapatan penyewa mestilah tidak kurang daripada RM1,000.00 sebulan untuk membolehkan pembeli membuat permohonan pembiayaan serta menetapkan bahawa hanya pembiayaan pembelian bagi rumah yang pertama sahaja dipertimbangkan. Manakala lebih kurang 25% responden (penyewa) adalah golongan berkemampuan, ada sumber, dalam proses pertukaran nama, tambah nama, bayaran tunai, sedang menunggu keputusan bank, KWSP, pencen dan lain-lain. Bagi memastikan program penjualan unit perumahan PPR dan PA ini dapat dilaksanakan dengan lebihberkesan, kengkangan dan masalah yang

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dihadapi oleh penyewa di PPR (MTEN) dan PA (DBKL) perlu diperhalusi. Suatu kerangka Strategi Pengurusan Penjualan yang Komprehensif yang melibatkan 4 peringkat utama telah dicadangkan. Rumusan Isu Kurang Sambutan terhadap Program Penjualan Unit PPR dan PA Dapatan kajian mendapati bilangan penghuni yang telah menandatangani Perjanjian Jual-Beli adalah berjumlah 6,015, atau 24% daripada penghuni-penghuni yang menyatakan minat untuk membeli (25,005 penyewa). Pada masa yang sama, terdapat sebahagian daripada golongan yang ingin terus menyewa (10,201 orang), yang mungkin berminat untuk membeli jika terma-terma Perjanjian Jual-Beli adalah lebih mesra pelanggan daripada yang dikenakan sekarang. Analisis kajian mendapati, golongan penyewa semasa yang berminat untuk membeli boleh dibahagikan kepada lima (5) kategori;

i. Kategori Mampu Beli i. Kategori Miskin ii. Kategori yang Mempunyai Tunggakan Sewa iii. Kategori yang Sudah Memiliki Rumah Kedua iv. Kategori yang disenarai-hitamkan

6. SYOR DAN CADANGAN UNTUK MENINGKATKAN PENJUALAN UNIT PPR DAN PA 6.1 Memperkenalkan mekanisma pinjaman kewangan baru Pendekatan Kerajaan yang menggalakkan penyewa untuk membeli unit kediaman masing-masing adalah suatu objektif yang baik tetapi pendekatan ini haruslah diimbangi dengan keupayaan pembeli untuk terus membayar pinjaman perumahan yang dibuat. Apa-apa mekanisma kewangan yang dicadangkan, termasuk skim SPV mestilah tidak membebankan peminjam. Hanya pembeli yang mempunyai tahap kewangan yang baik sahaja yang patut diberi pinjaman manakala yang tidak mampu tidak seharusnya digalakkan membeli. Ini bagi mengelakkan rumah pembeli dirampas, justeru menafikan matlamat asal penyediaan perumahan PPR & PA, iaitu membantu golongan miskin mempunyai tempat tinggal di bandar. Senario di mana rumah PPR & PA dirampas oleh pihak peminjam daripada mereka yang miskin akan memberikan gambaran yang negatif kepada pihak Kerajaan yang menggalakkan mereka ini meminjam diluar kemampuan mereka. Justeru kajian mencadangan;

i. Skim SPV diolah dengan mengenakan kadar pinjaman pada yang lebih rendah daripada kadar yang dikenakan oleh institusi pembankan.

ii. Pinjaman merangkumi dua generasi terus digalakan.

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6.2 Meningkatkan kemampuan pemilikan Berdasarkan dapatan dan perbincangan mengenai tahap kemampuan dan faktor yang mempengaruhi kemampuan pemilikan rumah oleh golongan berpendapatan rendah di perumahan awam Kuala Lumpur, dapat disimpulkan kemampuan pemilikan bersifat kompleks dan melibatkan integrasi antara faktor kemampuan pemilikan untuk memastikan isi rumah terus berupaya mengukuhkan dan meningkatkan kemampuan kewangan untuk pembiayaan pemilikan rumah. 6.3 Meningkatkan Pendapatan KIR Salah satu kaedah menangani isu kemampuan adalah melalui peningkatan pendapatan. Peningkatan pendapatan dapat dilakukan melalui kerja tambahan dan kerja sampingan. Namun kerja tambahan sangat bergantung kepada pasaran ekonomi semasa kerana ekonomi yang tidak stabil cenderung menyebabkan isi rumah kehilangan kerja tambahan. 6.4 Meningkatkan Tahap Kemahiran ahli Isi Rumah Selain itu, peningkatan pendapatan boleh dilakukan melalui peningkatan kemahiran. Sehubungan itu, langkah DBKL untuk mengadakan program menjana ekonomi seharusnya dipertingkatkan dari sudut kuantiti dan kualiti program. Program DBKL melibatkan kursus urutan refleksologi, kursus jahitan, kursus memasak, kursus pembuatan aneka pastri, kursus gunting rambut, dan pelbagai lagi. Pemantauan terhadap keberkesanan program dilihat signifikan untuk menganalisa kelemahan dan kekuatan sesuatu program agar penambahbaikan dapat dilakukan ke arah memaksimakan impak positif program kepada isi rumah terutama bagi meningkatkan pendapatan. 6.5 Meningkatkan Kemahiran Pengurusan Kewangan Sekiranya isu kemampuan dilihat dalam konteks yang lebih holistik, kemampuan juga perlu ditangani seiring pengisian pengetahuan dan ilmu mengurus dan merancang kewangan. Golongan berpendapatan rendah perlu didedahkan tentang ilmu pengurusan kewangan bagi memastikan tidak berlakunya ketirisan dalam perbelanjaan selain memastikan perbelanjaan yang dilakukan mengutamakan keperluan daripada kemahuan. Ilmu kewangan juga meliputi ilmu pembiayaan kewangan atau pinjaman perumahan. Jika di negara maju seperti Amerika Syarikat dan Jerman, sebelum pinjaman perumahan diberikan, peminjam perlu atau wajib mengikuti kursus atau program kewangan yang menyentuh aspek perancangan dan pengurusan kewangan. Kursus kewangan yang dijalankan berupaya memberi pengetahuan dan gambaran jelas kepada peminjam untuk merancang kewangan dan memastikan kemampuan yang mampan iaitu peminjam dapat membayar pinjaman perumahan secara konsisten setiap bulan disamping berkemampuan menjelaskan kos bukan perumahan yang diperlukan seharian. 6.6 Memberikan Kursus/Kemahiran Pengurusan Hutang

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Cadangan ini diperkukuh dengan gesaan Agensi Kredit dan Pengurusan Kewangan (AKPK) supaya masyarakat umum didedahkan dengan pengetahuan dan ilmu pengurusan kredit dan kewangan yang tepat dan terbaik. AKPK mendapati kekurangan maklumat dalam pengurusan kewangan peribadi menjadi faktor utama majoriti isi rumah samada warga muda dan tua dibelenggu hutang hingga menjejaskan pembayaran pinjaman rumah dan pinjaman lain. Isu kemampuan pemilikan berkait rapat dengan pengurusan kewangan isi rumah. Tanpa pengurusan kewangan terbaik, isi rumah cenderung tidak mampu memiliki rumah dan membiayai pinjaman perumahan secara konsisten. Sehubungan itu, permasalahan kemampuan dan kewangan isi rumah memerlukan penglibatan aktif agensi seperti AKPK dalam memberikan khidmat nasihat dan kaunseling tentang hal ehwal kewangan. Penyebaran pendidikan kewangan dan pengetahuan pengurusan kewangan secara bijak berupaya meningkatkan kemampuan pemilikan rumah disamping meningkatkan kesejahteraan hidup dengan aspek sosioekonomi yang stabil (AKPK, 2015). Pendedahan pengetahuan terhadap aspek pengurusan kewangan dapat membantu golongan penyewa/pembeli unit-unit PPR dan PA untuk merancang perbelanjaan disamping menguruskan pinjaman dengan efektif. 6.7 Mengadakan Pusat Informasi Setempat (One Stop Centre) Dalam menangani isu kemampuan golongan berpendapatan rendah, kerajaan juga perlu memberi tumpuan kepada golongan berpendapatan menengah untuk memastikan golongan ini mendapat akses kepada pemilikan rumah sesuai dengan kemampuan dan pendapatan mereka. Jika perhatian kurang diberikan untuk membantu golongan ini mendapat akses segalan informasi perlu berkaitan aspek pemilikan rumah, golongan berpendapatan menengah mencari ruang mendapatkan pemilikan dan penyewaan rumah yang sepatutnya ditawarkan kepada kelas pendapatan rendah. Hal ini secara tidak langsung akan menyebabkan golongan berpendapatan rendah menghadapi kesukaran mendapat akses kepada pemilikan rumah. Keadaan yang berlaku di China melalui kajian Niu (2008) mengukuhkan kenyataan ini. Harga rumah yang tinggi di bandar utama didorong kurang pemantauan daripada pihak kerajaan menyebabkan golongan berpendapatan menengah dan golongan berpendapatan tinggi mengambil kesempatan membeli rumah bersubsidi kerajaan yang ditawarkan kepada golongan berpendapatan rendah bagi mengaut keuntungan. Penilaian kepada syarat dan kriteria kelayakan perumahan awam juga dianggap salah satu langkah mengatasi kemampuan pemilikan rumah oleh golongan berpendapatan rendah. 6.8 Menubuhkan Tabungan Khas seperti Tabung Haji untuk membiayan pembelian rumah Disamping itu, dalam menangani isu kemampuan pemilikan rumah, intervensi kerajaan amat diperlukan melalui penyediaan perumahan bersubsidi dalam membantu golongan berpendapatan rendah terutama di bandar. Pembinaan lebih banyak unit rumah dalam program PA dan PPR memberi ruang kepada lebih ramai golongan berpendapatan rendah memiliki rumah dan memastikan kemampuan perumahan dan kos sara hidup yang lebih mampan. Pemilikan

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rumah dengan harga bersubsidi dapat mengurangkan kos perumahan golongan berpendapatan rendah. Misalnya kadar sewa rumah di pasaran dengan harga RM800 sebulan dapat dikurangkan kepada RM400 untuk bayaran bulanan untuk pembelian rumah. Melalui pengurangan kos perumahan, baki pendapatan dapat digunakan untuk perbelanjaan lain yang lebih penting seperti pendidikan anak, kesihatan dan pengangkutan. Dengan adanya lebihan pendapatan, kemampuan golongan berpendapatan rendah ini dapat ditingkatkan secara tidak langsung meningkatkan kuasa beli atau purchasing power golongan ini. Peningkatan kuasa beli secara tidak langsung dapat mengukuhkan ekonomi domestik negara. 6.9 Mengkordinasikan pengurusan PPR di bawah satu entiti

pengurusan Berdasarkan rumusan kajian di dalam jangka panjang, pihak Kerajaan perlu memikirkan usaha untuk mewujudkan satu entiti khusus yang mengurus dan menyenggara PPR/PA kerana tanggungjawab mengurus dan menyenggara lebih 70,000 unit rumah adalah merupakan satu tugas yang berat. Struktur Pengurusan DBKL yang terlalu besar akan menyumbang kepada ketidakberkesanan dalam mengurus dan menyenggara PPR/PA. Merujuk kepada hasil maklumbalas daripada temubuab wakil-wakil Pengerusi Perumahan, DBKL, KWPKB dan penghuni-penghuni rumah bahawa wujud rasa ketidakpuasan yang tinggi oleh penghuni terhadap keupayaan penyelenggaraan unit PPR oleh DBKL. Penguatkuasaan yang lemah juga menyumbang kepada tunggakkan yang tinggi dan vandalisme. Masalah-masalah ini dapat dikurangkan dengan mengwujudkan suatu badan pengurusan dan penyenggaraan yang tersendiri dengan fungsi-fungsi yang khusus. Penguatkuasaan menjadi lebih efektif dan berkesan jika badan ini mempunyai bidang penguatkuasaannya sendiri dan mempunyai fungsi khusus seperi HKHA dan HDB. Walaupun penubuhan badan pengurusan dan penyenggaraan ini mungkin melibatkan kos yang tinggi dalam jangka pendek tetapi pengalaman HKHA dan HDB menunjukkan bahawa penubuhan entiti tersendiri ini mampu meningkatkan kecekapan pengurusan dan penyenggaraan PPR/PA, sekaligus akan mengelakkan kawasan PPR/PA menjadi slum dalam jangka panjang. Justeru kajian mencadangkan Jabatan Perumahan dan Jabatan Penyenggaraan dikorporatkan menjadi Kuala Lumpur Housing Authority (KLHA) bagi mengurus dan menyenggara PPR/PA di bandaraya Kuala Lumpur agar kewujudan Perumahan Awam di Kuala Lumpur adalah setanding dengan di Hong Kong dan Singapura. Dan komponen model pengurusan KLHA perlulah menekankan tiga faktor dalam perlaksanaannya, iaitu;

i. Entiti tersebut mempunyai struktur pengurusan yang efektif; ii. Mempunyai sumber kewangan sendiri (financially independent); iii. Mampu melaksanakan penguatkuasaan yang berkesan,

Ketiga-tiga komponen ini merupakan komponen asas dalam organisasi HKHA dan HDB. Yang mana faktor-faktor ini ternyata dapat memperkasakan fungsi HKHA dan HDB dalam mereka melaksanakan tanggungjawab masing-masing berlandaskan kepada polisi kerajaan mereka. Justeru, dengan penubuhan Kuala Lumpur Housing Authority (KLHA) yang mempunyai bidang

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kuasa tersendiri akan secara langsung meningkat kecekapan tadbir urus PPR/PA. Masalah yang ditanggung oleh DBKL seperti masalah pembelian rumah, kes tunggakan bayaran sewa, caj penyenggaran, vandalisme di PPR/PA boleh selesaikan secara professional oleh KLHA dengan penghuni PPR/PA.

6.10 Cadangan Promosi Penjualan Bagi merancakkan Program Penjualan Perumahan, adalah dicadangkan suatu strategi pemasaran program perlu dilaksanakan dan mencadangkan strategi- strategi berikut: Pemasaran dan Promosi Adalah dicadangkan agar aktiviti pemasaran dan promosi dipertingkatkan. Bakal pembeli perlu didedahkan kepada kelebihan membeli rumah yang mereka duduki. Fakta yang perlu diketengahkan adalah seperti berikut:

a. Rumah keperluan asas keluarga (the right product); b. Harga rumah yang ditawarkan amat murah berbanding harga semasa

RM80,000.00 (the right price); c. Potensi kenaikan harga rumah pada masa hadapan (the right time); d. Lokasi rumah yang strategik (the right place); dan e. Rumah PPR/PA mendapat permintaan yang tinggi berbanding

tawaran. Senarai menunggu sebanyak 20,000 berbanding 2,000 unit yang sedia diduduki (demand outstrips supply)

Daripada aspek promosi, adalah dicadangkan beberapa langkah berikut perlu dilakukan, iaitu;

a. Paparan iklan dan artikel di dalam akhbar wilayah seperti Harian Metro, Malay Mail dan yang sepertinya;

b. Pembentukan sales-force untuk mendekati bakal pembeli secara peribadi; dan

c. Pembentukan pasukan telemarketing Kempen komprehesif Adalah dicadangkan roadshow diadakan untuk memberi taklimat terperinci mengenai skim pembiayaan baru ini. Perunding pasti skim yang dicadangkan akan mendapat sambutan menggalakkan daripada bakal pembeli. Pembentukan “Sales-Force” Melihat terdapat kebocoran dari segi pemantauan mereka yang berminat untuk membeli rumah. Contohnya daripda 12,675 yang setuju membeli hanya 6,015 atau 52% sahaja yang telah menandatangani perjanjian jual-beli. Adalah dicadangkan agar satu sales-force diwujudkan untuk mengatasi masalah kebocoran ini. Task force ini antara lain akan mempunyai tanggungjawab seperti berikut:

a. Membuat follow-up terhadap mereka yang telah ditawarkan tetapi tidak menerima tawaran;

b. Membuat follow-up terhadap mereka yang setuju menerima tawaran tetapi tidak menandatangani surat jual beli;

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c. Membuat follow-up terhadap mereka yang tidak mengembalikan borang; dan

d. Membuat follow-up permohonan pinjaman bagi pihak pembeli dengan institusi-institusi kewangan;

Strategi Sales-Force ini difikirkan berupaya memastikan kelicinan dan kejayaan proses penjualan ini. Perberian Insentif/Komisen kepada Persatuan Penduduk untuk mempromosi penjualan Unit PPR Adalah dicadangkan penglibatan Persatuan Penduduk secara langsung di dalam program penjualan rumah PPR/PA ini. Sebahagian kecil dari hasil rumah yang terjual oleh pihak Persatuan akan disalurkan kepada tabung Persatuan Penduduk terbabit. Jumlah insentif ini tertakluk kepada keputusan DBKL. 6.11 Tunggakan Sewa dan Caj Penyenggaraan Terdapat tiga (3) faktor utama yang menyumbang kepada permasalahan tunggakan sewa dan caj penyenggaraan iaitu kemiskinan, sikap dan kekangan penguatkuasaan. Bagi golongan miskin tegar, masalah tunggakan sewa tidak seharusnya timbul jika golongan ini mendapat bantuan kebajikan daripada pihak berwajib. Oleh kerana golongan ini juga adalah golongan yang tiada berpendidikan atau hanya berpendidikan rendah, maka banyak saluran-saluran bantuan yang mereka tidak ketahui dan tidak fahami. Bantuan Pegawai Pelawat dan Pengerusi Kawasan serta kerjasama DBKL amat diperlukan bagi membantu golongan ini. Bagi golongan lain, selain miskin tegar, masalah tunggakan sewa dan caj penyenggaraan lebih tertumpu kepada faktor sikap dan faktor kekangan penguatkuasaan. Perunding merasakan bahawa ketiadaan penguatkuasaan yang berterusan adalah penyebab utama kepada terbentuknya sikap “tidak ambil peduli” dan sikap tidak menghormati peraturan-peraturan sediada. Penguatkuasaan yang tegas dan berterusan adalah senjata terpenting dalam menyelesaikan masalah tunggakan ini. Wujudnya masalah tunggakan dengan sendirinya menunjukkan kelemahan kaedah penguatkuasaan sediada. 6.12 Penyenggaraan Kawasan Perumahan i. Rumah Sewa Dapatan kajian survei mendapati bahawa kebanyakan masalah penyenggaraan yang berlaku adalah di dalam rumah yang tertakluk kepada penyeliaan penyewa itu sendiri. Bagaimanapun, ramai penghuni beranggapan bahawa semua masalah penyenggaraan sama ada di dalam atau di luar rumah adalah di bawah tanggungjawab DBKL. Ini telah menimbulkan prasangka buruk di pihak penghuni terhadap DBKL sehingga menyebabkan sesetengah penghuni enggan membayar sewa dan caj penyenggaraan. Tanggapan buruk penghuni terhadap DBKL telah berterusan sejak sekian lama dan perkara ini jika tidak ditangani segera akan menyukarkan kerjasama antara DBKL dan penghuni PPR/PA. Permasalahan

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adalah berpunca daripada aliran maklumat yang tidak sempurna di antara DBKL dengan para penghuni. ii. Rumah Beli Oleh kerana Program Penjualan Perumahan PPR/PA akan memindahkan tanggungjawab penyenggaraan kawasan perumahan daripada DBKL kepada penghuni, maka pihak DBKL haruslah bertanggungjawab dalam memastikan para pembeli memahami dengan jelas fungsi dan peranan JMB & MC yang akan mereka kendalikan. Pemahaman penghuni terhadap peranan JMB & MC adalah amat penting bagi mengelakkan permasalahan penyenggaraan yang serius apabila JMB & MC ditubuhkan kelak. Cadangan Model Pengurusan Perumahan PPR & PA

Sesuatu model pengurusan yang baik perlulah menekankan tiga faktor dalam perlaksanaannya:

i. Entiti tersebut mempunyai struktur pengurusan yang efektif; ii. Mempunyai sumber kewangan sendiri (financially independent); iii. Mampu melaksanakan penguatkuasaan yang berkesan,

Ketiga-tiga faktor ini wujud di dalam HKHA dan HDB yang mana faktor-faktor ini ternyata dapat memperkasakan fungsi HKHA dan HDB dalam mereka melaksanakan tanggungjawab masing-masing berlandaskan kepada polisi kerajaan mereka. Di bandaraya Kuala Lumpur, mandat untuk mengurus dan menyenggara PPR/ PA adalah terletak di bawah DBKL. Sejak sekian lama, DBKL telah melaksanakan tanggungjawabnya tetapi pengurusan PPR/PA hanyalah salah satu daripada 12 fungsi DBKL. Justeru, dengan perkembangan pesat bandaraya Kuala Lumpur, tanggungjawab DBKL menjadi semakin berat dan mencabar. Walaupun DBKL mempunyai Jabatan Pengurusan Perumahan & Pembangunan Komuniti, tetapi disebabkan kedudukan jabatan ini terletak di bawah DBKL, maka mereka tertakluk kepada peraturan-peraturan umum DBKL dan seringkali menghadapi kekangan dalam membuat keputusan. Jabatan Perumahan dan Jabatan Penyenggaraan juga berkongsi sumber-sumber dalam menjalankan tugas masing-masing. Hasil kajian mendapati pihak DBKL perlu memikirkan usaha untuk mewujudkan satu entiti khusus yang mengurus dan menyenggara PPR/PA kerana tanggungjawab mengurus dan menyenggara lebih unit rumah adalah merupakan satu tugas yang berat. Struktur Pengurusan DBKL yang terlalu besar akan menyumbang kepada ketidakberkesanan dalam mengurus dan menyenggara PPR/PA. Kajian mengambil maklum daripada perbincangan-perbincangan yang diadakan dengan Pengerusi Perumahan, DBKL, KWPKB dan penghuni-penghuni rumah bahawa wujud rasa ketidakpuasan yang tinggi oleh penghuni terhadap DBKL. Penguatkuasaan yang lemah juga menyumbang kepada tunggakkan yang tinggi dan vandalisme. Masalah-masalah ini dapat dikurangkan dengan mengwujudkan suatu badan

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pengurusan dan penyenggaraan yang tersendiri dengan fungsi-fungsi yang khusus. Penguatkuasaan menjadi lebih efektif dan berkesan jika badan ini mempunyai bidang penguatkuasaannya sendiri dan mempunyai fungsi khusus seperi HKHA dan HDB. Walaupun penubuhan badan pengurusan dan penyenggaraan ini mungkin melibatkan kos yang tinggi dalam jangka pendek tetapi pengalaman HKHA dan HDB menunjukkan bahawa penubuhan entiti tersendiri ini mampu meningkatkan kecekapan pengurusan dan penyenggaraan PPR/PA, sekaligus akan mengelakkan kawasan PPR/PA menjadi slum dalam jangka panjang. 7. KESIMPULAN KAJIAN Program Perumahan Rakyat (PPR) dan Perumahan Awam (PA) merupakan satu projek perumahan untuk golongan berpendapatan rendah yang dilaksanakan untuk menangani isu berkaitan penempatan rakyat yang tidak teratur dan mengatasi masalah kemiskinan bandar. Pelaksanaan program ini telah memberi harapan baru bagi rakyat untuk menikmati kehidupan yang lebih sempurna dan sihat. Ia juga selaras dengan hasrat dan matlamat kerajaan untuk mempertingkatkan kualiti hidup golongan berpendapatan rendah. Oleh itu pelaksanaan kajian ini berupaya mengenal pasti tahap keupayaan kewangan bakal pembeli (iaitu golongan penyewa sekarang) unit perumahan di bawah Program Penjualan Perumahan dan yang lebih penting input kajian ini berupaya membantu pihak agensi-agensi terlibat merangka strategi perancangan dan penjualan yang lebih efektif dan efisien. Hasil kajian juga mengariskan beberapa strategi pengurusan penjualan yang mencadangkan penstrukturan semula dilakukan terhadap mekanisme pembiayaan (selection of financing options) di peringkat proses penjualan dan juga penubuhan entiti tabungan (Affordable Housing Funding) untuk tujuan membantu dalam bentuk penyediaan kemudahan pembiayaan untuk tujuan pembelian rumah mampu-milik seperti yang dipraktikan di negara China, Australia (National Housing Finance Corporation) dan juga Singapura. Model pengurusan secara berpusat cth HDB (Singapura) ataupun HKHA (Hong Kong) perlu diwujudkan. Sistem pembiayaan dan entiti ini mampu membantu golongan penyewa yang tidak mampu membeli unit kediaman berkenaan. Ini adalah kerana sekiranya mereka terus menyewa, dikhuatiri akan menghadapi masalah kewangan dan tidak mampu membayar sewa dan caj penyelenggaraan. Kutipan caj penyelenggaraan yang tidak mencukupi akan menjejaskan kerja-kerja penyelenggaraan bangunan dan akhirnya kawasan berkenaan menjadi kawasan slum. Ini akan membebankan Kerajaan apabila terpaksa menanggung kos membaik pulih perumahan kos rendah yang melibatkan peruntukan perbelanjaan pengurusan yang besar.

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