Supporting Affordable Housing With e-Procurement

Supporting Affordable Housing with e-Procurement

Suitable housing forms the foundation of a modern nation. It is the basis for safety, security and wellbeing that enables citizens to thrive. Yet delivering on those housing needs across a vibrant, growing country like Malaysia is recognised as an increasingly pressing challenge.

Malaysia’s changing demographics highlight the growing need for affordable housing. As one of the most urbanised countries in Southeast Asia, Malaysia saw its urban population grow by 50% in the decade from 2000-2010. As urbanisation continues to accelerate, so does the pressure on housing in key areas of economic activity.

Affordable housing is vital to support growth on Malaysia’s path towards developed nation status. This is a complex landscape to navigate, but one thing is clear – every tool we have must be brought to bear to keep costs down and ensure housing is affordable. That means e-procurement has an important role to play.

The challenging landscape of affordable housing

It’s easy to dismiss housing as a social need rather than an economic one. It’s certainly true that housing forms a most fundamental social foundation. Yet it’s important that we also appreciate the huge economic benefits of suitable housing. According to the Khazanah Research Institute, for every RM1 that is spent on housing, a consequent RM1.90 output is enjoyed by the economy. That makes housing an economic driver that can’t be ignored.

The pressures on affordable housing are equally important to consider. Urbanisation is a problem we’ve raised, but at the same time the average household in Malaysia is getting smaller. That means the ultimate pressure on housing stock is one of sustainable supply in areas of the greatest need.

The government’s 11th Malaysia Plan targets the building of 606,000 new affordable houses to 2020. Yet ensuring those houses are affordable is a stumbling block in itself. With increasing pressure presented by land costs, how can we both utilise the land we need while supporting a residential construction sector that continues to be economically viable?

According to some analysis, Malaysia’s property sector faces a rocky road ahead in 2018. Underneath that rocky road lies the flipside of the challenge presented by affordable housing. If construction companies are building houses that are unaffordable, how can they recoup their own costs in undertaking construction? With an estimated 130,000 unsold residential properties throughout Malaysia in the first quarter of 2017, there’s clearly a puzzle that needs to be solved. Procurehere offers an e-procurement solution which provides a valuable piece in that puzzle.

Benefits of e-procurement for construction companies

Procurehere delivers an outstanding opportunity for cost-saving and efficiency improvements that reduce financial risk while increasing competitiveness. By helping reduce the capital and operational expenditure of construction companies, e-procurement helps contribute to a more economically efficient industry that helps support the ability to produce more affordable housing.

It’s important in delivering simplified solutions that we don’t add to the financial challenges inherent in affordable housing. Procurehere is purpose-built to provide a platform that requires no formal training, and no significant capital expenditure. It does not require expensive IT infrastructure or excessive subscription fees.

Since 2002 we’ve facilitated over RM4 billion in spend, achieving average cost savings of 17% per event. When it comes to an area like affordable housing, 17% can make a significant difference to both the project viability for a construction company and the affordability to the ultimate consumer.

The recent 2018 budget saw a welcome RM2.2 billion committed to home building throughout Malaysia. Committing that money towards housing that is affordable, means supporting an industry that can afford to build them. When it comes to constructing a more efficient industry, e-procurement offers a powerful tool to help build a firm foundation.

Explore simple e-procurement solutions that build a big impact for your construction business with our free trial.