This study aims to investigate the structural limits of Malaysia’s fragmented housing finance system and proposes a Hybrid Housing Finance Regime (HHFR) to address persistent affordability challenges. It explores how hybridisation – through the coordination of public, private and community financing instruments – can restore affordability and resilience in middle-income economies affected by financialisation and constrained welfare capacity.
A mixed-methods design combining econometric modelling, qualitative interviews and policy analysis is used to examine affordability dynamics among low- and middle-income households. Quantitative analyses reveal the macro-financial and institutional factors influencing housing affordability, while qualitative insights illuminate governance gaps, coordination failures and policy implementation challenges. Together, these approaches provide a holistic understanding of the systemic barriers limiting affordability reform. Triangulation of both strands validates the theoretical and policy relevance of the proposed hybrid framework.
Results confirm that stagnant incomes, interest-rate volatility and rising land and construction costs are the main structural drivers of unaffordability. Although public–private partnerships, Islamic finance, microfinance and green sukuk each offer partial solutions, their fragmented deployment has reinforced financialisation pressures. The proposed HHFR, coordinated by the Affordable Housing Finance Authority, integrates these instruments under unified governance. It introduces monetary coordination mechanisms – including interest-rate caps, income-contingent repayments and liquidity windows – to stabilise affordability against macro-financial shocks. These findings reinforce the need for coordinated governance to bridge financial and social objectives, aligning directly with the study’s central aim of developing a sustainable hybrid regime.
Conceptually, the study advances housing regime theory by defining hybridisation as a distinct regime type that blends state, market and community logics under coordinated governance. Empirically, it develops a transferable framework for dual-finance economies, offering a third pathway – between state-led and market-led systems – for achieving affordable, inclusive and sustainable housing outcomes.
