Late in 1985, the Government of Malaysia was confronted with a deteriorating macroeconomic situation, evidenced by falling exports, declining rates of capital formation, and falling GNP. The construction sector, which for a considerable period had been one of the leading sectors in Malaysian economic growth, had experienced a rapid and severe turnaround. After having grown at an average annual rate of 9.7% between 1980 and 1984, value added in the construction sector fell by 8.4% in 1985 and by 14.0% in 1986. In an attempt to deal with the sharp reversal in this sector, the Government decided to implement a Special Low Cost Housing Program (SLCHP). Under the program, some 80,000 units of housing per year (priced at less than M$25,000) were to be built. It was expected that the combined direct and indirect effects of the program would be to raise the rate of GNP growth by as much as 2% per year, contributing importantly to economic recovery. An additional objective of the program was to sharply change the nature of the product being supplied in the Malaysian housing market, offering less-expensive housing to enable proportionally more low-income households to purchase new housing units than had been the case for more than a decade.