Malaysia’s home prices ‘seriously unaffordable’, says Khazanah Research
Malaysia’s average house prices are more than four times the median income of its population, making them “seriously unaffordable”, research by Khazanah Research Institute (KRI) has revealed.
Kuala Lumpur has especially been branded as “severely unaffordable” with house prices 5.4 times higher than the median income in the capital city.
The maximum median range for housing prices compared to median income should not be more than three times the median income. But only one state in Malaysia fits the maximum median range: Malacca, where housing prices are three times higher than the median range. The rest are rated between “moderately” and “severely” unaffordable.
Terengganu is the most severely unaffordable of all the states, with median multiple affordability standing at 5.5.
In Kuala Lumpur, the median house price is now RM490,000 per unit, almost double the median house price ranges in all other states.
Penang was also rated as severely unaffordable while Selangor, Malaysia’s wealthiest state, has a median house price of RM300,000, putting it at the moderately unaffordable level.
The research was authored by Dr Suraya Ismail, Intan Nadia Jalil, and Puteri Marjan Megat Muzafar and titled “Making Housing Affordable”. It said that in the case of Kuala Lumpur, housing prices meant the distribution of house prices was “significantly skewed”.
“Of the new properties launched in Kuala Lumpur in 2014, there were no properties launched below the RM250,000 to RM500,000 price bracket, with the bulk of the newly-launched properties situated in the RM500,000 to RM1 million bracket,” it said.
The research was launched today by KRI chairman Tan Sri Nor Mohamed Yakcop, and entailed recommendations to reform the housing industry. According to the report, institutional reforms are needed to change Malaysia’s approach to housing policies.
Source: TheMalaysianInsider.com
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Yes, I think that’s the situation now, homes are seriously not affordable.
So the question is, how did we end up here? One thing is for sure, the authority is not doing it’s job to keep homes affordable. (1) Homes cannot be free market, as that will leave “loop holes” for the rich to squeeze out the middle class. (2) Our local govs are too preoccupied with showing results in the state GDP numbers, as the building of homes for speculative purposes has contributed tremendously in that number.
According to our PM by the year 2020 we are a high income society !!!!!!
Why do we need 250k to 500k price bracket ? Newly launched properties
situated in the RM500,000 to RM1 million bracket still consider cheap !!!!
to a high income society like Malaysia.
Thanks to property speculation and ineffective control measures had brought us to this stage.
Investors (Speculator) in this game believe earning big fat cash in flipping properties. Their manipulation creates false demand in the market. This drove properties price appreciates tremendously for the last few years.
Meanwhile, developers are optimistic keeps pushing their product (property) price to new benchmarks and achieve good profit margin. Government authority on the other hand receives decent property Gain Tax and transaction taxes/fee. Eventually, Developer and government are the ultimate winner for this situation.
Whereas, speculator especially small player, need to encounter chain reaction effect of rising housing price. Certainly, the goods and services expenses will increase.
This means our purchasing power is going decreasing. In other word, living cost higher and we are poorer.
Speculator might earn big fat buck today but the returns might not able to cover the rising living cost (inflation) and their children future in struggling for living.
One thing is certain they done a big favor to developer, government authority and solicitors