BNM Director: Houses Prices in Malaysia Are Seriously Unaffordable By International Standards
Buying a house seems like a rather farfetched dream for us millennials, especially when we look at our salaries and then we consider property prices these days. We often wonder how on earth will we be able to actually buy our own houses with our meagre salaries, and this has been recently confirmed by a Bank Negara Malaysia (BNM) official who said that house prices are simply too high for us.
According to NST, Financial Surveillance Department director Qaiser Iskandar Anwarudin said that prices of homes in Malaysia are considered “seriously unaffordable” by international standards. This was calculated based on the median multiple methodology developed by Demographia International and recommended by the World Bank, United Nations and Harvard University.
Using that methodology, if the house’s price is not more than three times of annual household income, then it is considered affordable. “The affordability (in Malaysia) has deteriorated with the median multiple affordability (the ratio of house price to households’ annual income) rising to 4.8 times in 2016 from 3.9 times in 2012,” he said.
The number of unsold properties in Malaysia is now at 73%, with Johor having the highest amount followed by Selangor, Kuala Lumpur, Perak and Pulau Pinang. He explained that these home affordability issues affect the whole country and cause many units to be unsold as no one can afford to buy them. Sad but true!
Currently, newly-launched houses have an average price of RM417,262, which means Malaysians cannot afford to buy them. The maximum affordable house price that should be offered nationwide is supposed to be RM282,000 for an average household. However, prices of affordable homes in the market are actually RM298,000, Berita Harian reported.
He gave an example, saying that the actual house price median is RM793,000 in Kuala Lumpur while the maximum affordable level is RM454,000. As for Selangor, the maximum affordable level is RM375,000 but the actual house price median is RM482,000.
In Johor and Penang, the maximum affordable level is RM291,000 and RM302,000 respectively but the actual house price median is RM439,000 for the former and RM350,000 for the latter. “Housing unaffordability remains a major hurdle for people intending to own a house,” he said.
Qaiser mentioned that although there was still a glut of properties in the market, it was gradually improving as house prices were going down at a moderate pace. Are they really? “The proportion of new launches is also going higher towards the affordable houses as compared to the past,” he said.
He informed that BNM has launched a Fund for Affordable Homesearly 2019 with RM1 billion allocation for two years to facilitate homeownership for B40 households. This fund is expected to help more than 1,100 households own a home with a total asset value of RM180 million.
Let’s hope that one day soon, we can all afford to buy our own homes!
Also read: Survey: 53% of Malaysians Cannot Survive More Than 90 Days With Their Savings
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