Connect with us


Houses in M’sia Are Not Affordable Even By International Standards, Here’s Why


Houses In M'sia Are Not Affordable Even By International Standards, Here's Why - World Of Buzz
Source: PropertyGuru

Follow us on Facebook, Youtube, Twitter, and Instagram for the latest stories and updates daily.

It is evident that many Malaysians are not able to afford a home, especially ones that are residing near the Klang Valley. Well, based on recent reports by Bank Negara Malaysia (BNM), this phenomenon isn’t entirely our fault.

According to Malaysiakini, BNM had reported that houses in Malaysia are increasingly becoming more unaffordable. In their recently released quarterly bulletin, it was also revealed that in 2016, houses here were considered “seriously unaffordable” by international standards.

Here's Why Houses In Malaysia Are Not Affordable As According To Bnm - World Of Buzz

Source: quick meme

According to the bulletin, there are three main factors that contribute to the housing affordability in Malaysia, which are:


1. The mismatch between supply and demand for housing

Due to the structural and cyclical factors in the housing market, there had been a failure in the supply of affordable houses.

Here's Why Houses In Malaysia Are Not Affordable As According To Bnm - World Of Buzz 1

Source: hrjazzy

As a result of this, BNM stated that the level of total unsold residential properties in Malaysia had increased greatly, from 130,690 units to 146,497 units in the second quarter (2Q) of 2017. That’s a lot of houses! 


2. New launches are usually in the unaffordable range

Up till the first quarter of 2017, it was reported that only 24 per cent of houses were launched within the range of RM250,000 or less, which is a range that only 35 per cent of Malaysians could afford. Only a small amount. 

Here's Why Houses In Malaysia Are Not Affordable As According To Bnm - World Of Buzz 2

Source: straight

Not only that, in the second quarter of 2017, almost 82 per cent of unsold units were priced above RM250,000. This is a massive number of unsold houses, which proves that many Malaysians cannot afford houses above that range. 


3. The growth of household income does not tally with the growth of house prices 

The demand for housing is greatly affected by the household income. However, since the household income is still much lower than the house prices thence the ability to buy a new house is also very low. For instance, from 2012 to 2014, the growth of house prices increased by 26.5 per cent, which is more than twice of the growth of household income at only 12.4 per cent.

This vast difference was also evident in 2016, as the bulletin highlighted;

“Actual median house price was RM313,000 (in 2016), beyond the means of many households, where the median national household income was only RM5,228.”

Besides disclosing statistics on the decreasing affordability of Malaysian houses, BNM also outlined five strategies to overcome this issue. Amongst them are;

  • Centralising affordable housing initiatives
  • Setting up an integrated housing database and applicant registry to plan and allocate affordable housing
  • Reducing the cost barrier to provide more affordable houses
  • Rehabilitating household balance sheets by enhancing financial literacy
  • Improving the rental market by strengthening the legal framework

Thus, BNM had estimated the maximum affordable house price to be RM282,000 based on the housing cost burden approach.

“Together with a low state of financial literacy among the majority of Malaysian households and a cultural preference towards home ownership instead of renting, these have contributed to the high demand for house purchases,” BNM said.

So, there you have it, three reasons as to why Malaysian houses are becoming more unaffordable in recent years. Let’s hope they implement the aforementioned strategies to overcome this issue and make houses in Malaysia more affordable in the near future.


Also read: Expert Predicts M’sia Property Market Crash in 2018, House Prices will Drop Drastically

Expert Predicts M'sia's Property Market Crash In 2018, House Prices Will Drop Drastically - World Of Buzz 5

Follow us on Facebook, Youtube, Twitter, and Instagram for the latest stories and updates daily.

Just In

Skid Skid
News12 mins ago

Lorry Driver High On Drugs Falls Asleep On The Wheel & Loses Control Of Vehicle On NKVE

A lorry driver lost control of his vehicle after falling asleep on the wheel and skidded on the NKVE heading...

My Post 2021 09 24T142119.604 1 My Post 2021 09 24T142119.604 1
News2 hours ago

M’sian Man In Somalia Sentenced To 15 Years In Jail For Assisting Terrorist Organisation

A 34-year-old Malaysian man named Ahmad Mustakim Abdul Hamid, was sentenced to 15 years in prison by a Somali military...

Kjherd Kjherd
News4 hours ago

KJ: Herd Immunity No Longer Achievable With 80% Vaccination Due To Delta Variant

The Ministry of Health (KKM) will not longer use the conventional formula of achieving herd immunity with at least 80%...

My Post 2021 09 24T114551.289 My Post 2021 09 24T114551.289
News5 hours ago

56 Politicians Were Convicted Of Flouting SOPs Throughout The Lockdown Period

A couple of months ago, #KerajaanGagal was trending online for various reasons, one of which is the fact that many...

Ebit Lew Ft 2 Ebit Lew Ft 2
News6 hours ago

PDRM On The Hunt For Those Who Leaked Alleged Lewd Messages & Videos Of Celebrity Preacher

The police have opened up an investigation paper after detecting the spread of several video clips and lewd messages allegedly...

Walkin Walkin
News7 hours ago

MOE: Walk-In Vaccinations Only Allowed For Homeschoolers & Students Not Registered In School

The Ministry of Education (MOE) has announced that walk-in vaccinations for adolescents is only allowed for those who are not...

Langkawi2 Langkawi2
News23 hours ago

Tun M Urges Langkawi Residents To Keep Island Clean After Footage Of Littered Rubbish Goes Viral

After the tourism sector was opened to the public for fully vaccinated individuals, people have been flooding beaches and other...

School2 School2
News1 day ago

MOE: Unvaccinated Kids Not Barred From Attending School, Parents To Be Counselled Instead

The Covid-19 vaccination efforts have begun for teenagers aged 12-17, but not all parents are keen on getting their children...


Latest Videos