According to Khazanah Research Institute and Bank Negara Malaysia, the sign of a well-functioning and affordable housing market is when the median price for the housing market is three times the gross annual household income.
Bank Negara would add that the monthly payment for the house should not be more than 30 per cent of the income. Payments for housing loan’s monthly settlement of more than 30 per cent would be considered overburdening for the consumer and home owners in Malaysia.
Based on the above criteria, Bank Negara would suggest that an affordable house in Malaysia, based on the monthly median income of RM4,585 and the annual median income of RM55,020, is between RM165,000 and RM242,000.
So, are the housing in Malaysia can be regarded as affordable to the most home buyers?
In Malaysia, house prices are 4.4 times the median income. Further, zeroing in on the states, house prices in Kuala Lumpur are 5.4 times, 5.2 times in Penang Island, 4.2 times in Johor and in Selangor, four times the median income.
While, according to Bank Negara, the affordable home is priced at RM242,000, in fact, the average price of houses in Kuala Lumpur is RM490,000; in Selangor RM300,000; Johor, RM260,000; and Penang Island, RM295,000. To put it simply, houses in Malaysia are simply not affordable.
However, there are alternatives that had been taken by the government to boost home ownership in Malaysia and make the houses more affordable.
Latest, citing a letter reportedly from the cabinet, the Kuala Lumpur City Hall (DBKL) was instructed to stop considering and approving the development of shopping complexes, offices, serviced apartments, and luxury condominiums priced over RM1 million in the city, effective Nov 1, 2018. This step can be considered as a proactive measure to control the property value that had been sky rocketed over the year.
Besides that, government also allocated a large amount of fund for the affordable housing scheme. Under Budget 2015, RM1.94 billion has been allocated for the affordable housing and RM2.96 billion under Budget 2016. From this allocation, many affordable housing schemes has been introduced by the government such as the 1Malaysia People’s Housing Programme (PR1MA), First House Deposit Financing and Programme Rumah Mesra Rakyat.
Wonderlist Property, as a solution provider for real estate industry in Malaysia, have been constantly rolling out some alternatives to assist Malaysians to own and buy a property. Through their programme called EziOwn, you can purchase a voucher that can be use as a down payment on a house with great saving. Another programme by Wonderlist Property, Lease Option would be able to provide an alternative for the home buyers through Rent-to-Own. You can also look for affordable properties through their digital listing platform, wonderlist.property.
Finally, despite the value of houses in Malaysia seems to be so expensive nowadays, the initiatives by the government able to help Malaysians especially those who come from low and middle-income group to own affordable housing in Malaysia.
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