According to a research done by US-based Demographia, Malaysia’s residential housing market is ‘severely unaffordable’. The situation is worst than Singapore, Japan and United States. It said that housing are severely unaffordable if the median of house price to annual income is 5.1 times. Malaysia clocked 5.5 times compared to Singapore’s 5.1 and United States together with Japan is ‘moderately unaffordable’. Ok, first of all, I have never heard of this famous US-based company. I think they must have used very reliable data to come up with the numbers, so we will just have to accept it as it is. Allow me to share three stories I have known since many years ago, even before Malaysia’s property prices started to go up.
At a time when Malaysia’s property prices has yet to go up, Singapore’s has gone up, US has had a crisis and Japanese who work in Tokyo SELDOM own a property in Tokyo. Reason? Severely unaffordable. My ex Japanese GM travels 300km on a daily basis to work in Tokyo because he said, it’s not worth buying a SEVERELY small Tokyo property. How are you going to fit your family? My ex Japanese counterpart rents the smallest room ever he can find and it eats up nearly 40% of his pay. USA had such a SEVERE crisis that it made many of the largest banking groups to go partially bankrupt and they were mostly ‘bailed out’ by the government. The reason? Greed, everyone speculated including the banks and when someone suddenly woke up, the crisis happened. In Singapore, please refer to propertyguru.com.sg and take a look at what’s really available for below S$350,000. I hope you can find a decent place for you to raise your family with that amount.
I actually agree that property prices in Malaysia is getting very expensive and that the governments including federal and state must do a lot more. Stop talking and start pushing for more completion. Sorry, I still see lots of talking by both the federal and the state governments but in terms of actual completion? Not many. However, when a report said something which does not fit my personal logic, I have to say something. Oh yeah, National House Buyers Association (HBA) honorary secretary-general Chang Kim Loong says that HBA’s own findings especially in the urban and sub-urban areas have risen beyond the reach of many average Malaysians. He also said a lot of things which make sense like many Malaysians would need to combine their income to buy homes and this is pretty risky because what if sudden emergencies happen? I think these comments deserve a feedback from the relevant authorities? 🙂
All the best in hunting for a ‘severely unaffordable’ housing then. Perhaps this report may give a huge warning to the developers to start building cheaper homes and having lower margins. Every departmental store I went to this weekend had an ongoing property fair of some sort. Somehow I think the message from Demographia and HBA has not reached these developers? Also, based on this report, it may be prudent to keep cash because property bubble may burst soon. One main reason for property bubble to burst is because majority could no longer afford to buy a property and the price just plummet. Let’s wait for the next report from Demographia then.
written on 26 Oct 2014
Next suggested article: Experts said, ‘affordable properties’ NO MORE (nonsense)
0 Responses
There are so many different sources of write-ups on affordability. Demographia may benchmark 5.1, there are others who say 3 and so on. So don’t just believe in one, read more.
We have to read in depth and analyse the parameters each used etc. Property prices may be seemingly unaffordable in one country by just throwing a set of figures to suit their agenda. Different countries have different ways of doing housing their people, from the hands off to the actively building homes? Take Singapore as an example. The Govt, through its HDB builds 80% of homes for its citizens and sell them at subsidised prices. So in Singapore, one cannot use private property price benchmark onto the median income and claim that Singapore homes are unaffordable.
Very true Frederick. As usual, if it’s not alarming, no one would read it. Thus all the news must b ever more sensational.