Working in Kuala Lumpur and need to buy a property? Well, anyone who believes affordable homes should be around RM500,000 may have to wait longer. Reported in a local media, Bank Negara Deputy Governor, Sukhdave Singh recently said that there is a mismatch in the supply of homes. There are a lot more entering the market at higher price range despite demand being highest at the lower end of RM500,000. He was speaking at a panel discussion on the Malaysian economy organised by the Malaysia Economic Association. This meant that the prices of homes in urban areas such as Klang Valley continue to be beyond levels deemed affordable. Oh yeah, still waiting for salaries to clim faster before buying? Well, read here: Why our salary seldom rise as fast as property price?
I think as the BNM Deputy Governor, Sukhdave has more statistics available to him but I also think the statistics are centred too much on average numbers. The latest number that I know shows that the average prices within KL to be rather unaffordable. Read here: KL Average property price down, now at RM714,000 However, do bear in mind that this is the average and not the median number. A closer look at some major property portals would reveal many more options available below the stated RM500,000 but it would have to be in the secondary market or the SOHOs which I do not prefer to pay so high for. Take a look at the image.
Of course, he also mentioned something I wrote recently. A lot more MRT stations would mean many mourned areas worth considering. Read here: 31 new MRT stations; look out for more choices He said, “We hope that with the MRT and other improvements in the transportation sector, people will be able to live further from where they work and yet be able to get low cost transportation to get to their workplace efficiently and on time. If they can live farther from where they work then they will have cheaper housing, outside the key city centres.” This may also have to depend if more would be willing to stay at less popular spots. As development and population continue to grow, buying into these cheaper areas would also be profitable in the long run.
Last but not least, demand is never stagnant at any price level. Imagine if there are now thousands of new units of affordable apartments flooding the market at prices closer to RM400,000 what would happen? Yes, the demand would now shift to these lower priced units, as long as they are big enough for a small family and cheap enough for the majority. Of course, when these happens, the average property price should also move downwards. Perhaps then we can see KL’s property prices becoming slightly more affordable in statistics. On the ground however, it’s still available. Buy or no buy is a question the buyer would have to decide. Cheers.
written on 31 Mar 2016
Next suggested article: KL property: SOHO, SOVO frozen for 6 months for now