Homelessness can also happen in advanced property markets

I saw a Facebook post by a good friend showing a picture of the homeless in Australia. His three-word comment? “Malaysia’s Not Alone.” To be honest, this is the first time I saw such photos. When I was in the UK many many years ago, I know many homeless seniors would face real life-threatening danger whenever winter comes. They have no home and no heat to keep themselves warm. I remembered when I had to sit right next to the heater just to do my university assignments because it was so cold inside my room in Bristol. This is despite Bristol already considered of the warmer cities in Britain during winter. Take a look at the post. The full article in the edge is here. The first few sentences were both positive and negative at the same time. It said that the Australian economy has been growing well and has NOT had a recession for 26 years! Not in 2008, not in 1998! However, the number of people falling behind despite the nation moving forward is increasing. According to Homelessness New South Wales (NSW) chief Katherine McKernan who spoke to AFP, “If you compare it to London and New York, the numbers of people seeking homelessness support are comparatively higher. We think that homelessness is increasing in Sydney and Melbourne due to the lack of affordable housing.” According to the stats, Australia’s agency for health and welfare statistics AIHW said demand for homelessness services reached a record high of 279,000 people in 2015-16. (Based on current total population, this represents around 1.2 percent)

The median home price in Melbourne is currently over AUD750,000 (as per REIV) The current median salary for Melbourne? Median income for Melbourne workers is AUD56,137 (as per Point2homes)  If we calculate the affordability, the median home price versus the median income is around 13.36 times. This is considered severely unaffordable. As for Sydney, the median home price is AUD995,804 (as per domain.com.au). The median income for Sydney workers is AUD89,900 (As per housing.nsw.gov.au) Using the same calculation, the home price versus the median income is 11 times.  In comparison, Sydney folks would find it cheaper to own a home compared to Melbourne. This is despite the higher home prices. When we google, we can even get articles comparing the property prices in some Australian cities to some U.S. cities. What it shows is that with the same prices, people can get better homes in some U.S. cities. Let me be clear however that if given a choice, I would prefer Australia. Many reasons lah. Haha.

Is Malaysia moving towards the same direction? The only statistics for homeless people in Malaysia I could find showed that there are over 2,000 reported. Here’s that link. However, according to Khazanah Research Institute, the home prices versus income numbers also shows that theme prices in Kuala Lumpur is severely unaffordable. To be affordable,KL homes must be RM280,000 In 2015, it was 5.4 times. Hopefully all those affordable projects by both the government and the private sectors have helped or will help? Names like PR1MA, Rumah Selangorku and even RUMAWIPLet’s own a home because the advanced property markets have shown to us that not owning a home, even a small one a further away from city one may be a necessity after all. Okay, for the younger generations, perhaps even a small unit may be what you need. After all, in Hong Kong, the apartments are already as small as 180 sq ft these days. Happy following.

written on 20 March 2017

Next suggested article: Only smaller units can be affordable

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