SKYROCKETing prices causing people to rent. Oh dear.

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I personally believe there are still affordable properties in the market today. I meant the total market including the secondary market, the affordable homes being built today and not just the new launches. I also believe that as long as one is disciplined enough, one can buy a property, even if it’s just a 700 sq ft secondary apartment unit. I did just that many years ago when I was still earning RM3,000 per month. (Yes, took some sacrifices…) According to PropertyGuru Malaysia, there are TWO underlying issues why Malaysians could not afford to buy a property. They are skyrocketing prices and buyers’ poor credit score. The full article in NST here. Due to these two reasons, Malaysians prefer to rent instead. It says that Low-to-middle-income earners are facing difficulties in obtaining loans and have no other option but to rent.

My earlier article about Rent-To-Own (RTO) here.   According to Housing and Local Government Minister Zuraida Kamaruddin last month, there were just too many high-end houses. She shared that her ministry will study the matter to deal with the situation. Bank Negara Malaysia said on Factwatch.my in May that houses priced between RM300,000 and RM500,000 are beyond affordable to households earning the median income in Malaysia. The maximum affordable price of an affordable house should be RM282,000, given the 2016 median household income of RM5,228, as published in the Statistics Department’s Household Income and Expenditure Survey. Meanwhile Rehda Institute, the training and research arm of Rehda, has recently proposed the RM200,000-RM500,000 range, depending on a property’s locality, as threshold prices for affordable housing in Peninsular Malaysia. (I think REHDA Institute’s proposal makes sense).

There may be some clearer direction moving forward. The new National Housing Policy 2 will be announced in September with some changes to boost the property market. It will make it easier for people to own a home. National Housing Department director-general N. Jayaselan said at the Affordable Housing Conference 2018 last month that the new national housing policy would focus on reducing house prices by lowering compliance costs. The compliance costs include contributions for utilities like Tenaga Nasional Bhd, Syarikat Bekalan Air Selangor Sdn Bhd and Indah Water Konsortium Sdn Bhd, developer charges, land conversion premiums, infrastructure contribution, surrender of land and construction of facilities. I think the developers are also hopeful that the compliance costs will be reduced once the Sales and Service Tax is reintroduced on September 1. Here’s that full article in NST for reference.

When we really want something, we will find a way. That’s my advice to every young potential home owner today. It’s always about choices yeah. Earlier article here. Choices, choices, choices  Happy deciding for yourselves.

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written on 24th Aug 2018

Next suggested article:  Buy cheaper, that’s the best solution to affordable

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