In an article in TheMalaysianReserve recently, This was what Real Estate and Housing Developers’ Association Malaysia (Rehda)’s president Datuk Seri Fateh Iskandar Mohamad Mansor said, “It is said that the maximum affordable price for a house in Malaysia is RM282,000. But the World Bank said Malaysia is one of the affordable places to own a home. So, we have two conflicting views. The RM282,000 figure is because the salary has not gone up.” Here’s that full article“Houses become unaffordable as salary remains flat, says Rehda.” in The Malaysian Reserve. (When I look at my salary, I think it has gone up by a few percentage points yearly but when I look at my role, actually my responsibilities have gone up many times more as well. Perhaps that’s the reason why my salary did not stay flat and has inched upwards throughout the years? My current company’s advisor, a Dato’ was an O-Level school leaver when he started working but over the years, he took up courses after courses and later graduated with a law degree and he has recently enrolled in a PhD course. He’s already over the retirement age…)
Moving on in the article, Fateh Iskandar shared that data released in 2017 showed houses in Kuala Lumpur (KL), PJ, Johor Baru and Georgetown are the “most unaffordable” in comparison to the average household income levels. Georgetown is top with the highest median house price at RM600,000 when the maximum housing-cost burden (HCB) is only RM256,000. KL is second with an average house price of RM580,000 when the maximum HCB is RM385,000. In its most recent annual report, Bank Negara Malaysia (BNM) said houses continue to be unaffordable, especially in key employment centres. The central bank’s annual report 2017 also underlined that the bottom 40% of households by income only grew from RM2,537 to RM2,848, about a RM150 increase annually between 2014 and 2016. Here’s that article for reference again.
Actually if we look at RM150, this is an increment of close to 6 percent which is the typical increment percentage yearly. The only reason why someone is paid a normal increment is because he was still doing the exact same role as he did the year before. If his employer was underpaying him versus the market, it’s almost immediate that this person could get another job with a better pay. This is Malaysia. We are NOT in a financial crisis currently… My experience in the job market? I worked in a recruitment company for over 14 years of my working life and have been helping MNCs to SMEs look for people. Good people have lots of options. I think I agree with REHDA president that when salaries are flat, then house prices become expensive. However, I think the solution is not just by building cheaper homes or making loan applications easier. Perhaps the person may also have to change too.
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written on 6 April 2018
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