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iProperty.com.my Highlights Median Housing Affordability Among Home Seekers in 2021

shylendra nathan

Press Release: iProperty.com.my Highlights Median Housing Affordability Among Home Seekers in 2021

  • Median housing affordability was RM474,900 and median home loan instalment was RM2,000 in 2021 
  • The median housing affordability of young property seekers aligns with one-third of new residential units launched in Q3 2021
  • Findings are based on 2021 user data on LoanCare, iProperty.com.my’s home loan eligibility indicator

KUALA LUMPUR, FEBRUARY 8, 2022 – Property portal iProperty.com.my today announces several interesting findings based on the 2021 user data of LoanCare, the portal’s home loan eligibility indicator. Data collected from January 1, 2021 to December 31, 2021 on LoanCare indicate an overall median housing affordability of RM474,900 and median home loan instalment of RM2,000.  

Users of the home loan eligibility indicator comprise various age groups, with the bulk aged between 25 and 34 years old (57%), followed by 35-44 (26%), 18-24 (10%), 45-54 (7%), and the remaining is made up of users aged 55 and above.  

The data is based on information submitted by these users that include ages, employment types, earnings and financial commitments. Additionally, the data are from unique users, ensuring no redundant data points by the same user. The data and findings are derived from LoanCare unique users only and do not represent the overall property market in Malaysia. 

One-third of new launches in Q3 2021 within median affordability of young property seekers

Comparing the different age groups of LoanCare users in 2021, the lower end of the median housing affordability spectrum is made up of 18- to 24-year-olds (RM319,461) and 25- to 34-year-olds (RM438,300). iProperty.com.my notes that their median affordability is within the RM300,001 to RM500,000 price range of 34% of all newly launched residential units in Q3 2021, as reported by the National Property Information Centre (NAPIC) in its Property Market Q3 2021 Snapshot.

The mature property-seeking groups who used Loancare recorded median housing affordability of RM872,988 (45 to 54 years old), RM667,226 (55-64), and RM664,724 (35-44).  

Shylendra Nathan, Country Manager, PropertyGuru Malaysia (PropertyGuru.com.my and iProperty.com.my) comments, “It is encouraging to see that the median affordability among young property seekers is within the price range of one-third of new units coming onto the housing market in Q3 2021.

We are pleased to see that property developers are launching residential properties that correspond with the demand of first-time homebuyers, who typically have lower median affordability. Considering the impact of COVID-19 on the purchasing power of many Malaysians, it is more crucial than ever for property prices to align with the financial capabilities of first-time buyers.

Having said that, property seekers would do well to have a complete picture, and LoanCare provides them with this edge by helping them calculate their DSR and compare their very own home loan eligibility across up to 17 banks in Malaysia.” 

Importance of DSR to determine borrowers’ repayment capability

Many property seekers find it difficult to secure home loans due to insufficient knowledge of the loan application process. One obstacle is a lack of familiarity with debt service ratio (DSR), which indicates a person’s ability to settle their debt obligations.

A high DSR often results in the rejection of a loan application. Banks prefer a low DSR as it suggests an applicant’s ability to pay his/her monthly instalments on time and a lower risk of default. However, DSR is not a standardised notion in Malaysia – each bank has its own guidelines for the maximum allowable DSR threshold based on how it calculates income and commitment recognition. In any case, having DSR information is essential and will give prospective buyers a better idea of which bank(s) to approach for a better chance of getting their home loan application approved at first attempt.

Increased chances of home loan approval with LoanCare

LoanCare is a tool designed to help property seekers increase the chances of getting their home loan approved. This is important because a rejected home loan application can set them back three to six months in applying for another home loan. The tool provides users with detailed information about their DSR, indicative home loan eligibility, loan breakdown by monthly instalment and loan tenure and interest. It also allows them to compare their home loan eligibility across up to 17 banks. 

Most users of a tool like LoanCare are serious property seekers. Since LoanCare uses the DSR method to compare a user’s loan eligibility across multiple banks, it helps these users determine the property price range they should be looking at in the first place, thereby saving browsing time and effort. However, it is important to note that one’s financial capability alone does not guarantee a home loan approval. Banks also count an applicant’s credit history and credibility as important factors when considering whether to approve a home loan application. 

LoanCare is part of iProperty.com.my’s efforts to support homeownership among Malaysians and the portal is on a mission to be SEA’s property trust platform.  It does this by providing comprehensive data and insights that optimise property search and decision-making.

In addition to LoanCare, property seekers who use iProperty.com.my can explore the liveability of their desired homes with the customisable Point-of-Interest (POI) feature. The feature is integrated into a searched property’s map and enables buyers to determine how convenient it is to access amenities surrounding their target property, such as public transportation, medical facilities and educational institutions. This is complemented by the Transacted Data feature which provides information on the last ten property transactions consisting of sale value and price per square footage, as well as capital growth figures and estimated rental yield for each searched property. 

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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