/// Contributor
Two explanations on how these values have been
calculated:
The monthly loan repayment takes into
consideration the newly revised, by Bank Negara,
rules on DSR (Debt Servicing Ratio) and some
average commitment that every household
normally has while the step from “per capita” to
“per household” uses a 1.5 ratio only considering
both couple’s commitments and normal
differences in payout between husband and wife.
I hope these numbers will help all readers to
better understand the meaning of affordability and
how it differs on a nationwide basis. These values
are median and if we look at Johor state and try
to extrapolate real values for Iskandar Malaysia,
looking into the major economic developments
that the “special region” has been going through
my personal take is that affordable values should
be look at as included between RM200,000 and
maximum RM450,000 or, if you prefer RM250 to
RM450 psf looking at livable spaces of 850 to 1,100
sq.ft.
Maybe I’m wrong but, that I’m aware of, there are
several development projects which are offering
livable houses within these values. For sure
purchasers shouldn’t be looking for their dreamhome nearby Danga Bay or in JBCC but widen
up north and east their range of search in what I
define as the Iskandar Malaysia Affordable Corridor
of growth (Chart 9).
Maybe I’m wrong
but, that I’m aware
of, there are several
development
projects which are
offering livable
houses within these
values.
Property Developers
Planning Further
Price Hikes
‘40% Gap Between Affordable Housing Supply and
Demand’
According to Napic data since
2011, house prices has risen
between 9.96% and 12.3%
annually on average.
Kuala Lumpur has the most
expensive houses with house
prices averaging at RM534,216
per unit in 2012. Sabah and
Selangor follow with average per
unit prices of RM382,160 and
RM374,815 respectively.
Potential home buyers hoping that the
cooling measures introduced by the
government which have put the brakes
on the residential property sector, will
result in lower prices of new property
will be sorely disappointed.
Far from lowering prices, a Malaysian
Institute of Economic Research (MIER)
survey shows that 53% of the builders
surveyed plan to hike property prices
in the second quarter (Q2) while the
rest say they will not raise or slash their
prices anytime soon.
With higher cost of construction
translating into higher home prices,
MIER says the survey shows the
respondents who raised prices of
their residential property in Q1FY14
have risen sharply to 47% from 23%
in the previous quarter. For the third
consecutive quarter, no respondents
lowered prices of their residential
property in Q1.
Despite a slowdown in sales of
residential property, construction of
homes is likely to gather momentum
with 47% of the respondents indicating
they plan to build more houses
soon.
‘Loose purse strings contributed
to house price surge’
The mismatch between
affordable housing supply and
demand in the country stands
at 40% difference, says Housing
Minister Abdul Rahman Dahlan.
Quoting data from the
Department of Statistics
Household Income Survey
2012, Abdul Rahman said
that approximately 80% of
Malaysians earn below RM6,954
per month, and that this group
can only afford houses priced
at RM300,000 and below based
on the credit line of 30% of net
income at the current base
lending rate (BLR) of 6.6%.
In comparison, National Property
Information Centre (Napic)’s
2012 report stated that only
31.7% of all new housing
units launched were priced
below RM250,000, said Abdul
Rahman. “This shows that
there is imbalance between the
demand and supply of houses
towards the right target group in
Malaysia.”
“There still exists a serious gap
of about 40% between the
provision of affordable housing
below RM300,000 compared
with the demand,” said Abdul
Rahman. “Of concern is the fact
that income growth has not
been keeping in tandem with
(rising house prices).”
Credits and sources: Napic Property Market Report 2011 and 2012, Government Department of Statistics (Household income and basic amenities Survey Report 2012), IRDA, REI group
Archives, Ho Chin Soon Research maps
Dr. Daniele Gambero, CEO and co-founder of REI Group of Companies, gives presentations on the property market and welcomes feedback at: [email protected]
42
www.PropertyHunter.com.my
Abdul Rahman added that
affordable housing accessibility
has become a more critical
problem among the middle
income group, which is why the
government has introduced
the 1Malaysia People’s Housing
Program (PR1MA).
The minister also touched on the
current regime of low interest
rates which has made housing
loans particularly attractive, in
turn leading to gro