Are Homes Beyond the Reach of Most Malaysians?

Soaring property prices in city areas, coupled with their low salaries, have made owning a home at their preferred locations an unattainable dream for young people. That explains why many continue to rent or live with their parents. 

According to the National Property Information Centre, the average price of a condominium or apartment in the Batu district in Kuala Lumpur is RM735,000, while a similar property in the Setapak district, also in Kuala Lumpur, costs RM430,000. In Selangor, a terrace house in the Petaling district costs RM750,000, while the same property type in Sabak Bernam, which is on the outskirts, is priced at RM330,000. 

Source: https://www.wikiimpact.com

 Workers aged between 24 and 30 typically have lower incomes and cannot afford to buy properties in central areas. Working in Kuala Lumpur and looking to buy a property nearby but are earnings, say between RM2,400 and RM4,000 (monthly), you could not afford any property. If the price of the house is around RM500,000, you must earn at least RM4,600 to own it. Banks usually request that they apply for a joint loan with their partner or parents. The maximum loan eligibility is up to 70% of their monthly income, which is rather high. But some may have a car loan, a student loan and a credit card (debt). So, what’s left of their income for loan eligibility for a house priced between RM350,000 and RM400,000. These houses are located further away from the city centre but would cost more to travel to their workplace. 

The government should come up with rent-to-own schemes so that young people can afford to buy property closer to their workplace. Banks would also consider the person’s working tenure, which must be at least two years, the type of company and the industry they are working in. Those working as gig workers or on a contract basis are not so favoured by banks. Then there is CTOS. 

So, the Government must work with REHDA in incentivising building affordable houses, releasing land by states or converting some land from agriculture to residential. There are several other steps that need to be included and the Government is fully aware of them! 

Reference:

Homes beyond the reach of most M’sians, Diyana Pfordten, The Star, 30 October 2024