KINIBIZ As a result of the sudden spike in property prices observed between 2009 and 2014, the lower and middle-income groups increasingly find it difficult to buy their homes in many locations, even outside of urban Kuala Lumpur.
The prices of suitable houses or ‘affordable homes’ have now reached critical levels - beyond the grasp of average, urban-dwelling wage earners.
The fact that the Malaysian housing market is out of reach for the average Malaysian is substantiated in Khazanah Research Institute’s (KRI) ‘Making Housing Affordable’ report, which shows that house prices overall are more than four times the national median income.
An objective benchmark to measure the affordability of property prices is by comparing it against annual household income - a multiple of more than three is considered unaffordable.
The housing conundrum is only a recent phenomenon, as there were much less complaints about property affordability about a decade ago. But today it is a grave issue with the housing affordability index in Kuala Lumpur (8.22) almost on par with cities like Sydney (8.30) and London (7.8).
“Kuala Lumpur is priced out there in terms of a global city, but something to bear in mind is that wages in Malaysian aren’t increasing as much,” said Institut Rakyat’s executive director Yin Shao Loong.
For the full story go to KINIBIZ .