An urban worker in Kuala Lumpur and Penang will need to work for five years – and then spend on nothing at all – to be able to afford a home, Bank Negara Malaysia found.

House prices are beyond the reach of workers in key states in Malaysia while commercial properties are oversupplied, the central bank said.

“House prices are severely unaffordable in Kuala Lumpur and Penang.

“In the major urban employment centres in these key states, the situation is even more acute,” the central bank said.

This comes as Housing, Local Government, and Urban Well-being Minister Abdul Rahman Dahlan and Penang Chief Minister Lim Guan Eng engage in an on-going row over affordable homes.

Lim said the state set the upper band for affordable homes at RM400,000 according to federal standards, but Abdul Rahman said there is no such thing as a federal standard for affordable house prices.

Bank Negara measures affordability based on the ‘median multiple’ method – that is, by comparing median household income with median prices of houses in the state.

Using this method, the house price-to-income ratio for Kuala Lumpur was 4.9 in 2012, but jumped to 5.4 in 2014.

In Penang, it rose from 4.1 to 5.2 from 2012 to 2014, in Johor 3.7 to 4.2, and from 3.6 to 4.0 in Selangor for the same period.

This exceeds the national house price-to-income ratio of 4.4 in 2014, the central bank said in its annual report released yesterday.

Houses are considered affordable if the ratio is 3.0 and below, while they are severely unaffordable if the ratio hits 5.1 and above.

In 2014, the median house price in Kuala Lumpur is RM86,000 more than what is considered to be affordable based on median household incomes.

In the city centre, it is a whopping RM156,000 beyond the level of affordability.

Similar trends persist in Petaling, Johor Baru, and George Town, the report found.

The median household income for Kuala Lumpur is RM7,620 and RM4,702 in George Town, but the median house price in the Penang capital is higher than in the federal capital by RM40,000.

House prices in Penang are also on the forefront following the chief minister’s purchase of a 4,000-plus sq ft bungalow at Jalan Pinhorn for RM2.6 million.

Penang Umno alleges that the bungalow was purchased at a discounted rate as kickback for a land deal between the state and a private firm.

Lim denies the claim, while the Malaysian Anti-Corruption Commission is investigating the matter.