A recent report by an American urban development think tank has come out saying that Malaysia’s residential home market is “severely unaffordable” to local residents, even more so than the notoriously expensive homes in Singapore, Japan and the US.
In light of the Federal Government’s various housing assistance schemes outlined in last Friday’s Budget 2015 announcement, the Demographia group’s report seems troubling: it states that many Malaysians are excluded from being able to buy into the local housing market, despite the government’s attempts to subsidise first-time homebuyers.
Although homes in Singapore, Japan and the US might be more expensive at face value, Demographia bases its metric on home prices versus median annual income: it regards a home to be “severely unaffordable” if it is more than 5.1 times the the value of the median annual income.
While expensive, homes in Singapore average to 5.1x the median annual income of its residents, while in Malaysia, homes are more out of reach, priced at 5.5 times the value of median annual Malaysian incomes.
The Malay Mail Online cites an analysis of the Demographia report by the Straits Times, which also states that while Malaysian monthly household income has risen by eight per cent per year, it is being outpaced by the annual increase in the average price of a home, at 10%.
During last Friday’s Budget 2015 tabling, Prime Minister Najib Razak introduced a raft of policies aimed at assisting first-time homebuyers make the jump to home ownership. It remains to be seen if these new policies will indeed make purchasing a home in an increasingly more expensive market any easier.
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