‘Affordable’ Housing In Malaysia Is Not Really Affordable

Properties that are labelled “affordable” are not actually affordable, said Bank Negara Malaysia (BNM) governor Datuk Muhammad Ibrahim.

The World Bank has characterised houses in Malaysia as severely unaffordable.

“Last year, only 35% of the new housing supply in the market were affordable, and the year before that, the supply of affordable houses was 75%, and the remaining were residences costing above RM500,000,” said Muhammad Ibrahim.

This shows that housing issues that Malaysians face were not about access to credit, he added.

“It is an issue of not having enough income and houses being too expensive.

“As accountants, we look at the problem in a dispassionate way. We look at data and see that the problem is not about access to credit and we must have the courage to say it loudly and clearly to the public,” he said.

BNM has been critical on the issue of affordable housing market in recent months.

The National Property Information Centre showed that less than 30% of new housing launches in 2015-2016 were for those priced less than RM250,000, compared with 70% in 2008-2009, the central bank highlighted recently.

In BNM’s 2016 Annual Report released in March this year, financial simulations showed that those earning less than RM3,000 could only finance a home worth RM176,000, while those earning RM5,000 and below could afford up to RM283,000 and those earning RM10,000 and below, RM515,000.

The report further emphasised that almost three quarters of the current supply of houses for sale in the country were not affordable.

[Source]