RM282,000 & Under is Affordable House

Homes in the price range of between RM300,000 and RM500,000 should not be categorised as affordable housing for households earning the median income, said Bank Negara Malaysia (BNM).

It said based on the “housing cost burden” approach, the maximum price of an affordable house was estimated at only RM282,000, given the 2016 median household income of RM5,228, as published in the Statistics Department’s Household Income and Expenditure Survey.

“Houses in the price range of RM300,000 to RM500,000 are beyond what is affordable to households earning the median income in Malaysia,” the central bank said on its Factwatch.my website today.

BNM was responding to a report quoting the Real Estate and Housing Developers’ Association (Rehda) as saying that affordable houses were in the price range of between RM300,000 and RM500,000.

“The price definition of an affordable home, as quoted in the article, is inaccurate,” it said.

BNM said the National Property Information Centre’s (Napic) fourth quarter of 2017 (2017 Q4) data showed only 39% of new housing launches were priced up to RM300,000 in the 2016-2017 period.

“These launches were insufficient to cater to the demands of 50% of households in Malaysia earning up to the median income.

“Data also suggests that the issue of unsold affordable homes priced below RM300,000 is the least severe compared with other price ranges,” it said.

The 2017 Q4 data, BNM said, showed unsold residential units priced below RM300,000 constituted the lowest share of total unsold residential properties under construction in Malaysia.

Only 20% of such houses were unsold, followed by houses priced between RM300,000 and RM500,00 (35%) and that above RM500,000 (45%).

It said the creation of an integrated housing supply and demand database was important, given the challenges of identifying the right price points in the right location for new housing supply.

“This is to ensure new housing supply is tailored towards the income and demographic profile of households across different locations.

“Beyond prices of new launches, equally important are other aspects of what constitutes an affordable home, such as connectivity to centres of employment and sufficient living space,” BNM said.