Bank Negara Malaysia (BNM) Financial Surveillance Department director Qaiser Iskandar Anwarudin believes that Malaysian houses are considered “seriously unaffordable” by international standards, reported Bernama.
Based on the median multiple methodology of Demographia International, a house is affordable if its price is not more than three times the annual household income.
“The affordability in Malaysia has deteriorated with the median multiple affordability (the ratio of house price to households’ annual income) rising to 4.8 times in 2016 from 3.9 times in 2012,” Qaiser said.
He revealed that housing loan approval had an approval rate of 74.6%, with approval rate for houses priced below RM300,000 reaching around 70%.
Qaiser said 80% of the rejected housing loans were due to the houses being priced more than three times the applicant’s yearly income ratio.
He explained newly-launched houses were out of reach for most citizens, as their average prices ranged from RM417,262 to RM282,000.
Qaiser said 73% of unsold properties in Malaysia were unaffordable, with Johor having the most number of unsold homes followed by Penang, Perak, Kuala Lumpur and Selangor.
Nevertheless, the bank official said there were different initiatives to facilitate home ownership, especially for the M40 (middle-income) and B40 (lower-income) household segments, which include the rent-to-own scheme announced in the 2020 Budget and Skim Jaminan Kredit.
He did note that there was improvement in the country’s property market situation with home prices dropping at a moderate pace. He added that new launches now aimed for affordable houses, unlike in the past.