According to the 4th quarter 2017 data by National Property Information Centre (NAPIC), only 39% of new housing launches were priced up to RM300,000 over the years 2016-2017. This is insufficient to cater to the demand by 50% of households in Malaysia earning up to the median income.
The definition of affordable house price quoted in the article is inaccurate. Houses in the price range of RM300,000 to RM500,000 are beyond what is affordable to the households earning the median income in Malaysia.
Based on international standards using the Housing Cost Burden approach, the maximum price of an affordable home is estimated to be only RM282,000, given the median household income of RM5,228 in 2016 as published in the Household Income and Expenditure Survey by the Department of Statistics, Malaysia (DOSM).
There remains a mismatch between the profiles of new housing supply and demand by households. According to the 4th quarter 2017 data by National Property Information Centre (NAPIC), only 39% of new housing launches were priced up to RM300,000 over the years 2016-2017. This is insufficient to cater to the demand by 50% of households in Malaysia earning up to the median income.
NAPIC data also suggests that the issue of unsold affordable homes priced below RM300,000 is the least severe compared to other price ranges. As at 4th quarter of 2017, unsold residential units priced below RM300,000 constitute the lowest share (20%) of total unsold residential properties under construction in Malaysia (RM300k-500k: 35%; above RM500k: 45%).
Establishing an integrated housing supply and demand database is 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 (e.g. connectivity from centres of employment, sufficient living space).
Before this, In The Edge Financial Daily article dated 4 May 2018 entitled “Overbuilding of affordable homes ‘quite severe’”, REHDA claimed that “the overbuilding of affordable housing is quite severe as many developers have shifted into that segment.”
“In fact, we are building everywhere – those affordable houses in the range of RM300,000 to RM500,000”, says REHDA.
The fact watch from Bank Negara is to clear the defamation.