KUALA LUMPUR (May 5): Bank Negara Malaysia (BNM) said yesterday the definition of affordable houses quoted by the Real Estate and Housing Developers’ Association (Rehda) as being in the price range of RM300,000 to RM500,000 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," it said in a posting on factwatch.my yesterday.
The central bank was responding to a news article by EdgeProp.my which quoted Rehda patron and Rehda Institute trustee Tan Sri Eddy Chen as saying that the overbuilding of affordable housing has become "quite severe" as many developers have shifted into that segment to counter high loan rejection rates, with the oversupply exacerbated by a lack of accurate and timely property market data.
BNM pointed out that 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.
BNM also said there remains a mismatch between the profiles of new housing supply and demand by households.
"According to the fourth-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 fourth 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%)," noted BNM.
"Beyond prices of new launches, equally important are other aspects of what constitutes an affordable home such as connectivity from centres of employment, sufficient living space," it added. — theedgemarkets.com
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