When it comes to owning a home in the bustling capital of Kuala Lumpur, a gloomy picture is what comes to mind for most.
While various government initiatives to boost home ownership and reduce residential overhang are slowly starting to take effect, there’s still a glaring mismatch between the price of homes on the market, and the price of homes most Malaysians can actually afford.
That comes as no surprise of course, it’s KL after all! But how about other major states in the country – like Penang and Johor?
How much does it cost to buy a property there, and is your current salary enough? *hint hint, all bosses*
If you’re curious as to what it’s going to take for you to afford a home in other states, keep reading as we’ll be going through both landed and high-rise properties in KL, Selangor, Penang, Johor and East Malaysia.
How much does a property actually cost?
You probably already know that the price tag of a home depends heavily on the type of property and the specific area it lies in.
Hence for this article, we’ll be basing property prices off median prices as published by the National Property Information Centre (NAPIC) in their Residential Prices Quarterly Update Q2 2019.
We’ll also be using terraced homes to represent landed properties, and condominiums/apartments to represent high-rise properties.
But if you can’t differentiate yet between the different types of landed or high-rise properties, read this article on the 11 types of properties in Malaysia first!
Below is a table we’ve compiled from NAPIC’s report:
| Kuala Lumpur | Median price (RM) |
| All property type | 500,000 |
| Terrace | 766,000 |
| Condominium / Apartment | 550,000 |
| Selangor | Median price (RM) |
| All property type | 380,000 |
| Terrace | 465,000 |
| Condominium / Apartment | 320,000 |
| Johor | Median price (RM) |
| All property type | 360,000 |
| Terrace | 380,000 |
| Condominium / Apartment | 330,000 |
| Penang | Median price (RM) |
| All property type | 280,000 |
| Terrace | 350,000 |
| Condominium / Apartment | 441,000 |
| Sabah | Median price (RM) |
| All property type | 300,000 |
| Terrace | 350,000 |
| Condominium / Apartment | 292,500 |
| Sarawak | Median price (RM) |
| All property type | 300,000 |
| Terrace | 300,000 |
| Condominium / Apartment | 390,000 |
Whether it be terrace, condo or all house types combined, we can see that Kuala Lumpur topples all the other states when it comes to highest median house price (no surprises there!).
Interestingly, Penang seems to be the cheapest place among the 6 states to live in, with the lowest median house price when all property types are taken into account.
How does one calculate home loan affordability?
Now it’s time to take a look at the financial end of things. To gauge how much you should be earning in order to buy a property in these Malaysian states, we’re going to have to assume a few things about you.
We’ll be assuming that:
- Your total monthly debt obligations add up to RM2,000
- Your loan tenure is 35 years
- Your loan interest rate p.a. is 4.5%
- Your loan is 90% of the property’s price
- Your property price is equal to that of its median price in its respective state
- You are spending 35% of your income on this loan
With these assumptions, here’s how much you need to be earning monthly, should you want to buy a terrace house or condominium/apartment in these states!
Kuala Lumpur | |
|
Terrace
|
Condominium/Apartment
|
|
RM13,200
|
RM11,000
|
Selangor | |
|
Terrace
|
Condominium/Apartment
|
|
RM9,950
|
RM8,500
|
Johor | |
|
Terrace
|
Condominium/Apartment
|
|
RM9,100
|
RM8,600
|
Penang | |
|
Terrace
|
Condominium/Apartment
|
|
RM8,800
|
RM9,700
|
Sabah | |
|
Terrace
|
Condominium/Apartment
|
|
RM8,800
|
RM8,200
|
Sarawak | |
|
Terrace
|
Condominium/Apartment
|
|
RM8,200
|
RM9,200
|
The rule of thumb is that your monthly instalments should not exceed 35% of your total income. If you can lower that percentage to 30% or below, even better!
You’ll see that we’ve made a lot of assumptions in order to standardise our calculations, seeing as there are so many factors that come into play.
Some of the other factors we didn’t take into account here are your age and credit score. Your debt service ratio (DSR) in particular, is paramount to your home loan approval. The lower your DSR is, the better!
To calculate these estimates, we used this handy tool – our free Home Loan Eligibility & Affordability Calculator. For a more accurate guess, fill in your own particulars!
Time to take a closer look at these states!
1) Kuala Lumpur
- Terrace house: You might be able to buy one with RM13,200 monthly salary.
- Condominium/Apartment: You might be able to buy one with RM11,000 monthly salary.
Our capital city is a robust economic hub where opportunities extend as far as the horizon. Homes with a million Ringgit price tag are the reality for areas in direct vicinity to KLCC, along with expat areas like Mont Kiara and Bangsar.
Even the more affordable properties in KL are on the upscale end of things. The same holds true the further you venture out from KL’s borders.
According to our Property Market Index Q3 2019 report however, increasing supply and declining asking prices means that the market may be inching closer to narrowing this gap in affordability.
2) Selangor
- Terrace home: You might be able to buy one with RM9,950 monthly salary.
- Condominium/Apartment: You might be able to buy one with RM8,500 monthly salary.
After Kuala Lumpur comes its home state. Selangor is second to only KL in terms of pricey properties. The median price of terrace homes here sits at RM465,000.
Interestingly enough, condos and apartments in Selangor have a median price of only RM320,000. The only state compared in this article with a lower price than that is Sabah.
Amidst its booming economy and burgeoning foreign population, Selangor can be the ideal place to settle down as well as invest in.
If the prime address that Kuala Lumpur offers is a little too far out of reach, just tiptoe a little farther out to areas like Gombak and Puchong!
3) Johor
- Terrace home: You might be able to buy one with RM9,100 monthly salary.
- Condominium/Apartment: You might be able to buy one with RM8,600 monthly salary.
Johor is rapidly blooming into a sophisticated tourism and business hub, thanks in part to its close proximity to Singapore, as well as catalysts like the RTS link project (and hopefully, the KL-SG HSR project soon!).
Its property sector attracts lots of attention too, in particular, from the twinkling eyes of cash-heavy foreign investors.
While a terrace home in Johor will set you back about RM380,000, a high-rise would cost around the RM330,000 mark.
If you’re planning to stay in Johor like Iskandar Puteri or Skudai but commute to Singapore for work, remember to factor in every little detail of the miscellaneous expenses involved!
4) Penang
- Terrace home: You might be able to buy one with RM8,800 monthly salary.
- Condominium/Apartment: You might be able to buy one with RM9,700 monthly salary.
In comparison with the other states, median prices for terrace houses in Penang are one of the cheapest at RM350,000, while the high-rises are second only to Kuala Lumpur.
This steady decline in asking prices is in line with research that we recently carried out. However, remember that the price of your property will be largely dependent on its location.
A terrace house in peaceful Balik Pulau might cut you back RM650,000 or so, but hilltop living definitely isn’t the most convenient thing (even if you might have the best access to durians when it’s in season!).
On the other hand, a house of similar size in the thriving tourist destination of George Town or even Gelugor will likely cost you upwards of a whopping RM1,000,000.
5) East Malaysia
- Terrace home: You might be able to buy a one in Sabah with RM8,800 monthly salary, or one in Sarawak with RM8,200 monthly salary.
- Condominium/Apartment: You might be able to buy one in Sabah with RM8,200 monthly salary, or one in Sarawak with RM9,200 monthly salary.
Property in East Malaysia is notoriously cheaper. However, prime locations such as Kota Kinabalu can see properties with price tags almost comparable to Selangor.
Unaffordability is certainly an issue when taking into account the weaker household income.
Despite this, the median price of terrace homes in Sarawak are the lowest among the 5 states at RM300,000. Sabah comes up slightly higher at RM350,000.
That’s not all there is to it though!
Being able to afford a house – no matter the location – boils down to a lot more than just what we’ve stated here.
Even though we’ve used NAPIC’s median house prices as a reflection of how much it might cost you to own a terrace or condo in these states, these prices might not necessarily reflect the price of homes you’re seeking in your specific area.
For starters, be aware of the hidden costs involved in owning a home, and all the other aspects other than your salary that matters such as your credit score!
Relevant Guides:
-
Property Down Payment In Malaysia: How Long Would It Take You To Save For It?
-
How Much Home Loan Can You Get Based On Your Salary In Malaysia?
-
Here Are Some Of The Trends You Should Give Up To Afford A Down Payment!
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Disclaimer: The information is provided for general information only. PropertyGuru International (Malaysia) Sdn Bhd makes no representations or warranties in relation to the information, including but not limited to any representation or warranty as to the fitness for any particular purpose of the information to the fullest extent permitted by law. While every effort has been made to ensure that the information provided in this article is accurate, reliable, and complete as of the time of writing, the information provided in this article should not be relied upon to make any financial, investment, real estate or legal decisions. Additionally, the information should not substitute advice from a trained professional who can take into account your personal facts and circumstances, and we accept no liability if you use the information to form decisions.