Promises to make homes more affordable in the 2013’s General Election has not been actualized by the government.
According to Bank Negara Malaysia (BNM), residential properties here remain “seriously unaffordable”. This is because the median price is still equivalent to 4.4 times an annual median income, the same in 2014.
While this is considered “seriously unaffordable” by Demographia and is worse than that in the US (3.9 times) and Japan (4.1 times) in 2015, it is still better than Singapore’s 4.8 multiple.
Asked on the PM’s unfilled pledge, Second Finance Minister Datuk Seri Johari Abdul Ghani conceded that even though household income have climbed over the past five years, prices of houses have outpaced salary growth. “It’s a big gap,” he said recently.
BNM noted that those with a monthly household income of RM3,000 can only afford a RM176,000 home, while those earning RM5,000 could get a RM283,000 house, but not in Kuala Lumpur, where the average price stands at RM800,000.
Moreover, the supply of affordable homes is shrinking. Houses costing below RM250,000 made up under 30 percent of the units launched by developers in 2015 to 2016 versus 70 percent in 2008 to 2009.
But in Q1 2017, such houses only accounted for 20 percent of the launched units even though demand stands at 42 percent, noted Datuk Seri Johari
Despite the unfulfilled promise, the federal government’s PR1MA housing program was strongly received by the public, with a total of 1.5 million Malaysians applying to purchase.
The authorities have spent RM4 billion in this scheme, which sells homes at RM100,000 to RM400,000 apiece or 20 percent below market rates.
PR1MA targets to construct 500,000 affordable homes, but it has only completed 17,000 units since its inception in 2012.
Image sourced from Straits Times.
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