Due to the market condition of having lesser affordable homes, renting seems to be the way to go.
Bank Negara Malaysia (BNM) believes the enforcement of tenancy protection will make the rental housing market a viable option instead of a last resort, reported The Sun Daily.
In its Annual Report 2016, BNM also recommends the establishment of a central repository to track and manage supply and demand; raising supply and lowering the cost of affordable housing; and diversifying sources of financing via innovative financing schemes.
The report revealed that the hike in house prices has surpassed the increase in income levels since 2012, bringing prevailing median home prices beyond the reach of most Malaysians.
“This is primarily attributable to a gross mismatch between housing supply and demand amid diverging expectations between households and developers. The issue has been compounded by the fact that the distribution of new housing supply has been concentrated in the higher-priced categories. The undersupply of housing is particularly acute in the affordable housing segment,” noted the report.
By 2020, the shortage of affordable housing may exceed one million units, warned BNM. This comes as the housing market failed to provide sufficient supply of affordable homes for lower- and mid-income households, despite the efforts by the federal and state governments through various programmes.
BNM attributed the supply shortfall to the imbalances in supply and demand, which worsened in 2012 to 2014.
Notably, the shortfall was aggravated by the slower increase in household incomes at 12.4 percent relative the 17.6 percent rise in home prices.
And although demand for affordable homes supported the growth in end-financing by banks for home purchases, rejection rates for housing loan applications dropped to 23.6 percent last year, it said.
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Radin Ghazali, Content Writer at PropertyGuru, edited this story. To contact her about this or other stories email radin@propertyguru.com.my
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