KUALA LUMPUR: Housing affordability, the overhang and the buy-or-rent dilemma found themselves at the forefront of the issues plaguing the Malaysian property market, each issue interlinked with the other, resulting in the unaffordability of real estate.
Real estate consultancy Rahim & Co International Sdn Bhd highlighted the issue of unaffordability in Malaysia’s recovering property market during a press conference on the Rahim & Co Research: Property Market Review 2022/2023 findings.
The conference was represented by Rahim & Co executive chairman Tan Sri Abdul Rahim Abdul Rahman, valuation director Chee Kok Thim, Estate Agency chief executive officer Siva Shanker, Petaling Jaya office director Choy Yue Kwong and research director Sulaiman Saheh.
Rahim & Co highlighted Kuala Lumpur (KL), Selangor, Pulau Pinang and Johor as states with a significant mismatch of housing affordability. Comparing the median terraced house price to annual household median income, KL scored a 5.9, Selangor a 5.3, Pinang a 5.4 and Johor a 5.5.
Within Rahim & Co’s affordability metric, any number above 5.0 is considered seriously unaffordable.
“What does 5.9 mean? That means for 5.9 years, a person who earns and lives in KL will have to save every single cent of their gross income, not paying taxes, not buying food, for 5.9 years before they can equate to the median house price in KL, which actually causes the next issue, the overhang numbers,” Saheh said.
