Rising home prices is the main reason why Malaysians can't afford a house, revealed Bank Negara Malaysia (BNM)
Bloomberg reported yesterday, 11 October, that most Malaysians do not have the financial capabilities for house ownership as homes are too expensive.
"Rising home prices have added to the grievances of Malaysians grappling with the cost of living since a goods and services tax started two years ago, and as the government removes subsidies on daily items including petrol and sugar," the report read.
Bloomberg said, based on BNM's findings, there is a current shortage of affordable housing in the country - 960,000 units to be exact. The central bank is predicting that this worrying gap between demand and supply will widen and the shortage of affordable housing will increase to one million units by 2020.
"It is an issue of not having enough income and houses being too expensive," BNM governor Datuk Muhammad Ibrahim said in August.
During the 2017 National Conference of Public Sector Accountants in August, Muhammad reportedly said that what is said to be "affordable housing" was, in reality, unaffordable.
"Even the World Bank has characterised our houses as severely unaffordable," he was quoted as saying by Bloomberg.
According to Muhammad, only 35% of new homes on the market are truly affordable.
This was also echoed by Second Finance Minister Datuk Seri Johari Abdul Ghani
Speaking at the 20th National Housing & Property Summit on 6 October, Johari said that there is a "gross mismatch" between housing supply and demand.
There is an oversupply of high-end properties that are beyond what most Malaysians can afford and there is also no demand for it.
"Since 2012, the increase in house prices in Malaysia has outstripped the rise in income levels. Consequently, prevailing median house prices are beyond the reach of most Malaysians," he said.
He also denied claims that it is harder to get housing loans approved for consumers
Johari cited BNM's report that states that an overall housing loan approval rate remains high at 74.2%, with banks approving a total of RM22.3 billion of house financing to 90,137 borrowers.
His statement comes as there have been ongoing allegations that BNM's move to tighten loan regulations in recent years has negatively impacted consumers. There are also claims that the enforced regulations led to consumers being denied access to finances that will allow them to own a house of their own.
"While access to financing is not a hindrance, the escalating price of housing above and beyond rakyat's affordability seems to be primary issue facing on home ownership, particularly with respect to affordable housing," Johari said.
Meanwhile, BNM has recently launched a new website, 'Housing Watch', to allow Malaysians to keep up with the latest information on the housing markets
Housing Watch is a platform that provides centralised information on key issues and developments related to the housing market in Malaysia.
It provides consumers with information related to policy measures and home financing assistance programmes, among others.
Bloomberg has called it a website that is "packed with data aimed at debunking the 'myth' that access to financing was deterring home ownership".
Do you agree that houses in Malaysia are too expensive? Let us know your thoughts in the comment section below.
Speaking of Bank Negara, the central bank has also revealed some interesting insights on Malaysians' money habits: