Property Expert: Most Malaysians Can't Afford Houses Above RM250,000
"Those who can afford to buy anything today are those who have an income of RM10,000 and above."
By Nandini Balakrishnan — 23 Nov 2017, 05:28 PM
A property expert recently opined that most Malaysians cannot afford houses above the price of RM250,000 due to insufficient income
According to a report by The Malaysian Insight today, 23 November, Ernest Cheong made the statement when speaking about the 1Malaysia People's Housing Programme (PR1MA).
He said that the public housing scheme should stick to its goal of developing and providing affordable housing for the middle-income earners in major cities in the country, stressing that houses priced above RM250,000 would be too expensive for their target group.
PR1MA houses range between RM100,000 and RM400,000 is aimed at Malaysians with a joint monthly household income of RM2,500 to RM7,500.
"They just have to accept that people's salaries are stagnant. Those who can afford to buy anything today are those who have an income of RM10,000 and above."
"After all their expenses, they may be able to save RM1,000, and with that they can only get a RM200,000 loan. The reality is that they can't afford anything above RM250,000," Cheong told The Malaysian Insight.
Just earlier this week, BN Kinabatangan MP Bung Mokhtar Radin complained that the houses under PR1MA are becoming unaffordable for Malaysians.
"At these prices, the policy of affordable housing is almost impossible. We can only look at the houses, but not buy. I've received complaints that PR1MA has lost sight of its objective," he said in Dewan Rakyat on Tuesday, 21 November.
Responding to Bung's comments, Federal Territories Minister Tengku Adnan Tengku Mansor defended the government's affordable housing scheme
Federal Territories Minister Datuk Seri Tengku Adnan Tengku Mansor
Image via Bernama/Malay Mail OnlineHe said that the programme has helped a lot of Malaysians by building and selling affordable homes and even gone to great lengths to help those whose loan applications were rejected by the bank.
"I disagree, as we have provided more than 70,000 units to be built for sale at a starting price of RM188,000 up to RM300,000.
"We even had programmes such as in Desa Pandan, Kuala Lumpur, where we redeveloped squatter areas to help the Indian community. We sold units for RM42,000 each," explained Tengku Adnan, as reported by The Malaysian Insight.
Meanwhile, Cheong referred to an Employee's Provident Fund (EPF) statement in 2016 that said 89% of the working population in Malaysia earn less than RM5,000 monthly, stressing that Malaysians don't have much to save every month
"Those earning RM5,000 two years ago could save RM1,000, but today they can only save a few hundred ringgit. Malaysians are being squeezed for money to live.
"When banks look at your salary of RM5,000, they know you can't even survive on that if you have a big family. So, how are they going to lend you? An RM250,000 house is the maximum that 95% of Malaysians can afford to buy," said Cheong.
He added that the mismatch between salary scales and price hikes is a problem that has been brewing for almost a decade now, as the economy continues to lag.