KUALA LUMPUR: Houses in the price range of between RM300,000 and RM500,000 should not be categorised as affordable housing for households earning the median income, said Bank Negara Malaysia (BNM).
It said based on the Housing Cost Burden approach, the maximum price of an affordable house was estimated at only RM282,000, given the 2016 median household income of RM5,228 as published in the Statistics Department’s Household Income and Expenditure Survey.
“Houses in the price range of RM300,000 to RM500,000 are beyond what is affordable to households earning the median income in Malaysia,” it said on its Factwatch.my website today,
The central bank was responding to a report quoting the Real Estate and Housing Developers’ Association (Rehda) as saying that affordable houses were in the price range of between RM300,000 and RM500,000.
“The definition of affordable house price quoted in the article is inaccurate,” it said.
BNM said the National Property Information Centre’s (NAPIC) fourth quarter of 2017 (4Q17) data showed only 39 per cent of new housing launches were priced up to RM300,000 in the 2016-2017 period.
“The launches were insufficient to cater to the demand by 50 per cent of households in Malaysia earning up to the median income.
“The data also suggests that the issue of unsold affordable homes priced below RM300,000 is the least severe compared to other price ranges,” it said.
The 4Q17 data, BNM said, showed that unsold residential units priced below RM300,000 constituted the lowest share of total unsold residential properties under construction in Malaysia at 20 per cent, followed by houses priced between RM300,000 and RM500,00 (35 per cent) and those above RM500,000 (45 per cent).
It said the creation of an integrated housing supply and demand database was important, given the challenges of identifying the right price points in the right location for new housing supply.
“This is to ensure new housing supply is tailored towards the income and demographic profile of households across different locations.
“Beyond prices of new launches, equally important are other aspects of what constitutes an affordable home such as connectivity from centres of employment and sufficient living space,” BNM added.