Are Properties In The Klang Valley Really Affordable?
I recently met up with my cousin who is in his late twenties and we got to talking about properties in Malaysia. He was in the market for a double-storey house in the heart of Petaling Jaya but had to be content with searching for somewhere else due to the exorbitant prices of houses in the Klang Valley. In the end, he resigned to a property in the outskirts of town – namely Kajang.
I was able to relate to his plight as I, too, am finding it difficult to buy a family home situated at a convenient location, spacious enough for a family of three, as well as suitable for a growing child. Most importantly, at an affordable price (affordable for me, anyway). Needless to say, my options are extremely limited.
The disheartening conversation still vivid in my mind, I couldn’t help but let out gasps of disbelief upon reading the front page news on The Star dated February 18, 2014. I’m sure I was not the only one who was shocked. My immediate thought was – who came up with the data that led to conclusion that properties in the Klang Valley are still affordable?
For those who have missed out on this sensational piece of news, Sime Darby Property Bhd in collaboration with the Faculty of Built Environment of Universiti Malaya has conducted a study on current household spending trends, price of homes and mortgage rates.
As MCA vice president Chua Tee Yong aptly puts it, the study is “a gross understatement of the difficulties faced by Malaysians”. I have no choice but to agree with him.
Hopeful from the title that read “Klang Valley still affordable”, I continued to read on. The findings of the study quickly made me realise that my new found hope was premature.
According to the study, the average monthly income needed to own houses in Melawati and in Mont Kiara-Duta Hartamas areas – both in the Klang Valley – were a far cry from the average monthly income earned by households here.
The survey went on to say that 68% of the planned housing schemes in Klang Valley are affordable.
The Word “Affordable” is Subjective
While I am aware that the word “affordable” is subjective – a 3-storey bungalow in Damansara may be affordable to a selective few – using the word “affordable” to describe properties that are not within reach of most of the high earning families in the Klang Valley, is a gross error on their part.
I find myself asking, how can a property that requires a household income of RM14,580, be considered affordable when the statistics released by the Households Income and Basic Amenities Survey Report 2012 by the Department of Statistics state that not even the highest income group in Malaysia generates a mean monthly combined income of that amount?
The top 20% of the income group in Malaysia generates a mean monthly household income of RM12,159 – nowhere near the RM14,580 income needed to purchase a home in the Klang Valley. In fact, that figure is only achievable if both husband and wife are senior executives in the field of geophysics according to iMoney’s infographic.
Source: Department of Statistics Malaysia
The rest of Malaysians are generating a mean monthly household income of only RM4,573 (40%) and RM1,847 (40%) in 2012.
Does that mean, for most of us (80%) who are not raking in RM14,580, we will have to say goodbye to our dream of ever owning a home in the Klang Valley? Or perhaps resort to staying in more remote areas and travel into the city for work every day?
Whichever way you look at it, the study has just statistically proven that the properties in Malaysia, especially in the urban areas, are slipping out of our grasp. For people in the middle income and lower income groups, the chance of owning a home is getting slimmer by the day.
Now, don’t get me wrong. I do think that this study is a great effort by Sime Darby Property and it is timely as Malaysians need to know where they stand. I’m just not sure if I completely buy the study’s conclusions.
Perhaps, the study can be better used to urge the authorities to do more to help the rakyat to finally own a roof over their heads.
The opinions expressed here are those of the author and do not necessarily reflect the positions of iMoney.my.
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