By Sherilyn Goh
Tiger winces after looking at the severely unaffordable housing market, and wonders how she is going to make it in this concrete jungle. Is solving the housing conundrum rocket science, and if not, why has the issue not been addressed adequately?
Kuala Lumpur households that earns around RM7,620 a month (the median household income in KL) these days are shockingly unable to comfortably service a house mortgage for a property valued at RM630,000, despite technically being able to qualify for the home loan in the first place.
After some simple calculations and taking into consideration all kinds of basic household expenses, it is estimated that one will be left with about RM194 per month in savings, without even considering much leisurely pursuits.
It is no wonder that this generation has negative savings and is close to being an indebted generation.
Ironically, a household income of RM7,620 a month puts one very near to the top 20% of the Malaysian population, at least when going by official definitions. Hence, what can the middle 40% and bottom 40% of the population expect to make of their wages without being squeezed to their wits’ end?
Median household income for the top 20% of Malaysians is at RM9,796, the middle 40% RM4,372 and the bottom 40% is at RM1,852.
Based on the housing affordability index which measures affordable housing as no more than three times the annual household income, a household which earns RM7,620 a month can supposedly afford houses within the range of RM300,000 to RM400,000.
With a national median annual household income of RM55,020 and an affordability ratio of three, this means that half of the Malaysian population can only afford to buy a house that is under RM165,000, a rare sight these days when private developers view affordable housing as those below RM500,000.
The right to housing is a basic citizen’s right, and one should not be made to choose between paying housing instalments and putting food on the table.
The onus lies largely on the government to fix this housing mess, which has only seemed to spiral out of hand in recent years.
Abdul Rahman Dahlan
While the Minister of Urban Wellbeing, Housing and Local Government Abdul Rahman Dahlan should be acknowledged for going on record to admit that there exists a 40% gap between demand and supply in the affordable housing segment in 2013, what has he done since then to alleviate the issue and ease the burden of households?
While solving the housing problem is no easy feat, it is not rocket science either.
After so many five-year plans and various national housing policies, it perplexes Tiger that until today a centralised database that captures demand and supply remains very much a mythical object, despite being requested for time and again by stakeholders looking for increased transparency.
No matter how much of the annual government budgets are spent on affordable housing programmes, the housing conundrum will not be resolved for as long as these subsidised housing are not channelled to the intended, deserving groups, and instead were subjected to abuse by speculators and property flippers.
The government should also put its foot down in defining affordability, taking into consideration that after paying for their house mortgages, it is important that households are still able to maintain a minimum standard of living.
It is important to understand that what developers and financial institutions consider as affordable are not necessarily what households can comfortably afford. The government should therefore mediate and close the differences between the two via effective policies, instead of listening to just one party or the other.
Additionally, affordable housing should also be zoned alongside an effective public transportation network, coupled with seamless first- and last-mile connectivity so that the folks who go to work in the city centre could actually afford to look beyond the Klang Valley to purchase their properties.
Price increase in one area can spill over to the other surrounding areas, so it will not be long before the problem spirals out of control to being more than just an urban issue if the right measures are not adopted to address the crux of the matter.
Instead of asking frustrated urban folks to avoid using toll roads or to move out from the city to avoid the escalating costs of living, perhaps ministers should work harder and exhibit the political will to providing feasible long-term solutions, and to improve the quality of life for common folks.
GRRRRR!!!
Yesterday: Solving the housing conundrum
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