KUALA LUMPUR: Housing affordability, which is based on the ratio of average terraced house price to average household income, has worsened over the past five years, according to Rahim & Co, Chartered Surveyors Sdn Bhd.
In its survey of the Malaysian property market 2014/2015, the ratio increased from 3.4 in 2009 to 3.6 in 2012 and 2014.
“This essentially means that an average terraced house would cost an average household or family in Malaysia, 3.6 times its annual gross income.
“The least affordable terraced house in Malaysia in 2014 was recorded for Sabah (6.2 times), Penang state (5.9 times) and Kuala Lumpur (5.6 times). Sarawak was fourth with a ratio of 4.4 times,” the survey showed.
Rahim & Co, which is one of the largest real estate consultancy companies in Malaysia, also said in its outlook that transaction activities in the residential sector after expected to soften with the implementation of the Goods and Services Tax (GST) in April 2015.
Other factors are lower crude oil prices, which had collapsed by nearly 50% from a high of US$100 in June to below US$50 now, and a weakened currency.
However, market interest along main transport and infrastructure corridors remains robust spurring new transit-oriented-developments and townships, particularly in the Klang Valley.
To recap, Rahim & Co said that over the past four year, property prices were fuelled by the nation’s development plans, investment concentration and also the rapid growth in Iskandar Malaysia.
“The cautious market sentiment echoes the state of property market in reaching its plateau and reconciliation period is expected in the near future,” it said. - The Star
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