Local housing ‘way above affordable’

 

KUALA LUMPUR: Khazanah Research Institute (KRiS) has indicated that property prices in Malaysia are way above affordable, with the average price being 5.5 times more than the country’s annual median income.

The house prices are more expensive than those in Singapore (at 5.1 times), the United States (3.5 times) and the United Kingdom (4.7 times), although it is behind Hong Kong, whose housing price is 14.9 times more than its annual median income.

KRiS noted this in its inaugural “The State of Households” report, which was launched on Monday.

Another interesting point in the report is: Malaysian property developers make more money than their peers in many developed and developing countries.

“At 21 per cent, the profit margins of our property developers are high, at almost two times of the US (12 per cent), 1.2 times those of the UK (17 per cent) and Thailand (14 per cent), although Singapore has higher margins (25 per cent).”

The report also found that Malaysians have limited savings.

The Amanah Saham Bumiputera (ASB) data obtained last year showed that the bottom 71.4 per cent of ASB holders had only an average of RM554 in their accounts, compared with the average top 0.2 per cent with RM725,122.

The latest 2014 Employees Provident Fund (EPF) data showed the total savings of the top 17,061 EPF members to be much higher than that of the bottom 44 per cent (2.85 million members).

The richest 5,446 EPF members have on average RM1.56 million in savings while the bottom 13.5 per cent have an average of RM3,580.

The report attributed low earnings and unbridled spending on consumer goods using loans or credit as the cause of limited savings for Malaysians, across all ethnicity.

~ By BUSINESS TIMES

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