News: RM1bil Fund Offers Little Help to Those Buying Homes Costing Above Rm150k

Jan 31, 2019

Analysts revealed that the federal government’s new measures to address the oversupply of houses, particularly the central bank’s fund, is supported and praised by many.

However, some still think that residential prices are mostly out of their reach, reported The Edge.

For example, Bank Negara Malaysia’s (BNM) introduction of a RM1 billion fund to help the rakyat purchase affordable housing is expected to have limited impact for those buying residential properties built by private developers, said Kenanga Research.

Nonetheless, the fund is expected to significantly reduce the monthly loan repayments of first-time home buyers by 23 percent versus residential mortgages offered by commercial banks.

“However, we opine that the lower financing scheme has minimal to zero effect on private developments undertaken by listed developers given that most of their products are priced above RM150,000,” it explained.

PropertyGuru Malaysia Country Manager Sheldon Fernandez concurs with Kenanga Research.

“The BNM Fund for affordable homes mainly addresses homes within the RM150,000 range. However, according to PropertyGuru’s research, many are searching for houses below the RM300,000 price bracket.”

Moreover, a 2018 report from the central bank revealed that the country suffered from a shortage of low-cost dwellings, and figures showed that home prices in Malaysia were “seriously unaffordable” in 2016.

According to BNM, to be considered as affordable, home prices should not exceed RM282,000. However, Malaysia’s median residential price stands at RM313,000.

Fernandez pointed out that while 92 percent of the people surveyed in Malaysia by PropertyGuru said they wanted to have their own houses, the high prices remain a major barrier to their dream due to their low household income.

“The issue of wage stagnation against rising property prices is a serious matter and one that will require a macro-economic solution,” he noted.

In fact, he noted that prices of the newly-launched residential properties do not match the income level of ordinary Malaysians. As such, the local property market is suffering from a supply glut, particularly for higher-priced homes. Among the type of houses with many unsold units are condos and apartments.

Due to the overhang of houses, the PropertyGuru Market Index showed that the prices of dwellings advertised at its website declined by 2.3 percent year-on-year in 2018.


Image source: The Edge Markets


Get to know Malaysia inside-out! Discover the most popular townships for Malaysians to live in.

agent image
agency logo
Daniel Phang
Real Estate Agent
REN: 05117
LynL D'Realtor
(+60) 16-4704702