Housing affordability: Neither BN nor Pakatan can point to stellar record

A 35-storey tower just outside your front door

An article in the Guardian caught my attention – Ghost Towers: Half of newly built towers fail to sell.

Some points from the article:

  • half the 1,900 ultra-luxury apartments built in London last year failed to sell
  • they lie empty even as first-time buyers struggle to find an affordable home
  • a record 3,000 unsold luxury new-build homes (usually priced at over 1m pounds)
  • rich overseas buyers have slowed to a trickle
  • construction began last year on 1,900 apartments (more than £1,500psf) but only 900 sold
  • high-end apartment is 2,000 sq feet; so selling for £3m
  • another 14,000 unsold apartments £1,000-1,500psf
  • UK average price is £211psf
  • luxury housing glut would take three years to clear
  • but developers have 420 towers (at least 20-storeys) in the pipeline
  • 58% of demand in London is for homes priced below £450psf, but only 25% of homes being built are at this price
  • Developers turning to local buyers

Now just substitute pounds with ringgit (without converting), and isn’t that pretty much what is happening in Malaysia?

Check out this quote:

Henry Pryor, a property buying agent, says the London luxury new-build market is “already overstuffed but we’re just building more of them”.

“We’re going to have loads of empty and part-built posh ghost towers,” he says. “They were built as gambling chips for rich overseas investors, but they are no longer interested in the London casino and have moved on.”

Pryor says developers of luxury blocks lining the Thames have failed to sell homes despite offering discounts, incentives and freebies – including free furniture, carpets and curtains and even cars.

Another real estate investment firm boss says:

He says hundreds of Asian investors who had bought London developments off-plan in 2015-16 in the hope of making a quick profit by selling apartments on closer to completion have instead lost hundreds of thousands of pounds.

“We need ‘affordable’ one- or two-bedroom apartments priced at £500,000. We don’t need swimming pools and empty rooftop bars with no one living at home to buy drinks at them. There’s just way too many £1.5m-£2m-£3m flats that all look the same.

I remember reading some time ago that many of the foreign buyers of London property were Malaysians and Singaporeans.

Now lets see if homes in Peninsular Malaysia are really affordable. A common measure is that average price of homes should not be more than three times the annual income level.

House price-to-income ratio

“Severely unaffordable”!
6.9 – KL
6.3 – Penang
6.2 – Malaysia
5.1 – Selangor

“Seriously unaffordable”
4.8 – Terengganu
4.7 – Pahang
4.5 – Johor
4.3 – Kedah

“Moderately unaffordable”
4.0 – Perak
Perlis – 3.3

And the most affordable state is:

2.4 – Malacca

(Source: The Edge, 23 October 2017)

Let’s look more closely at why house prices are beyond the reach of many in KL and Penang:

What Penang residents can afford

B40 – RM118,000 (for the bottom 40% of the people)
M40 – RM230,000 (for the middle 40%)
T20 – RM442,000 (for the top 20%)

Average – RM195,000

Actual Penang prices (end-2016)

Terraced houses – RM447,000
High-rises – RM340,000
All Penang houses – RM410,000

So the lower-income group can only afford homes priced at RM118,000 and the middle class just RM230,000. These folk make up 80% of the population. Are there enough homes below RM150,000 for the bottom 40%. Or below RM250,000 for the bottom 80%? You see the mismatch?

Similarly for KL.

What KL residents can afford:

B40 – RM192,000
M40 – RM380,000
T20 – RM727,000
Average – RM327,000

Actual KL prices (end-2016)

Terraced houses – RM759,000
High-rises – RM479,000
All KL houses – RM749,000

Source: The Edge, 23 October 2017

Why are house prices so high?

Here are some factors that could have led to higher property prices:

  • Influx of easy money with quantitative easing in the US led to hot money pouring into the property market here
  • Influx of large numbers of foreign buyers eg Singapore property players and China buyers
  • Low interest rates prompt buyers to buy in the hope of achieving a higher return
  • Quandrupling of densities in Penang from 30 homes/acre to 128 homes/acre pushed up land prices across the state. These higher densities were supposed to encourage developers to build more affordable homes, but did that happen?
  • Allowing reclaimed land to be treated as freehold (when there is a strong legal argument for treating them as leasehold) further pushed up land prices
  • Higher land prices, accompanied by higher densities, have both contributed to higher house prices
  • Sale of state land to developers for mostly high-end housing instead of state development corporations managing it.
  • Planning for more reclaimed land, which will inevitably result in more high-end housing.
  • Developers building for wealthier overseas buyers in the hope of reaping higher profits
  • Leaving the housing market to full blown market forces. The result: developers prefer building for wealthy overseas buyers so that they can reap maximum profits

Final thought: For every home completed and unsold in Malaysia (20,867 in all in the first half of 2017), there are 3.2 more homes under construction and unsold (68,245 homes in all). And the overhang? 14,776 homes. (Source: The Edge, 4 December 2017)

If you think there is no solution to this crisis, check out what Sungai Siput MP Dr Jeyakumar Devaraj has to say here and here.

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Change will only come when Malaysians are suffering more. Right now, many are still complacent. Despite all the scandals and abuse of power, many are still living in their small cocooned world and asking “What’s in it for me?”. The sacrifice of Rafizi as whistleblower of NFC scandal is in vain. The opposition is so fractious and self-centred that I do not mind not voting this round. Just let the whole country go down further more before everyone wakes up. They need to see that they have no jobs and can’t even withdraw money from their accounts because the country… Read more »


Please name which country is housing stellar apart from singland. Singland build public housing as lky wants people to defend their home and country

Zhang Meiyou

In the 70s Penangites laughed at Singapore HDB pigeon homes compared to terraced homes in Penang island. Today go see Singapore HDB anytime better maintained than any medium cost condominiums in Penang.


Singapore Budget 2018: Bigger grants to buy HDB resale flat with parents, singles to get grants to live near parents



EVERY Singaporean aged 21 years and above this year will receive a one-off ang pow of between S$100 (RM390) and S$300 from the government as the republic expects a record surplus for the current financial year. Adult Singaporeans with an annual income of up to S$28,000 will each receive S$300 while those with annual earnings between S$28,001 and S$100,000 will get S$200. Those earning more than US S$100,000 a year will get S$100. Anyone who owns more than one property is eligible for S$100 regardless of income. The payments, dubbed the SG Bonus, will be disbursed at the end of… Read more »


The overhang in malls and office space is worse.

Though China is so large and hard to manage, we regularly hear heartening news from there. In the case of its housing bubble, it has launched a comprehensive, detailed policy and plan to promote the renting of houses as a solution.


The sudden exit of the Parkson departmental store as a tenant from the Maju Junction Mall in Kuala Lumpur is another sign of challenging times for retail stores in Malaysia.


Ho Wan Lai

Housing affordability part of Malay Dilemma 2018?



No housing dilemma for most Malay civil servants since accommodation is provided by government for their families to expand with procreation.


They prefer to buy cars instead.

Ho Wan Lai

RM72K homes a hot debatable issue on Anilnetto.com not too long ago. Anil revisits the past again to be contentious topic for GE14 road shows from all parties?


No reason to bring in politics here. This is a global phenomenon, mainly arising from a low interest rate environment since 2008 (as you pointed out too). Free market economics work in cycles – in terms of the property market, it peaked a few years back and now we’re experiencing a slowdown – eventually it will be priced by market forces. Whether it will be a cushioned bottom-up or a big crash remains to be seen.


Properties are now investment commodities – for appreciation in value, not so much for living in, as heavily promoted by the likes of Gavin Tee.
This is an unfortunate reality to many, but money making opportunity to some.


Then Najib administration’s 2013 promise to build one million affordable houses costing RM100,000 to 400,0000 has hit a snag – the target market earns enough only to buy houses worth RM250,000 or less.

1Malaysia Housing scheme chief executive officer Abdul Mutalib Alias said the segment is 60% of the available supply of affordable housing offered at a major government-sponsored expo last weekend.

But many buyers felt frustrated at the lack of units below RM250,000 at the expo, which is being held weeks before the ruling Barisan Nasional seeks another mandate.


Ban Heang

Klang MP Charles Santiago today hit out at the government over the state of low-cost flats in the country, calling it a “sad reflection of the ‘Other Malaysia’ where the victims are its children”. He said although Malaysia’s absolute poverty may have been reduced, relative poverty was on the rise as seen through the families living in People’s Housing Projects (PPR) flats. “Put differently, the country’s poor children are incurring the wrath of the growing inequality in the country,” he said in a statement. Commenting on a recent study by the United Nations Children’s Fund (Unicef) on urban poverty in… Read more »


Check up Gem Residences in Prai, promotion at Queensbay Mall on 3rd day of CNY 18 Feb:


Ivory and MBI advertised heavily on chinese newspapers on chinese new year day, hoping to catch the attention of those working in Singapore who return for reunion dinner? But many are holding back their purchase in view of housing glut in Malaysia cities due to overpricing.

Mah HS

Malaysian Institute of Estate Agents (MIEA) Sarawak chapter president Alex Ting has expressed his disappointment over the government not emulating the success of Singapore’s Housing Development Board (HDB) model.

“The success of the HDB has somehow not been implemented in Malaysia.

“Many people in this industry are very disappointed, and the public ought to be even more disappointed,” he told a press conference in Petaling Jaya, in conjunction with the release of the “MIEA Property Market Sentiment Report 2018.”


Ho Wan Lai

Affordable Penang homes on display at Komtar :
DUA RESIDENSI at Teluk Kumbar on island and JIRAN RESIDENSI at Kampung Jawa Butterworth.
Price from RM72.5K hope Anil can elaborate further to inform those in need of affordable homes.


“Proptech will certainly change the way we invest in property,” says Dato Sri Gavin Tee, President of Swhengtee Group. The increasingly robust tech-enabled apps and software, and more sophisticated hardware will drive the real estate industry towards a more transparent setup where we will see faster completion at every stage of the building and buying process, he said.


Ho Wan Lai

Property expert Dato Gavin Tee predicts housing demand to rebound and pick up in 2018, citing one belt one road strategy in China to bring in investors from abroad.

Personally I witness many vacant condo units being illegally rented out to foreign workers further damping the prices for those low medium cost units, and locals can now cohabitat with foreign cultures to bring more definitions to 1Malaysia inclusive of Banglasia concept.


Malaysia’s 1st Chinese property investment TV reality show “Anyone Can Be A Property Millionaire” 房地产投资电视真人秀 will be on air in February 2018 on Astro AEC channel 301 featuring Dato’ Sri Gavin Tee as the mentor and 8 properties millionaire stars including celebrity and model, Amber Chia.



Smells like, looks like, sounds like that billboard promotion selling a Mr Zhang going to be the richest man in the world!
Same tactics of money game strategy of pulpit preaching to the bewildered innocent.


Life is all about timing. Buy low sell high.
There are people who work full time as property investor, part time in money game, and gain profit to set for early retirement. Wrong timing and you face the risks of losing it all. tunglang could check his ba qua horoscope before venturing in high risk but high return speculative game.


“Property expert Dato Gavin Tee predicts housing demand to rebound and pick up in 2018, citing one belt one road strategy in China to bring in investors from abroad.”
Either this is a fantasy or a false hope out of desperation of cari-makan.
Mr Tattoo (of Fantasy Island), where are you now?


I think there is limited money making opportunities for Chinese in malaysia so many turn to speculating properties as interest is low in the last few years.


MCA should also pressure Najib to open As1M to chinese.


The property bubble will burst sooner. Look at the signs: 1) Dream housing billboards (3-in-a-row) gone as fast as Speedy Gonzales at the flyover facing Masjid Negeri + traffic coming from Ayer Itam. Wrong target marketing! 2) Many empty homes (dark windows @ night) at most newly built properties. 3) Housing agents gnashing teeth at the state of the property market. 4) Slowdown in furniture business given a brief respite by needs for furnishing replacement due to the recent 2 floods. But pre-CNY sales will still see some slowdown. 5) Rows of refurbished prewar houses still waiting for tenants to… Read more »


If housing bubble burst, very happy for ah pek. He can roll and twist like his era, king cat elvis the pelvis. Price down, ah pek may buy a few lot like hunting fir cheap curry mee and become land lord. Ah pek can retire in peace and collect rent. Any cheap rent like cheap curdy mee or one ton mee?


You are trying too hard to shriek incomprehensible!
NK surely pat your back!


Just blame salary not rising fast enough because Malaysia has little value added activities but rely on cheap foreign labor. Better salary in Singapore.


Better salary in SingLand but very rude? What’s the point???
After counter row with Singaporeans, Johor Immigration tells visitors to behave


Dangerous but cheap, Penang residents say about life at low-cost flats


Many of the PPR tenants continue to disregard community living.


Of course lah. Ah pek cant hear how former kedah mb has to say? Pg lang go to singlang to kuli but s singland come to pg to throw money to invest


Sour grapes?


Working Singaporeans could use their CPF for monthly payment towards HDB home purchase, subsidised by PAP government. Today HDB flats are better than any medium range private condominiums in Malaysia in terms of quality and features.


LOL. Dr. Jeyakumar may be a wonderful soul but he is no builder of much of anything RM50 psf construction cost? No way. His analysis and arguments are leftist everyone and everything should be sacrificial selfless fantasy.


Some blokes support property as an investment, notwithstanding housing is generally a social need (generally = 99% : 1% super-rich). One fine day, water & food will be an investment commodity (futures trading?) & many will not be able to afford to survive on. While the super-rich will continue to disrupt basic human needs of humanity. That’s AOK??? Pls examine your hearts. One fine day, disparity between the haves & have nots will reach beyond redemption to the extent many will become slaves to the super-rich via lifelong borrowings, low wages (now, low wages not the fault of workers but… Read more »

rilakkuma Penang

tunglang have yr children applied for RM72.6K Telouk Kumbar condo developed by PDC ?


Teluk Kumbar – Affordable Housing Scheme B (Type C)

Selling Price From RM 72,500
Built-up Area From 700 sqft


Ho Wan Lai

Teluk Kumbar nor far from USM and air itam now that roads are extended so good choice


You don’t qualify for affordable housing, so why advertise?


Rent first, buy later?


Can rent one room to USM undergraduate.


This one is affordable, not touched by Gavin Tee who targets higher end ones.


You need to wear Bata shoes to promote affordable housing in Penang!
Also, be careful to share your lifestyle here lest you invite a joker spinner!


Ah pek can do wonders behind the rubber tree. Scream global warming but drive 4wd. Scream about high density and too much construction but live in condo.