RETHINKING AFFORDABILITY IN THE PROPERTY MARKET

According to Jimmy Doh Jee Ming, Managing Director of Lagenda Properties, the property market has been soft for the past many years, and the Covid-19 pandemic has only delayed any further demand for housing.

- POOVENRAJ KANAGARAJ

The market, Jimmy says, has been impacted through the softening economy and affordability of pricing in Malaysia, only to be made worse by the pandemic this time around. However, even in the pre-Covid world, the Managing Director says salaries have not grown as much as the GDP to help Malaysians afford homes.

“People misunderstand the average total salary of Malaysians. The central bank has reported that the average Malaysian affordable housing price is about RM282,000, while the average salary is between RM4,000 and RM5,000,”

“However, Sitiawan is an example where salaries stay at RM2,000 but houses are above RM300,000. This is the reason behind the overhang,” Jimmy tells BusinessToday. “Developers look at the national data and start developing properties around RM300,000 but even that’s too high. It needs to be around RM200,000,” he stressed.

He highlights developers need to consider the culture of places they are looking to build properties at. Highrises for instance is not substantial in areas such as Sitiawan, where Jimmy is from.

While he hopes that the average income will rise with time, Jimmy says developers such as himself will find solutions and continue to drive efficiency. Even as raw material pricing and labor costs will increase, Jimmy believes developers can maintain certain production qualities.

“We can redesign housing to fit lower costs and if by repeating the process, surely we should get better at it,” he says.

“Back then, we would only provide 1 plug point per room. These days, however, with an increase in gadgets, electronics, and devices, this no longer suits the case.”