Building a smaller sized house - can that help more middle to lower income Malaysian to afford their own house?
Banks are now giving out loan based on repayment capacity of the borrowers. Housing loan is based on affordability of the applicants; loan approval is based on their net income. More and more middle to lower income Malaysian cannot get loan to buy their first house. But a house to provide a shelter over the head is a need to human beings. Young couple starting a family need to have one. If they cannot buy one, they will rent one.
A smaller house for a lower price. But is that what the market wants? Residents of Selangor in the area around Klang, Shah Alam and Kuala Langat - is this what they want? A smaller version of house with smaller hall, smaller room, lesser room? Middle to lower income group in these areas are still in favour of a decent sized single or double storey terraced house with 3 room or 3+1 rooms.
Singapore and Hong Kong are adopting this strategy because of land availability issue. It's a matter of necessity - there are no two ways about it. It has become a way of life to them. Can Malaysia adopt the the same strategy to solve the affordability problem faced by Malaysian in owning their house? Coming up with smaller size house will not be the effective solution. It will not meet the demand of the house buyers.
I see the affordability issue of house ownership ( under the affordable housing category for middle to lower income group that comprise of graduates and young families ) more as an issue of earning capacity than the price of the house. Increase of price in house and property is a natural progression. Increase in the price of houses that come with fundamental like rising household income is a good thing. It becomes a problem when there a a great mismatch between the rate of increase in price of houses and earning capacity or average income. Afterall, who would buy property or houses if the price is not going to go up over the years? Would you, as you are reading on this?
Long term solution to house ownership must come from increasing the earning capacity or average income of the rakyat. Only when we have increased productivity will the increased earning be sustained. Everything in life, edible or otherwise, is going to cost more by the years. Speculation and profiteering that cause price increase should be stopped. But what if the increase is caused by the law of demand and supply? Are middle to lower income Malaysians prepared to take on the challenge of an ever-increasing cost of living, and not just the prospect of an ever-increasing price of houses?
Long term solution to house ownership must come from increasing the earning capacity or average income of the rakyat. Only when we have increased productivity will the increased earning be sustained. Everything in life, edible or otherwise, is going to cost more by the years. Speculation and profiteering that cause price increase should be stopped. But what if the increase is caused by the law of demand and supply? Are middle to lower income Malaysians prepared to take on the challenge of an ever-increasing cost of living, and not just the prospect of an ever-increasing price of houses?
