Media Statement Chong Chieng Jen:
In a recent report published by The Edge Malaysia on house prices affordability in Malaysia, it was revealed that Sarawak has the lowest percentage of households that would find the Sarawak’s 2020 median house prices affordable.
The formula used to calculate house price affordability is by comparing the median house price to the median household income. By the standard set by the United Nation and World Bank, house price is considered affordable to the people if the house price-to-income ratio is 3 times or below. For example, if the median annual household income is RM45,000, the affordable median house price would be RM135,000 or below.
The average Malaysia’s house price-to-income ratio hit 4.7 times in 2020 which is categorised as “seriously unaffordable”. Sarawak’s house price-to-income ratio in the same year hit an alarming 7.1 times, which is “severely unaffordable”. In a more layman’s term, if it takes a house purchaser in other parts of Malaysia 20 years to repay his housing loan, it would take a house purchaser in Sarawak 30 years to repay his housing loans.
As a result, only 12.9% of households in Sarawak finding the house prices affordable while nationally, 25% of households finding house prices affordable.
In gist, given the household income of Sarawakians in Sarawak, house prices in Sarawak are considered the most expensive and unaffordable in the whole of Malaysia.
- In 2020, the median annual household income in Sarawak was RM45,972 but the median house price then was RM326,500.
- The median house price in Penang was much lower at RM285,000 whereas the median annual household income in Penang was a lot higher at RM64,688.
- Selangor’s median house price was RM480,000 (which was higher than Sarawak) but its median annual household income was RM87,600 which was almost doubled that of Sarawak’s annual median household income.
- In Negeri Sembilan, the median annual household income was RM53,736 but the median house price was only RM230,000.
- Perak had similar level of median annual household income as Sarawak at RM45,108, but the median house price in Perak was RM231,300.
This just goes to show that the Sarawak Government’s housing policy has failed miserably and that qualifies the Minister for Housing to be the worst performing minister in the State Cabinet. As a result of his failure, most young people in Sarawak are burdened with housing loans of more than 25 years to 30 years, unless they have the financial support of their parents.
As a government, there are many ways to push down the price of houses to make it affordable for the common people. Due to the restriction on time to debate, I will not list out the measures as it involves very detailed analysis and discussions, but if you care, I am open to discussions with the policy-makers in Ministry of Housing to share my thoughts.
However, it seems that low and affordable house prices may not be on the priority list of SUPP because SUPP is a well-known “tawke” party, with many of their leaders involved in development projects, even some of their candidates are developers. Thus, the housing policies formulated by the SUPP minister concerned seem to be favouring developers at the expenses of the common people, and allowing the developers to rip huge profits off the common Sarawakians.
Is this why Sarawak’s house prices are so expensive as compared to other states? The ones ripping off the common Sarawakians are not the so-called West Malaysians but are actually the elite fellow Sarawakians in the ruling government parties.
