Many Malaysian youths lament that the stringent requirements for a home loan have broken their home ownership dreams. The banks’ firm hand is not without reason – Malaysia’s ratio of household debt to gross domestic product at 89.1% in 2015 is worrying. Thus, banks should not be blamed for being cautious – credit availability should only be provided to those who will not find difficulty in servicing their debt, or the rakyat will struggle even more financially down the road. 

According to a report by Khazanah Research Institute, prices of homes should be three times the annual household median income. Considering a young working professional who earns RM7,000, this means that the price tag should be RM252,000 (RM7,000x12monthsx3). With escalating land costs, it is not shocking news that most homes in urban areas, especially within Klang Valley are well above RM300,000.


Source: Malaysia / Section: News / Date: 14 Jan 2017
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