Posts Tagged ‘Economy’

Housing Income Index: RM14,500 income to buy house in Klang Valley

February 18th, 2014
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The Star frontpaged an interesting article today. How much should a family earn in order to afford a house in Klang Valley? A question that we all wonder about. Well, according to a survey done by Sime Darby Property Bhd in collaboration with the Faculty of Built Environment of Universiti Malaya, its….RM14,580!

The survey covered 1,529 respondents, of whom 1,183 were home owners at 12 locations: Bukit Jelutong, Denai Alam, Bukit Subang, Bandar Bukit Raja, Subang Jaya, USJ, Putra Heights, Ara Damansara, Mont Kiara, Melawati, Kajang and Nilai. I suppose the balance 346 respondents were (i) renting, (ii) not from those areas, or (iii) refused to divulge house ownership info.

Wonder why areas like Puchong, Cheras, Dengkil, Banting, Kapar, Putrajaya, Cyberjaya, Semenyih, Serdang, Klang, Shah Alam, Sg Buloh, Rawang etc not covered. Hope they conduct a second round of survey to cover these areas.

Average household income

Average household income

[image from The Star] [click on image to view larger size]

Some analysis of the respondents: 94% are married. 73% are male. 59% work in private sector; 20% are self-employed, and 14% work in government. No mention if the income is from both spouse or single spouse.

13% have post-grad qualifications, 40% have bachelor degree, and 21% have a diploma. 68% are Malay/bumiputra; 30% Chinese and just 2% Indians.  Looks like not many Indians live in these places. And seems like the affluent Malays/bumiputera are quite alot.

Quite importantly, the age group of respondents is missing. Show this info to any adult below age 30 and see if they fit into this income group. If the respondents are into their late 30s  or more, then the young adults can’t even think about buying houses in these places. 10-15 years down the lane, how would it be? As it is, our parents could afford to buy house in these locations when they were young. Read another article in the Star where Mr Gill (age 63) bought house in SS12 Subang Jaya way back in 1985 (age 34) for RM200k that took quarter of his combined income with wife. Now at age 34, what can you buy?

It will interesting to also identify the household size of the respondents. Does the average income consider the household size (kids, maid, parents, siblings etc)?

The other part of the survey covered their expenditure information. So, 12% of income goes into savings, translating into RM1749.60 on average.  How many percent can the rest of us save? Transportation is 16% (Rm2,332.80), Food 15% (RM2,187), mortgage 14% (RM2,041.20), another 15% for other loans (RM2,187), 13% for other expenses (Rm1,895.40), childcare/education 7% (RM1,020.60) and insurance 6% (RM874.80). Most likely these houses have two or more cars. How is your expenses like?

Ok, let’s look some other statistics from DOS and EPU which both refer to Household Income Survey (last done in 2012). All stats below refer to Klang Valley and/or urban figures wherever possible:

  • The top 20% of urban dwellers earned a monthly average of RM13,654 while the middle 40% earned average of RM5,294. Don’t bother looking at the bottom 40%, middle 40% already can’t own house in those 12 places (and I suspect many other places) even with double income).
  • 41% of urban dwellers earn RM5,000 or more.
  • The average monthly income for urban dweller is RM5,742. Selangor residents earned RM7,023 while KL residents RM8,586.

Looking at HIS statistics, using average salary earned by those staying in Selangor or KL and double it (both spouse working), then you can buy house in those areas. However taking into account that 41% earn more than RM5,000 and that the top 20% earn average of RM13.6k, then we are looking at a small pool of between 20-40% of people affording to buy houses.

The survey covers affluent areas, and I suspect its to plan for building more affordable homes for the those households who can afford to earn nearly triple the national average income.

BTW, looks like I can’t afford a house in Klang Valley if want to buy now.

Below is the article from the Star:

You must have an average household income of RM14,580 a month to afford a home in the Klang Valley, according to a recent study.

The study – spearheaded by Sime Darby Property Bhd in collaboration with the Faculty of Built Environment of Universiti Malaya – takes into account the current household spending trend, price of homes and mortgage rates.

It found that certain groups of buyers interested in strategic areas can have access to houses that are priced at 56 times their household income.

The study also found that this same group can afford to spend up to 26% of their monthly household income to service a mortgage.

It identified strategic areas in the Klang Valley that are considered not only accessible but have the potential to appreciate in value. They include Nilai, Denai Alam, Bukit Jelutong and Bukit Subang.

A report of the study said that houses in selected areas in the Klang Valley remain accessible to homeowners who may be looking to invest in a second home.

The Housing-Income Index which was launched here yesterday by Urban Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman Dahlan, who said the survey results would be useful for potential house buyers.

“The Index and its key findings had been reviewed by the ministry, and we find that the information is valuable as it can help policy makers and developers work hand-in-hand to build more houses that are not only accessible. but which can appreciate in value,” he said.

Abdul Rahman hoped that other property developers and the academia can carry out similar surveys in the country.

Based on the findings, Sime Darby said that 68% ofplanned housing schemes in the Klang Valley were in the accessible range.

“We intend to utilise the results to develop innovative, high quality products that are accessible and meet market needs,” said Sime darby Property managing director Datuk Seri Abd Wahab Maskan.

Household Expenditure
[image from The Star]

The Housing-Income Index was developed to gain a better understanding of home-owner profiles, specifically household incomes and spending patterns in relation to owning a home.

The study covered 1,529 respondents, of whom 1,183 were home owners at 12 locations: Bukit Jelutong, Denai Alam, Bukit Subang, Bandar Bukit Raja, Subang Jaya, USJ, Putra Heights, Ara Damansara, Mont Kiara, Melawati, Kajang and Nilai.

source: http://www.thestar.com.my/News/Nation/2014/02/18/Klang-Valley-still-affordable-A-household-needs-monthly-income-of-RM14580-to-buy-a-home/

Welcome 2014!

December 31st, 2013
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Happy New Year Folks! Wishing everyone a great year ahead.

Its Visit Malaysia 2014 so let’s put up our best for our visitors.

Times are going to be hard so…

Tight belts

 

[image credit: http://andreasjenk.wordpress.com/2011/08/06/tightening-our-belts/]

My take on housing woes

October 17th, 2013
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This is some sort of a record. My last posting was on 30th August! Plenty of things I want to write about, but lack time for proper research and writing. End up tweeting those issues I wanted to blog about.

Anyway, I was responding to a posting in FB which stated “So HK and singapore house prices to come down by 20%. Malaysia how?”  and thought why not collect those responses and blog it. Basically, what I think should be done to curb prices. Apologies for the informal language.

in my taman which is abt 13 yrs old, the new phase being constructed which is 2.5 storey is frm 800k to 2.2mil. The land was bought so long ago. Building material n construction quality is average even though this company is top 20 in malaysia. First phase years ago was 140k. So what justifies the price? Labor? Material? Advertising? Value added stuff?

Govt is being too soft. Should review pricing structure. If developers threaten no prob, can take over projects. Deny license for houses that are too big. Why need 24*80 3 storey house when most families are getting smaller? Just for once in a while relatives visit? 20*70 or 22*75 is ok already.

Labors are moved around from project to project as well. Cost is the spread among projects.

House price should be on land purchase price, not land current price.

Limit an individual to own 3 house max.

Foreigners limit to 10% of any house project and house price min 1mil.

House below 5 yrs not allowed to be sold unless owner pass away or migrate or ill etc.

Stop building houses in hard to reach places for low income group. They r the ones who need public transport. Let bungalows or high condo be built in outskirts.

Houses in city area must not be cost more than affordable monthly repayment amount of 1/3 of salary of average msian.

 

Yes, construction and housing is one of the backbone of country development. But if things that are being developed is of little benefit, then no point developing them. We can’t wait for the “trickle down” effect to benefit the rest.

MALAYSIAN INDIAN AGRO FOOD AND INNOVATION SEMINAR MIFIS 2013

July 23rd, 2013
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Posting this on behalf of organisers. They are organising a seminar on agrofood industry (basically agriculture related to food production – fruits, vegetable, fisheries, animal rearing etc). Those interested can click on the link below or visit http://buoory.blogspot.com/2013/07/malaysian-indian-agro-food-innovation.html

Good opportunity for entrepreneurs to learn about agriculture industry and some of the schemes available.

MIFIS[click for larger image]

 

MAICCI opens 4th info center for…

April 11th, 2013
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You’ll be thinking that a chamber of commerce and industry will be focused on trade, investment, and commerce issues for its members’ benefit. Never knew you can also be a mouthpiece for politics. Why not use the info center to provide info on your core business? Wonder if the allocation they received had anything to do it.

Don’t these entities practise apartisan/non-governmental concept?

This is the objectives of MAICCI:

Our Objectives

The objective for which the Chamber is established is the promotion, protection and advancement of all economic interests of the Malaysian Indian Community. In furtherance of these objectives the Chamber undertakes the following activities:

  • Facilitate and assist Indian merchants, traders and manufacturers to form Indian Chambers of Commerce & Industry in the States of Malaysia and at district and/or regional level.
  • Promote cooperation among the various Indian Chambers of Commerce and Industry in the States of Malaysia and coordinate their activities.
  • To make representation to the Government of Malaysia or any other State or country on matters affecting the economic interests of its members and the Malaysian Indian business community.
  • Represent the views of the Malaysian Indian Business community – in appropriate local and international organization and bodies;
  • To promote the socio-economic development of the Malaysian Indian community and nation and thereby contribute towards socio-economic development and unity in Malaysia.
  • Promote social welfare activities as well as organize or sponsor exhibitions, seminars, forums and meetings and manpower training programmes beneficial to the socio-economic development of its members, the Malaysian Indian Business community and the nation.
  • Collect, collate and disseminate information relating to economic matters.
  • Liaise with other Chambers of Commerce & Industry and other economic organizations and participate in trade and industrial missions.
  • Define and modify custom and practice relating to economic matters to facilitate the transacting of business.
  • Arbitrate in the matter of disputes between the members with the consent of both parties.

source: http://www.maicci.org.my/aboutus/index.php?doc=Our%20Objectives

and this is what they recently did:

The Malaysian Association Indian Cham­ber of Commerce and Industry (MAICCI) has unveiled its fourth information centre here.

The centre, which comes after similar kiosks were launched in Johor, Penang and Malacca, is to disseminate information about Barisan Nasional’s track record in governing the country.

MAICCI president Datuk K.K. Eswaran, who launched the centre, said such a platform was necessary for the public, especially the Indian community, to be made aware of Barisan’s good deeds.

“We don’t want anyone to be fooled by the Opposition which until now does not even have a symbol to represent the pact.

“It may promise a whole lot but you can count the number of promises fulfilled,” Es­­­­­­waran said, while slamming An­­war for not looking into the welfare of the Indian community during his tenure as Deputy Prime Minister.

source: http://thestar.com.my/news/story.asp?file=/2013/4/11/nation/12955053&sec=nation

 

What you should be saying is that members should make a wise decision based on track record, manifestos, global challenges etc., and leave it at that. That’s professionalism, ethics and integrity. Or if anyone asked your comment, you can answer in personal capacity.