Owning And Investing In Property Remains A Priority For Malaysians But Dream Is Hindered By Stringent Bank Regulations

Owning And Investing In Property Remains A Priority For Malaysians But Dream Is Hindered By Stringent Bank Regulations

Kuala Lumpur, 19 October –A survey by the iProperty Group, Asia’s leading online advertising business serving the real estate industry and part of REA Group, has revealed that the love affair for property remains strong but property ownership is hindered by stringent bank regulations.

The iProperty.com Asia Property Market Sentiment Survey (H2) 2016, which has been conducted half-yearly since 2011, is the longest-running study of its kind in Asia. The survey was conducted on iProperty Group’s leading websites in Malaysia (iProperty.com.my), Indonesia (Rumah123.com and rumahdanproperti.com), Hong Kong (GoHome.com.hk and Squarefoot.com.hk) and Singapore (iProperty.com.sg).


The survey polled close to 15,000 respondents and 31% of respondents were from Malaysia 31% from Singapore. 23% from Indonesia and 16% from Hong Kong.  71% of respondents were aged between 21 to 40 years old. 38% of respondents where those who already owned a property and were interested in buying another, 26% were first-time home buyers and 14% were just monitoring the market.

Commenting on the survey findings, REA Group Chief Operating Officer – International, Arthur Charlaftis said that the survey findings showed that first time buyers and investors are keen on purchasing property but are challenged by strict bank regulations as well as saving for a down payment.  

“The largest obstacle in purchasing a property – whether it be a first or for investment – is access to finance and securing a mortgage. This can be a significant challenge, especially in an environment where there are significant cost of living pressures,” said Mr Charlaftis.


Demand for Affordable Housing Remains Strong

Demand for housing, especially for young or first-time home buyers, is still strong. Respondents are looking to purchase newly developed property and most respondents (69%) took between one to five years to save for a down payment. 69% of respondents indicated that they have a budget of below RM500,000 to purchase a property.

Most respondents (64%) are either looking to purchase between 6-12 months from now or between 1-2 years. Almost a quarter (23%) are looking to purchase in the next 6 months.

The Dream Vs Reality

An overwhelming number of respondents (85%) agree that it is harder to buy a home today compared to previous generations. As for the future, respondents also feel that it would be harder for future generations to buy a home.

A residential property priced at RM500,000 and above is only within the reach of less than 6% of the Malaysian population, whose households earn at least RM15,000 a month. Given the prospects of rising household income, half of Malaysian households could most likely afford property valued between RM200,000 and RM400,000.

An income/affordability study by the Malaysian central bank focusing on four income group categories indicated that the average RM6,000 monthly income earner could afford a property valued at RM360,000, while those with a net monthly salary of about RM4,800 could afford a RM265,000 house.

Want More Measures to Meet the Demand for Affordable Housing

According to the Bank Negara Malaysia (BNM) Report 2015, It is estimated that the nation requires 202,571 new houses annually between 2016 and 2020 (or 2.5 times more than the number of houses built annually in the last five years) to match the estimated growth in households. The supply should come from both public agencies and the private sector.

Given the high demand for affordable housing, it was not surprising that a significant number of respondents felt that the government needs to do more to provide affordable housing. More than half of respondents (53%) also felt that the government should also regulate the prices of newly launched properties by developers.

Strong Interest from Singaporeans Wanting to Purchase in Iskandar Malaysia

Within Iskandar Malaysia, Singaporean respondents showed increased interest in Nusajaya, up from 59% in H1 2016 to 84% in H2 2016.

Affordable property prices, excellent bilateral ties between Singapore and Malaysia, and expected enhanced connectivity by 2018 via the RTS Network were the top motivations for investing in Iskandar Malaysia, unchanged from H1 2016.


“Despite predictions that the residential property market is likely to remain flat this year, there is increased demand for affordable homes, particularly through a growing, young population looking for properties in the major urban centres,” said Mr Charlaftis.

“While Malaysians are concerned about the rising house prices and affordability, property is still viewed the most attractive investment choice and this is due to capital growth opportunities and it’s also more stable compared to other assets.”

The full survey findings can be downloaded for free from http://www.iproperty.com.my.