Update: Read the results here: Do you buy a House or Car first? [RESULTS]
Call it the “coming of age” or the “they’ve all grown up” phase from the parents, but at some point, in your working life, a mostly unavoidable question will appear: “To buy a house or buy a car first?”
To buy a House or a Car first?
Questions like these always get very bi-polar answers. You’ll get the one side that tells you to buy a house and another side that tells you to “just get a car first lah”. However, it’s not that simple as both purchases cost a lot of money and one appreciates while the other depreciates.
Kindly spare us a minute or two of your time to fill in the survey below by the 31st of August 2018. Rest assured that your information is anonymous and you do not have to provide your name nor IC number. (The survey has now ended, thank you for your contribution)
Why can’t people afford a house in Malaysia?
It is no secret that both property and car prices in Malaysia are at sky-high levels. Car prices in Malaysia have always been somewhat expensive, especially foreign cars, which have higher taxes. Foreign branded cars not only have higher local excise duties, but there are also import taxes on top of that.
Property prices, however, have been increasing madly. The price increase is most significant in Kuala Lumpur, with the prices decreasing the further away from the city centre. Just end of last year, Bloomberg did a piece on Malaysia’s house affordability, citing that the reason why more people cannot own houses is because the prices are simply way too high – not that people are unable to get loans, which have approvals that are close to 70% in our major cities.
The low-income problem of many
The increase in property prices or car prices is one thing, but the stagnating salary growth in Malaysia is yet another factor that affects a lot more. As we all know, the cost of living has been increasing, prices of everything from your teh tarik to your baby milk is going up. What hasn’t been going up however, is the income of many people.
MIER (Malaysian Institute of Economic Research) is saying that the real the problem isn’t the rising cost of living, but that the income levels are too low. The current government is looking to address this issue by bumping up the minimum wages to RM1500, but in gradual stages.
See more: How much do you need to earn to afford a house in KL?
Why don’t House or Property Prices drop?
There actually has been a slight decline in property price in 2017, according to NST’s article on a downtrend in property prices. Even with the decline, however, prices are still out of reach when compared to their monthly earning. The median house price in our country is around 4.4 times the median annual household income, which puts house ownership seriously out of reach for most people – especially those in the B40 group.
See more: The T20, M40, and B40 Income Classifications in Malaysia
Do fill up our little survey and share with us by 31st August 2018 and we will publish the findings after that. So do share with us!