Last week, city dwellers especially the residents in the Klang Valley were alarmed by the Housing Income Index findings, spearheaded by Sime Darby Property Bhd in collaboration with the Faculty of Built Environment of Universiti Malaya (UM), which stated that one needed to have an average monthly income of RM14,580 to afford a home in Klang Valley or, to be more specific, RM12,300 in Kajang etc.
Furthermore, the study also found that certain groups of buyers interested in strategic areas can have access to houses that are priced at 56 times their household income, and they can even afford to spend up to 26% of their monthly household income to service a mortgage!
As the findings have drawn criticisms and caused confusions, Sime Dary Property Berhad then clarified that its Hosing Income Index is merely a guideline to provide information on housing accessibility, especially for Klang Valley residents wanting to upgrade or invest in a second home.
Nevertheless, think-tank Political Studies for Change (KPRU) opines that the index has revealed a trend of soaring housing prices, particularly in urban areas, and further opening up room for speculation. The study failed to reflect the national average income level, but could only be taken as a reference for the higher income groups. Sadly, whilst the high-income group would have opportunities to upgrade their existing home or invest or to buy a second or even more home, the 40% middle-income group – wherein their average monthly household incomes still hover within the range of less than RM5,000 – is unlikely to get their home in the Klang Valley.
The 40% middle income group in Malaysia is always deemed to be the educated and whereupon they can be more independent in earning a livelihood for themselves as well as their families, as compared with the bottom 40% income group.
The extreme cases of poverty seem to draw the most attention, whereas the growing hardship of the middle class has often been overlooked. In fact, the “sandwich class” is not insulated against poverty. The recent price hikes, together with the unproductive jobs, have rendered escalating hardship for them to make ends meet. Next year on April 1, the Goods and Services Tax (GST) will be implemented, and it is believed that the middle-income group will be the worst hit.
In light of this, KPRU urge the government to put serious attention to the impoverished working people before the problem of ‘working poverty’ become severe.