The Malaysian housing industry is efficient and competitive — the government should just focus on public housing

Last week, we provided our data-based analysis that contradicts the prevailing myth that housing is generally unaffordable in Malaysia. At the prevailing median household income of RM5,209 a month, and allowing 50% of disposable income (of RM4,543 a month) to be spent on fixed commitments (home mortgages and instalments on car loans), it translates into a median affordable house price of RM350,000, higher than the RM330,000 median house price for all of Malaysia in 2022, according to the National Property Information Centre (Napic) (see Chart 1). This conforms to the fact that the home ownership rate has gradually risen since 2012 and is now about 76% (see Chart 2). The reason is that the ratio of average home price to average household income has gradually fallen since 2012 (that is, income rose faster than house prices) (see Chart 3).