PETALING JAYA: Online property portal PropertyGuru Malaysia has urged the government to look into ways to increase income growth in Budget 2024, as it will boost home ownership.
Country manager Sheldon Fernandez said stagnant wages, increasing property prices and rising living costs have made home ownership out of reach for most locals.
He lauded the government for its various home ownership initiatives and schemes, including promoting affordable housing. However, household income was a key factor as a higher disposable income was necessary to drive home ownership.
Fernandez said median household income grew by only 2.5% last year, compared with 3% before the Covid-19 pandemic. In recent years, he added, there was disproportionate growth between household income and property prices as the latter outpaced the former. For greater home ownership, household incomes need to catch up with property prices.
With government assistance, the gap can be narrowed and home ownership can become more affordable to more Malaysians. In addition, raising the minimum wage will help.
“The biggest challenge in Malaysia right now when it comes to either property prices, affordable housing or income growth, is the execution (of government incentives and schemes),” Fernandez told reporters during a briefing on the consumer sentiment study for the second half of 2023 last week.
On the outlook for 2024, he is optimistic on the property sector, albeit noting that property affordability would still be a challenge for potential homebuyers.
He suggested that while the government could be in the driving seat to raise home ownership, other players, such as property developers should also play their part.
Fernandez said that based on its survey, 56% of respondents intended to buy a property next year, with 54% already halfway through to achieving their savings target and 27% having saved enough.
“Based on the consumer sentiments survey, aspiration is at an all-time high ... and some are ready to go into the market. Investors are ready because the two top buyer considerations, rental income and return on investment, (are favourable).
“At the same time, other factors such as economic growth (play a key role). Interest rates are now paused and hopefully we can continue to see (it remain steady) while the market adapts (to high interest rates).
“We see a lot of foreign investment in higher paying jobs, like data centres, and the government has also been supporting entrepreneurs for SME growth. Hopefully, these measures will spur income growth,” he added.
