Low-wage woes
ONCE again, a survey published by the Real Estate and Housing Developers’ Association (Rehda) shows that financing issues and, in particular, high loan rejections as well as lower-than-expected loan financing from banks continue to hinder potential housebuyers from owning their dream homes.
In the past, Rehda blamed Bank Negara’s prudent lending guidelines that were implemented from the beginning of 2012 for the slowdown in the property market. However, the central bank has reiterated time and again that those who are financially viable will have their loans approved. It has come up with the numbers to back up the claims.
It’s not that banks are not lending. The loan growth in recent months bucks the claims made by property developers that banks continue to be tight with their lending, as loans for property have steadily moved up. It’s the affordable housing price band of the property market that faces the most loan rejections.
The real reason is that wages are low, even for those considered middle-income earners. Yes, property prices have risen much faster than wages, but even with the various federal and state affordable housing schemes to help ordinary wage earners own their first ever home, it’s still a struggle.
Why? Just consider the cost of living and how inflation has become ever more pervasive. The recent inflation data from the Statistics Department shows prices relentlessly rising and it’s for the day-to-day items that burdens the ordinary wage earner. It’s not just those in the so-called B40 segment of household income that are struggling, but also the M40, defined as households with incomes ranging from RM3,860 to RM8,319.
Disposable incomes have shrunk or disappeared, more so for those in the B40 group, while those in the lower tier of the M40 find it a struggle too. Younger M40 earners will find it an uphill task to even buy a property and someway or somehow, there must be programmes on the ground to help them in managing their finances and even get new skills that can mean higher salaries and wages. If wage earners are finding it hard to make ends meet, how can they even afford the so-called affordable housing?