Affordable housing expenditure should not exceed RM1,400 a month: Speedrent CEO

KUALA LUMPUR: A key indicator for renting or buying houses in the Klang Valley is RM1,400 a month, according to home rental platform Speedrent.

Speedrent chief executive Wong Whei Meng said if the government intends to build more affordable housing, the monthly instalment, after deducting the initial payment, should not exceed RM1,400.

“Tenants using the Speedrent platform to find a house for rent usually have a rental budget of between RM1,400 and RM1,500, accounting for about 27% of the median household income of RM5,228,” he said in a statement yesterday.

According to the latest report by Khazanah Research Institute, the mean household income in Greater Kuala Lumpur in 2016 was RM10,427, nearly twice the national average.

Those who have the need to rent a house or buy a house are from outside Greater Kuala Lumpur. Therefore, the price of affordable housing should be based on the national income level and should be set below RM300,000.

If families outside the territory want to get a house in Kuala Lumpur, after deducting 10% of the first instalment of the house, they need to borrow RM270,000 from the bank. If the annual interest rate is 4.9%, the monthly instalment is about RM1,433.

In contrast, Kuala Lumpur’s household income is generally high. The housing loan should not exceed 30% of a household’s income. Theoretically, Kuala Lumpur households can generally afford properties of more than RM3,000 monthly instalment.

Wong said the government’s aim to increase the supply of affordable housing is brilliant, but noted that people will not buy properties in remote areas with poor public transport.