Housing Affordability in Malaysia
I love calculating stuff like this.. mainly because I'm so sick of those newspaper articles that don't do their numbers correctly, saying all sorts of dumb things getting people all riled up AND those commentators who keep ranting on about fresh graduates who can't buy houses (newsflash: they shouldn't be buying houses until working for a few years anyway).
So let's all have a reality check here, THIS is what you can afford (a la Suze Orman) based on your TAKE HOME PAY after deducting EPF and income tax.
Also, the calculation is based on maxing up to 33% of your take home on housing BUT your actual loan commitment is set at 28% with another 5% set aside for things like quit rent, assessments, maintenance fees (if you're living in a condo or apartment), utilities like electricity, water and sewage (Indah Water) - these are fixed expenses that a lot of people don't take into account when they buy property then wonder why they're short of cash by the end of the month.. hell, by the middle of the month, a lot of folks are just scraping by.
So there you go, folks - if your household or personal income is at RM10,000 a month, then you should be able to buy a half million property (depending on your savings for the downpayment, that is) with a loan of about RM440,000 and still leaves you enough cash of about RM5,000 for savings, living expenses and transport.
Problem is ... RM500,000 doesn't buy you much in the Klang Valley if you're planning on living close to town. But if you're willing to commute, then you can get pretty good new stuff but way out in the boondocks. Depends on what you want and need in terms of living space, children's schooling choices and so on.
There you go, happy property hunting!
So let's all have a reality check here, THIS is what you can afford (a la Suze Orman) based on your TAKE HOME PAY after deducting EPF and income tax.
Also, the calculation is based on maxing up to 33% of your take home on housing BUT your actual loan commitment is set at 28% with another 5% set aside for things like quit rent, assessments, maintenance fees (if you're living in a condo or apartment), utilities like electricity, water and sewage (Indah Water) - these are fixed expenses that a lot of people don't take into account when they buy property then wonder why they're short of cash by the end of the month.. hell, by the middle of the month, a lot of folks are just scraping by.
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| House Affordability in Malaysia |
Problem is ... RM500,000 doesn't buy you much in the Klang Valley if you're planning on living close to town. But if you're willing to commute, then you can get pretty good new stuff but way out in the boondocks. Depends on what you want and need in terms of living space, children's schooling choices and so on.
There you go, happy property hunting!
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