How do I know if property is unaffordable? – kopiandproperty.com

How do I know if property is unaffordable?

If this question is for the common people, then the answer is very simple. If our current income could not support us in buying a property, then the property is unaffordable to us. If we are able to lower our own requirements from a landed property to a high-rise unit or from a high-rise unit to a smaller unit or even from an apartment to a flat, then maybe we can make it affordable again.

Note that there has to be this supply option in the market. In some property markets around the world, this option does not exist even if people want to do it. They may be forced to go for something even more drastic which is to stay say 65km away from the city centre in order to make it more affordable.

So, as a Malaysian, I am very grateful that I think even when it comes to the time for my children to buy a property, they should be able to get one like 65km away from the city centre and they may not mind because maybe it’s flexible working at that time.

Now, I mentioned about the cities where even if you want, you just could not find the options and you just have to earn more money in order to be able to buy a property. Here is the list. Sorry if you want to find Kuala Lumpur inside this list yeah.

Beyond the city, if we look at the country as a whole, here are the top 10 least affordable countries where property is concerned.

What is 18.8 median multiple?

This means that someone earning a median pay who saves every cent of his salary every year will need around 18.8 years to buy a typically priced property in this market. Explained in another way, it means super hard to afford a property unless with Pa Ma bank or Pa Ma help. Sydney is 13.3 times. In other words, even if AUD is amazingly great when they spend in Malaysia, it’s actually quite small when compared to their property price.

Londoners would be another group where they would find everything cheap in Malaysia except when they want to buy a property in the own property market. Not an easy life yeah.

Will it become totally unaffordable some day?

Actually, when no one could buy a property, no transactions can happen. At that time, if the home owner is desperate for buyers, then they will lower their selling price. That’s how we start to see property transactions moving the price downwards. However, if the homeowner has no issues in waiting, then they could continue to rent out their unit while they wait for the price they want.

Alternatively, the government can enter the market and build, build, build and maybe the prices could come down? Nope, only more people could have a property since the government is building more units for them. As for those home owners who does not have financial difficulties, they will continue to hold out for the price they expect. That’s why when transactions happen, usually the prices tend to inch upwards.

Here’s what will happen when property prices become totally unaffordable. Read here.

Happy understanding facts and figures. Plus take necessary actions because if these countries are leading the world, sooner or later more countries will join them.

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