A Review of Housing Affordability Disparities in Malaysia

In a developing economy like Malaysia, encouraging homeownership remains a paradox. Despite the government’s major initiatives, more must be done to promote affordable and long-term homeownership. This chapter therefore seeks to analyse the trend or level of housing affordability in Malaysia as well as to propose the maximum affordable house price in Malaysia. The findings revealed that home affordability has deteriorated since at least the year 2000, surpassing the 3.0 MM affordability barrier. Furthermore, in terms of affordable housing prices in Malaysia, pricing disparities between income have been expanding, resulting in a decrease in affordability. This study then suggests that identifying the variables that generate a mismatch or gap between affordable housing and housing affordability is critical for formulating policies to address the problem of housing affordability. This will also help to bridge the gap that exists. This formulation can help to keep house prices in check and decrease excess property.