Housing affordability at district level in Perak

Abstract

The State Government of Perak is highly concerned with the issue of housing affordability. Affordable housing is important as housing is a pressing necessity, especially for B40 income households in Perak. Studies have shown that Malaysia is presently struggling with the issue of housing affordability whereby its median multiple for housing affordability in the year 2014 was 5.1. In Perak, soaring house prices have made it almost impossible for the middle-income group to afford a home. The drastic changes in housing prices have affected the affordability levels in Perak. This study compares household income against housing prices in each district in Perak. The data were collected from primary sources in the form of focus group discussions, roundtable discussion and interviews with the main stakeholders in Perak coupled with secondary data and content analysis to identify housing affordability in Perak. The study found weaknesses in the implementation of housing policies and programmes for different income groups in Perak. Due to data limitation, this study adopted the median multiple approach in determining housing affordability for the districts. Data on annual income was sourced from the Department of Statistics Malaysia’s Household Income Survey for the years 2012, 2014 and 2016 from which the Housing Affordability Index was generated. Based on the Index, housing affordability for most districts in Perak is at the seriously unaffordable level. The increase in the median multiple of the districts can be attributed to the increase in house prices which was disproportionate to the increase in the income of the population. The findings of this study can be used to aid the state government in their endeavours to provide quality affordable housing policies and programmes for Perak residents.