Highest pay bracket may still not mean much, for property.

In many places, including some Kuala Lumpur neighbourhoods, only the combined household income would enable a family to buy a very decent property. I personally define a very decent home as anything above RM1 million. Obviously, my home is below that. Actually, as soon as we look at the landed properties, it would usually be 7 figures or higher. A condo with over 1,400 sq ft in a good neighbourhood is definitely over RM1 million as well. Based on the mortgage calculator from calculator.com.my, (refer to image), the typical monthly mortgage for such a property is around RM4,500. (Assuming it’sRM1 million) Coupled with some typical maintenance fee (either gated and guarded or luxury high-rise), it would rise to around RM5,000 per month. The combined household income to buy such a property should be at least RM15,000. Yea, the family would also need to have a savings of RM100,000 first, as downpayment. Any household earning a RM15,000 combined income would place them in the top 20 percent bracket here in Malaysia. As per a household income survey, the T20 bracket (Top 20) household’s earn a median income of RM13,148 per month. Here’s that report in TheStar.
I used to have teams in Hong Kong, Bangkok and even Singapore. My Hong Kong staffs’ monthly salary is pretty decent, by Hong Kong standard. (Too bad, I am working in Malaysia. Haha).  Anyway, according to an article in Reuters.com, the typical median income for Hong Kong professionals are HK$17,000 (RM9,148) per month. Someone earning HK$40,000 would place him in the top 15 bracket for Hong Kong’s workforce. The only issue is that even for someone earning HK$40,000 RM21,596) it is tough to buy a decent home. The reason is this: Tesla and a similar sized flat Based on the size, we cannot consider it as a decent home for a family but this is the current situation in Hong Kong. As per the article, most people in Hong Kong aspires to own a home and it is a life goal. (Malaysians should have the same thought, right?)  The price per square feet according property agent Midland Realty is now at an average of roughly HK$12,000 (RM6,465) per square foot or (HK$130,000 per square metre). In order to afford a 650 sq ft flat near the city centre, a skilled worker (specialised professional), the person would need to work 20 years. (I think it’s much tougher than this unless the person is a special breed, save everything, non-stop increments and keep getting promotions every couple of years)  Full report in Reuters here. 
Just a few days ago, I was talking to my branch head here in KL. He asked what’s the reason people like living within the city centre. It’s so ‘cramped.’ Let’s define city centre here as anywhere within minutes from KLCC ok. He is not wrong actually. These days, with prices of easily RM1,600 per sq ft or higher depending on the size, it meant that if we want to stay in the city centre, it will be ever smaller sizes. That’s one reason, plus the fact that ever higher density is now the order of the day. Ever higher too and even the Petronas Twin Tower is going to be just another tall building within KL city centre.  Coming back to the reason why. Actually, it’s not that bad. City centre gives lots of flexibility in terms of duration to go office, usually less than 10 minutes. As long as the office is 2-3 stations away or it’s within a walking distance. A typical Malaysian may not be that open to walking but any Malaysian who has worked overseas would know that walking is pretty common and the morning or evening sun is actually okay! (not too hot lah). Expats love it too because most of all the other expats could gather somewhere easily. Versus if one is to stay at the Damansara side and another is staying Puchong side. In terms of accessibility, there is a reason it is called city centre you know. Haha. It is a maximum of 35 minutes away from the KLIA and within a few stops from KL Sentral, we can reach almost anywhere. However, all these brings us back to the reality. Many of these prices would also meant that most would not be able to afford to house their family within the city centre, not even for households with two senior managers and 2 kids. (Coz usually these two senior managers would be driving nicer cars too. Haha.).  It’s always a choice. Duration versus size versus $$. Happy understanding.
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written on 15 Oct 2017
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