Ipsos Malaysia Calls for Revision of Housing Expense-to-Income Rule to 23.5% for Accurate Affordability Assessment

Ipsos Malaysia is advocating for a revision of the housing expense-to-income rule, which currently sets the threshold at 30%, deeming a home unaffordable if households spend more than this percentage of their income on housing. According to Ipsos Malaysia, this rule is both “outdated and arbitrary” and does not align with the needs of Malaysian households.

Recent Study Reveals 23.5% as More Accurate Threshold:

  • Ipsos Malaysia conducted a study in partnership with researchers from Sunway University, Monash University, and Durham University.
  • The study focused on Selangor households and found that the more accurate threshold for housing affordability is 23.5%.
  • This indicator’s range for various scenarios falls between 20.6% and 28.7%, significantly lower than the conventional 30% threshold.
  • Revising the indicator to 23.5% may classify more households as “house-poor,” indicating that they perceive their housing costs as a financial burden.

Call for Incorporating Monitoring and Tracking of Housing Affordability:

  • Ipsos Malaysia suggests that the government of Malaysia should incorporate monitoring and tracking of housing affordability for Malaysian households in the Central Database Hub (Padu) initiative.
  • This inclusion would enhance policy initiatives and government assistance programs related to housing affordability.
  • The government should focus on local data-driven and more accurate indicators that are relevant and useful for policymakers and observers.
  • Over time, longitudinal data measuring the well-being of citizens and their housing affordability should be collected to inform and refine policymaking processes.

Ipsos Malaysia’s call for a revised housing expense-to-income rule to 23.5% aims to provide a more accurate assessment of housing affordability in Malaysia and improve policy initiatives and assistance programs accordingly.

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