Tuesday, November 24, 2009

House Prices in Penang Out of Reach for Salary-Man

House prices for average salary-man in Penang is way out of reach.  A typical 3 storey terrace house about 20'x70' will set you back about $900K in the middle of the island. Assuming the current interest at 5.5% pa, and if you have some $$ to pay $200K ( ~20%) of the house, that still leave a balance of $700K, and with 25 yrs repayment period, one will need to cough up $4.3K/ month ( like coughing blood).  Usually the house loan given by the bank shld not be > 30% of the persons net income. So this means, that the person will need to earn or show that he earns about $14K/month.
I guess with market forces where demand exceeds supply, and those who are able to pay for these prices can only be those who have business or earn foreign $$ with more favorable exchange rate to the RM$.
The only option for a salary man will be to live in condos or apt.  However, that too is getting pricier. At the rate of price inflation for properties increasing at a higher rate than salary rate, this category of property may soon be out of reach. Better get one before the prices gets too high. Sigh.

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