Professor who predicted clash between great powers
talks about the next challenges ahead, including forestalling conflicts
and finding a way forward, perhaps through ‘rivalry partnership’.
Prof Allison: The souring of bilateral ties
caused by the ongoing trade dispute between the US and China risks
creating the politics, perceptions and psychology that make a clash
between the two countries harder to avoid. — China Daily/ANN
A letter written by He Tingbo, president of HiSilicon, a
semiconductor company owned by Huawei, was made public on Friday. The
letter is a touching one and has won public support. In the letter, He
said that employees of the company embarked on the most stirring journey
in technology history in recent years to make backup products for
Huawei and now these products will finally be put to use.
The economic data of China and the US for the month of
April was not good. There are divergent views on the reasons for China's
declining retail sales growth rate and especially, its industrial
output growth. But amid China's overall expectations that a trade war
could have some impact on the economy this year, one month's
unsatisfactory data is socially and psychologically affordable.
The feedback received was consistent. People told me that they worry about the situation, some even wrote in to share their concern.
A reader by the name of Yap wrote me an email about his observation after reading my article.
“I always doubt how a family with a median household income can survive in KL. Based on my calculation, there is no way a family with two children can survive in KL with RM6,275 without accumulating bad debt or spending 4.5 hours to travel on the road. Housing is one of the factors, but not the only one,” he wrote in his email.
Belanjawanku, an expenditure guide launched by the Employees Provident Fund (EPF) in early March states that a married couple with two children spend about RM6,620 per month on food, transport, housing, childcare, utilities, healthcare, etc.
However, the median household income for Malaysians in 2016 was RM5,228. While the median income of M40 group (Middle 40%) was RM6,275, which means five out of 10 households in this category received RM6,275 per month or less. This is far below the RM6,620 required for a family with two children to stay in the Klang Valley.
Another alarming fact is... Belanjawanku compiles only core living expenses without including long-term financial planning tools such as education funds or investments. The actual budget constraint can be more severe if we take them into account.
The living cost in major cities is inevitably higher than in small towns or suburb areas.
As such, when we discuss housing affordability in the cities such as Kuala Lumpur and the Klang Valley, we shouldn’t impose the same benchmark of RM300,000 as everything else is more expensive in the city. Affordable housing should benchmark against the cost of living of the area.
Based on the research for Belanjawanku, even if housing was provided for free, a household of four would still need RM5,750 to sustain their lifestyle.
The transportation cost alone is RM1,040 for a family, higher than the RM870 allocated for housing.
Therefore, if a family is looking to lower their cost of living, moving to suburb areas would allow them to have a more affordable budget.
According to a news report which quoted information from brickz.my, the housing prices in KL are five times higher than in Seremban, with median housing price of RM1mil (RM940 psf) in the KL city centre, versus RM200,000 (RM210 psf) in Seremban.
Suburbs which are nearer to KL such as Klang and Shah Alam also offer attractive housing prices with a median price of RM340,000.
For families who stay in the city centre and plan to reduce their cost of living, they can consider moving to suburbs to enjoy a better quality of life, and leverage on the improved public transportation which offer hassle-free travelling from suburbs to city centre.
Although high living cost is a concern for many Malaysians, KL is ironically found to be the cheapest city to live out of the 11 major cities in Asia, according to the 2018 Wealth Report Asia.
We are “cheaper” or ranked lower than our neighbouring cities, including Bangkok, Manila and Jakarta. KL, Manila, and Jakarta are also the most price competitive cities when it comes to the residential properties segment.
Why are we still facing the challenge of high living costs despite being the “cheapest” city in the region? The underlying factor is because of the low household income earned by most Malaysians, as the previous government failed to transit us to a higher income nation.
In his email, Yap mentioned that “I always imagine what Malaysia can be if there were no leakages. Hundreds of billions could be spent to stimulate various industries. Our GDP per capita could be close to if not similar to Singapore’s”.
That is the vision and sentiment shared by a majority of Malaysians. With the new government that promises to be more transparent and efficient, we hope that one day, we can afford to live comfortably in any city we wish to, with a higher household income.
Datuk Alan Tong has over 50 years of experience in property development. He was the World President of FIABCI International for 2005/2006 and awarded the Property Man of the Year 2010 at FIABCI Malaysia Property Award. He is also the group chairman of Bukit Kiara Properties. For feedback, please email bkp@bukitkiara.com
