Whenever I am asked if the property price is too expensive, I always reply that affordability is something which is not easily benchmarked. It’s not just about salary but also about expenses and on a longer term – about investments too. Too low a salary is also an issue and the solution is what we intend to do about it. Too high expenses also an issue and the solution is to start mastering financial self-awareness. As for investments, the solution is to read a lot more and understand that if we want quick returns, then it’s no longer considered an investment.
Coming back to why I say property prices is really a subjective matter is this: My ex colleague earns a salary which is lower than RM4,000 per month but she has two properties. She DOES NOT have the latest handphone, DOES NOT eat RM29.90 set lunches and DOES NOT drink RM15 Starbucks every other day. She brings her lunch box to the office everyday and she continues to feel happy and proud of herself too.
With all these, she could easily save an additional RM500 per month and when we look at the effects of this RM500, we will realise that it could be used to pay for a loan which is as high as an additional RM100,000! Meaning to say a mortgage payment for RM100,000 over a period of 30 years. [rml_read_more] See my meaning? (Refer to the home loan calculator below)
Yeah, that smallish RM500 could mean buying a RM400,000 or a RM500,000 home. The easy way to do it is just to be like my excolleague. At the same time, I have another
friend who has the latest iPhone, a luxury handbag bought from a recent Japan trip (which she used her credit card to pay for) besides driving a Segment B Japanese car (which is actually nothing so awesome!) who earns twice the pay of my ex-colleague. This person will most probably be renting a very nice condominium somewhere within
By the way, both are perfectly fine. They have their own lifestyles, and their own way of life! After all, is their live. This is why everyone’s affordable home is determined by themselves. Definitely not determined by the Government, not by the developer and not by the salary they actually earn. Happy understanding!