Malaysians Buckle Under The Rising Cost of Living
All is not well amongst the pockets of the rakyat with main concerns centered on the rising cost of living and its domino effect on other areas such as housing affordability, as found by the iMoney National Budget 2016 Sentiment survey. The cancellation of subsidy for fuel, weakening global economy, tumbling currency and political instability have further exacerbated the rising cost of living, which is found to be the biggest concern among Malaysians.
“The survey results speak volumes. The cost of getting by in Malaysia is steadily increasing, and has become a huge deterrent in first property ownership, especially in urban cities. Perhaps the authorities should look at the bigger picture in helping Malaysians manage their money better and achieve their goal of buying their first home. Part of improving money management includes maintaining a healthy credit report, which can easily be done with good credit card record,” said Lee Ching Wei, Co-founder and Group CEO of iMoney.
Cracking under the weight of rising cost
The implementation of GST combined with the recent abolishment and reduction of both the fuel and road toll subsidies had many Malaysians reeling from the sudden increase in their expenses. 65% of the survey respondents believe that GST has severely affected their finances, and blames GST and the lack of proper execution for the escalating cost of living. 80% of respondents want the government to reduce the GST rate, while 68% want authorities to improve price regulation to deter errant businesses from rampantly increasing their prices.
In 2013, the Government introduced the Bantuan Rakyat 1 Malaysia (BR1M) in an effort to ease the burden of the lower-income group in Malaysia. In the first year, RM2.6 billion has been disbursed to around 5.2 million households, which represents the majority of the Malaysian households.
A resounding 93% of respondents who were eligible for BR1M said that the Government handouts were not sufficient to assist them in coping with the rising cost of living. The survey shows that more than half want more subsidies from the government, rather than BR1M handouts.
“The overwhelming responses that we have received all point to one main theme: Malaysians are seriously struggling with the rising cost of living, and they are of the opinion that the main driver for the skyrocketing cost is the Goods and Services Tax (GST),” said Lee Ching Wei, Co-founder and Group CEO of iMoney.
The elusive housing dream
Although Malaysian property prices are rising at a slower pace following some cooling measures introduced by the Government and Bank Negara Malaysia (BNM), a whopping 92% of the respondents say they are still unable to own a home. The survey saw that 39% of Malaysians are still apprehensive over high property prices.
To draw a picture, the survey found that 42% of Malaysians are only able to afford properties that cost about RM160,000, which translates to RM850 in repayment a month. With PR1MA homes in the Klang Valley costing more than RM200,000, the majority of respondents do not feel that government and central bank initiatives are fully addressing the issue of housing affordability.
The rakyat believe that more aid is required to help them finally own a home. The most popular suggestions are to lower the interest rates (38%), criteria (20%) of home financing, and tax relief (18%) on home loan interest rates.
The information and/or data from the iMoney Budget 2016 Sentiment Survey may only be rebroadcast or republished with full and proper credit and attribution to “iMoney Malaysia.” This survey was conducted between October 5 and October 15, with a sample of more than 2,000 Malaysians.
Established in 2012, iMoney.my has broken new grounds on personal finance in Malaysia and is now the leading financial comparison website in the country. As a firm advocate of jargon-free financial information, iMoney believes that everyone should be adequately informed before making any financial decisions. iMoney.my was born as a dedicated multi-function online platform providing the latest information and news on banking products and services that are relevant to all Malaysians. It is the number one personal finance comparison service in Malaysia, Indonesia and Philippines. Over the last year alone, iMoney has originated USD1.2 billion in home loans, 100,000 credit card and personal loan applications and now works with more than 50 financial institutions across 6 countries.
 65% of survey respondents currently reside in Selangor and Kuala Lumpur