Different Perceptions of Affordable Luxury
Propwall, Photo Credit to Propwall
clock 10-09-2019
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Everyone wants to have their luxury, that is a given. It is an aspiration that is shared by all the three income groups regardless of race, creed or social standing. The low-income earners (B40) want luxury, as do the middle-income group (M40) but it is the high-income earners (T20) who exudes in luxury.

“[But] the perceptions of luxury among the B40, M40 and T20 household groups are different,” said leading global property consultancy Knight Frank Malaysia managing director Sarkunan Subramaniam.


But what is an affordable luxury in the property context? To Sarkunan, affordable luxury housing refers to premium properties delivered in affordable pricing, that is to say, at levels that the buyers can afford given their income levels. Affordable premium properties may include modern minimalist homes with smart features in a secured community with recreational amenities that exude a luxurious lifestyle, he told StarProperty.


But what works for a person may not work for another, says Veritas Design Group associate architect Aina Zuber In the property context, the definition of luxury is a combination of generous space, prime location with high-end amenities. In affordable luxury, one of these elements might be compromised, she said.


“The definition of luxury by younger consumers may be different from the typical luxury we see every day. For example, luxury for millennials is more about having the full experience of lifestyle that is normally out of their reach. For the older generation, luxury is more on buying something that has quality and lasts longer,” she said.


How does this translate into property design? “The definition of luxury is no longer just about having facilities such as tennis courts and game rooms, stone cladding finishes, bathrooms with hot tubs or even walk-in closets. It is more about getting a quality living: co-living space, accessibility, smart homes and perhaps amenities such air-water purification,” she said.


When cutting across the different income groups, brands of fixtures and fittings that are popular with the mass market may be perceived as a luxury for the B40 group while the M40 group’s perception of luxury is higher and they prefer reputable global brands, said Sarkunan.


The T20 group looks to luxury that commensurates with their lavish lifestyle – homes in exclusive residential districts or city centres that offer spacious accommodation with well-planned layouts and come with high-end fixtures and fittings, he said.


Sarkunan said the mean household income in Malaysia by household groups of B40, M40 and T20 are classified as RM2,848, RM6,502 and RM16,088 respectively. Based on the assumption that the monthly repayment of a property loan should not exceed one-third of the monthly income, the estimations put the B40, M40 and T20 at RM190,000, RM430,000 and RM1.07mil.


In Malaysia, affordable luxury properties targeting the M40 should be priced in the region of RM430,000 to RM600,000, which is what many developers have been eying. However, Sarkunan pointed out that the “affordable luxury” limit varies from state to state (see table).


“[The cap for] prices of [affordable luxury] properties that are deemed affordable for middle-income earners in Kuala Lumpur and Selangor are in the region of RM720,000 and RM590,000 respectively.


For high-rise residential developments such as condominiums or serviced apartments, luxury is often associated with the wide range of facilities, like an infinity pool with city views, gymnasium with branded equipment and Jacuzzi on elevated levels, provided in the development as well as the finishes and fittings of the units.


A reputable property management team and smart features incorporated into the developments are also key points to be considered. For the landed property segment, luxury means better amenities cum facilities within the development such as the setting up of a gated and guarded community as well as the incorporation of modern and smart features within the homes. Luxury also translates to quality finishes and fittings within the residential units.


With such properties, keeping the pricing lower, and not too heavy for the wallet, can be a challenge. While in a luxury development, developers would just pass on the higher cost to buyers, in the affordable luxury segment, they may need to compromise part of their margins to finance additional luxuries, said Aina,


In the current tough market, affordable luxury products may help to sustain developer’s cash flow needs, as buyers who may be reluctant to buy luxury products may opt for affordable luxury products instead, she told StarProperty. On the other hand, there are buyers in this segment who would be willing to compromise on certain aspects in order to own “pocket-friendly” homes with the experience of luxury living, she said.


“This may include projects that are built-in lesser neighbourhoods with extra spacious apartments, with branded furniture and fixtures,” she said.


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