Part 2 Different Perceptions of Affordable Luxury
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 state to state
“[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 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 cashflow 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.