Malaysians struggling to cope with rising cost of living: Survey

PETALING JAYA: The rakyat's main concerns centre on the rising cost of living and its domino effect on other areas, such as housing affordability, according to the iMoney National Budget 2016 Sentiment survey.

The financial comparison website conducted the survey between Oct 5 and Oct 15, from a sample of more than 2,000 Malaysians.
The removal of fuel subsidies, weakening global economy, tumbling currency and political instability have 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 a good credit card record," said iMoney co-founder and group CEO Lee Ching Wei.

The implementation of the Goods and Services Tax (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.
About 65% of the survey respondents believe that GST has severely affected their finances, and blame GST and the lack of proper execution for the escalating cost of living. About 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 was 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 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.
"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 GST," added Lee.
Although Malaysian property prices are rising at a slower pace following some cooling measures introduced by the government and Bank Negara Malaysia, 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.
The survey found that 42% of Malaysians are only able to afford properties that cost about RM160,000, which translates into 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.