PETALING JAYA: Property experts and those renting apartments say apartment rentals in Kuala Lumpur may be the cheapest in the world for Westerners but not locals.
Those who are renting apartments disagree with the findings of Rentcafe, a US-based apartment search website, that Kuala Lumpur is the cheapest place in the world to rent apartments.
A study by Rentcafe showed that those renting apartments in Kuala Lumpur need only spend about 20% of their income on rent.
Executive director of Jones Lang Wootton, Prem Kumar, said, Kuala Lumpur was still a localised market and domestically driven.
“Almost 90%-95% of the market is domestically driven. And the rental rates would have to correlate to the sort of purchasing power the current local consumers have,” he told FMT.
Prem said there was always a misconception by expatriates who generalised the Malaysian property market as being cheap.
“You have to look at the context of the local people. How many people in Malaysia can really afford to pay RM5,000 a month as rental? The numbers are very limited.
“But somebody who comes from the United Kingdom would say ‘oh it’s only GBP1,000’, that is fairly cheap,” he said.
Chief executive officer of Zerin Properties Sdn Bhd, Previndran Singhe, said apartment rentals in Kuala Lumpur were the most affordable among major Southeast Asian cities.
However, he felt that worldwide, Ulan Bator in Mongolia offered cheaper rentals than Kuala Lumpur.
Batu MP Tian Chua said Rentcafe had obviously not taken into consideration living conditions for renters in Kuala Lumpur.
Speaking to FMT, Chua, who is also PKR vice-president, said although rent might be cheaper, Kuala Lumpur renters were forced to spend more in the long run due to poor living conditions in the city.
“For example, you might have a cheap place to rent but then connectivity in terms of public transportation might become an issue,” he said.
Meanwhile, tenants in the city regard the rental rates in Kuala Lumpur as high.
Chia Man Weng said: “Location sets the line for price of rental in Kuala Lumpur. Those apartments which have easy access to LRT and train stations will fetch higher rentals.” Chia pays RM1,200 a month for his apartment unit.
Another tenant Nur Ihsan Fadhlina Azizan said she had to co-rent with another person as the rental was steep. She can only afford a room that costs RM230, with incomplete facilities.
“I get a cheaper rental price by sharing the room, but even so they are not fully furnished,” said Nur Ihsan.
House owner Selvaraju said supply and demand, as well as location, had to be considered when renting houses and apartments.
“For areas such as Petaling Jaya and Brickfields, prices for each room can be between RM1,200 and RM 1,400 easily, while prices for houses can be as high as RM3,000,” said Selvaraju.
The US-based Rentcafe says the median household income of those in Kuala Lumpur is US$22,400 (RM96,052) and that average rental per year is about US$4,500 (RM19,296).
Rentcafe based its study on Pricewaterhousecoopers’ (PwC) latest Cities of Opportunity report which lists the best cities to work and live in. Kuala Lumpur is number 20 on this list.
The Cities of Opportunities report ranked the 30 best cities by analysing indicators such as infrastructure, intellectual capital, sustainability and ease of doing business.
Ivy Chong contributed to this article.