Ever wondered how rents in KL compares globally? We are here to shed light on KL’s rent performance in comparison with major cities worldwide.
Most Malaysians can agree that renting in Kuala Lumpur, the capital of Malaysia to be extremely expensive. Starproperty.com shed light with an interesting article about what its like to rent in big cities from around the world. The result came as a shock to us when researches showed that Kuala Lumpur is actually the most affordable city in the world, according to a report by RENTCafé.com. Researchers say that the living standards of various cities reveal that Kuala Lumpur is the most rent affordable city by looking at the ratio of average rental cost in comparison to the average household income. This suggests that only 20% of its dwellers’ income is spent on rental. While we take comfort with this finding, it is worth looking at other cities to determine the difference in rental standards in those regions or countries.
According to Trading Economics, Germany has a home ownership rate that ranks among the lowest in the developed world, with an average of 52.89% from 2005 until 2015. The unique situation in Germany is due to its historical circumstances that goes way back t0 the 1930s and 1940s. After World War II, post war Germany was in need of millions of housing units, which were supplied by the government. This robust housing regulations have extended to the rental market, and the state governments can cap rent increases to no more than 15% over a three-year period. Berlin’s rich history which involved the second world war has resulted in its rent control today. According to RentCafe.com, Berlin is ranked as the 12th most affordable city with a rent-to-income ratio of 30%. This makes Berlin as one of the western European cities that made it to the upper part of the affordable rent list.
Talks at Brexit have cast a dark cloud over the United Kingdom. It played a part in the recent drop of average annual rents in Central London and Greater London, 1% and 4.7% respectively. This has come after years and years of rises in rental rates. This places London as one of the most rent-burdened cities in the world and takes up 40% of its average citizen’s income. Despite the recent events affecting rent prices in Malaysia, rents in KL pales in comparison with London’s steep prices.
The Housing and Development Board (HDB) statistics shows that 82% of the Singaporean resident population live in lease accommodations. This is thanks to the provision of HDB flats sold on a 99-year lease agreement in Singapore. It’s a large accomplishment for a small city state with little land resources. Despite having the highest median household income among all 30 listed cities, Singaporeans fare poorly with 44% of their income being spent on rental fees, putting the city at the lower part of the list at number 25. This places KL in a higher affordability bracket, making KL an attractive place to live.
It is comforting to know that Kuala Lumpur is considered to be one of the most affordable cities to rent in the world. However, this does not remove the day-to-day challenges that Malaysians face in regards to rent. Lets hope that the numbers shown in paper reflects in real life.
Interested to know if you should rent or buy a property in KL? Find out which works best for you.