Researchers from Durham University, Monash University, and Sunway University argue that if a household allocates more than 30 percent of its income to housing expenses, the property is considered unaffordable. 

They assert that this guideline, stemming from the Great Depression, is outdated and arbitrary, not aligning with the needs of Malaysian households and leading to suboptimal policies.

In a statement, they emphasised the necessity for a more precise, data-driven local indicator tailored to Malaysian policymakers and observers.

The three universities recently collaborated with Ipsos Malaysia on a study examining housing affordability. 

The study aimed to fuel policy discussions and offer data-driven estimates for Selangor's affordability threshold.

According to Selangor household research, a more accurate expense-to-income ratio is 23.5 per cent. 

The range for different scenarios varies between 20.6 per cent and 28.7 per cent, notably lower than the conventional 30 per cent.

Revising the indicator from 30 per cent to 23.5 per cent is anticipated to classify more households as 'house-poor,' indicating those perceiving housing costs as a financial burden.

"This study confirms that the 30 per cent threshold is outdated and does not serve the needs of the data-driven policy-making process in Malaysia," they said.

They believe that these findings will contribute to existing work on measuring housing affordability, particularly in understanding how households perceive affordability. The researchers anticipate that the study will enable the government to enhance policy initiatives and aid programs by tracking and monitoring housing affordability for Malaysian households through the Central Database Hub initiative.

"Over time, under the stewardship of the Department of Statistics of Malaysia (DOSM), the government can also look to possess longitudinal data that measures the well-being of citizens and their housing affordability situation to inform and refine its policy-making processes and set new examples of best practices for the region," they said