Kuala Lumpur has especially been branded as "severely unaffordable" with house prices 5.4 times higher than the median income in the capital city. The maximum median range for housing prices compared to median income should not be more than three times the median income.

But only one state in Malaysia fits the maximum median range: Malacca, where housing prices are three times higher than the median range.

The rest are rated between "moderately" and "severely" unaffordable.

Terengganu is the most severely unaffordable of all the states, with median multiple affordability standing at 5.5.

In Kuala Lumpur, the median house price is now RM490,000 per unit, almost double the median house price ranges in all other states.

Penang was also rated as severely unaffordable while Selangor, Malaysia's wealthiest state, has a median house price of RM300,000, putting it at the moderately unaffordable level.

The research was authored by Dr Suraya Ismail, Intan Nadia Jalil, and Puteri Marjan Megat Muzafar and titled "Making Housing Affordable". It said that in the case of Kuala Lumpur, housing prices meant the distribution of house prices was "significantly skewed".

"Of the new properties launched in Kuala Lumpur in 2014, there were no properties launched below the RM250,000 to RM500,000 price bracket, with the bulk of the newly-launched properties situated in the RM500,000 to RM1 million bracket," it said.

The research was launched today by KRI chairman Tan Sri Nor Mohamed Yakcop, and entailed recommendations to reform the housing industry. According to the report, institutional reforms are needed to change Malaysia's approach to housing policies. – August 24, 2015

Reference: http://www.themalaysianinsider.com/malaysia/article/malaysias-home-prices-seriously-unaffordable-says-khazanah-research

This is a situation that is not only being faced in Malaysia. You should take a look at Singaporean properties.

The property price for Malaysia is increase tremendously for the past few years, although some of the people said Property price for Malaysia still at the low side as compared to Spore & Hong Kong, however our salaries is very much lower than them, no matter how invest in property still one of the best investment, as long as we invest it wisely.

Old low cost flats in good location will be in high demand!

However, not many ppl is entitled for low cost :(

Well, it is so true about this market situation within Malaysia yet what are the thing that we as a property buyer can do to ensure we can afford a house?
Work harder to make our income better?
The Gov should take any action in controlling the selling price? Can they do it?
Or Financial institution give some special affordable mortgage programme who those is low income?

I would suggest that build more affordable houses with special terms and condition that only open to sell for those is low income group of people. Not for rich people to goreng goreng. This is my idea initially when i think about the situation of our current over priced property market for the low income group people since last year. But will the developer do it when they need to cut down on their profit making for building it?
For this kind of project i do think developer build the practical apartment will do, no need to build fancy fancy layout and concept. No swimming pool and other fancy facilities that will cost much in construction fee and maintainence fee that burden the buyers.

Good enough to bring down the construction fee and the selling price of houses ?
Hahaha, this might work. I think.

Recently you can see some new properties launch with prices below 350K. May be it is all due to supply and demand. At good times, everybody buy even at very high prices. Now that the market is slow, no buyer, therefore developers have no choice but to offer more affordable properties...

The question is what is the real factor stopping developer from developing medium to low cost housing.

I'm betting there must be something bigger than want to build luxurious unit and make more profits. Obviously the developers are very smart people. I'm sure they understand if they build luxurious units although potentially fetch higher profit but has no taker, they will be equally in a bad condition,

This is a worldwide problem. Income not matching property prices. In my opinion what happen in 2008 World Recession wiped out the large middle class of the world thereby allowing a lot companies to underpay their staff, which leads to the problem we have today. When I first started work 15 years ago my pay was RM2050 but it was enough to buy a medium cost apartment for 98k in Seri Kembangan or Segambut Dalam and Taman Tun Dr Ismail was only 300k then now its 1.1 milllion. So unless the government has a wage ceiling for new entrants to the market this issue will continue.

Focus in how much you can pay for upfront and how much you can from mortgage.