the growth in housing loans taken out to buy second and third homes exceeded 15 %. this excludes cash purchases. this in turn drove a higher concentration of new supply in higher priced segments, further widening the demand - supply gap for affordable homes. by 2012, annual house price growth had risen above 11 %, almost four times the 10 - year average house price growth between 2000 and 2009. demand for affordable homes has also increased rapidly from the higher rate of net new household formation. this reflects trends that point to smaller household sizes ; the young moving out from family homes earlier, including to take jobs in urban cities ; and an ageing population preferring to remain in their homes than move in with their adult children. such demand pressures have been further compounded by income levels that have not increased in tandem with the increase in house prices. all told, the shortage in affordable housing based on 2014 data is estimated at 960, 000 units. this could rise to one million units by 2020 if further measures are not taken to increase supply of affordable houses and improve affordability. financing measures implemented by the bank along with fiscal measures by the government between 2010 and 2013 did in fact achieve this to a certain degree. house price growth has 1 / 4 bis central bankers'speeches since moderated to 5. 5 %, closer to income growth, following measures taken to dampen speculative activities in the housing market and manage high household debt levels. lending standards that are more aligned with the level of income have also encouraged private developers to shift their focus to the more affordable segments which should help improve supply conditions. approval rates for housing loans by the banking sector remain high at 74 %, with more than 60 % of the new housing loans extended for house purchases below rm500, 000. loan rejection rates for houses in the affordable segment have actually been on a declining trend, falling by 18 % since 2012. nevertheless, there is also scope for financial institutions to develop innovative financing schemes – such as equity finance – to make home ownership more affordable. these include shared ownership schemes where buyers can acquire partial interest in a home, instead of being burdened by an outright purchase. similarly, we have also observed lease - to - own schemes under islamic finance arrangements, where tenants have the option to increase their stakes in a home after leasing for a period of time. bank negara malaysia continues to work with the industry to uncover new opportunities, including through financial education, to support firsttime home buyers within their means. financing therefore is not the issue

are illequipped to make informed financial decisions due to their inadequate knowledge on financial matters, thus diminishing their effective participation in the financial system. symptomatic of this has been the rapid growth in household debt and leverage in a number of countries. this has been particularly prevalent in an environment of ample liquidity and low interest rates. this is also being reinforced by changing social norms, such as social pressures to spend, which has further eroded financial discipline among households. such pressures are further compounded by the rising cost of living in the urban areas. financial capability levels have however generally lagged the socio - economic changes that are taking place, resulting in poor financial management. while financial products and services have become more complex, new delivery channels are also having the effect of increasing the distance between product providers and consumers. for example, more pervasive non face - to - face channels can make it more difficult for consumers to seek information. financial education messages are also often overshadowed by competing commercially driven messages that dominate the delivery channels. while considerable attention has been directed at reforming the incentive structure to better align the interests of financial agents and consumers, such changes need to go further to improve outcomes for consumers. in this environment, the financial education agenda needs to be addressed by the collective efforts of policymakers, non - government organisations, consumer advocacy groups and the financial industry to deliver a sustained education programme that will equip all segments of the population with the necessary financial knowledge to save, invest and to insure against adverse events. the financial education strategies and learning interventions need to be tailored to the consumers ’ conditions, culture and education levels, and to be responsive to their requirements, thereby enhancing their prospects for improving their economic wellbeing. a well designed financial education strategy can encourage greater effective participation in the mainstream financial system, and keep individuals already in the mainstream from being financially excluded as a result of changes in the financial landscape. a recent report by the oecd has highlighted that a lack of awareness of different types of financial products, low level of confidence and poor knowledge of how products work are barriers to financial inclusion. these factors will become more acute in an increasingly complex and technologydriven financial system. financial education has an important role in breaking such barriers. this will require more innovative approaches, broader partnerships and a deeper understanding of the social attitudes. our own experience in malaysia through the work of bank negara malaysia and the credit counselling and debt management agency ( a subsidiary of the bank