support@kopiandproperty.com

Advertisement Banner

No, house price increase was not 15% or 1.5% per year

No, house price increase was not 15% or 1.5% per year

A good friend who’s a super good startup senior management asked me if it’s true that home prices were increasing by 15% per year for the last 10 years or so. I said, it could not be so high. It should also not so high or else, market could have crashed. I told her that probably the house price increase would be closer to 6% if we stretch it longer, say over 20 years or so. Here’s that stretched over 20 year image of Malaysia House Price Index (MHPI).

If we look at periods of 1990 – 2013, it’s an average of 6.3% per year. If we look at average of 2014 – 2019, it’s 6% per year. Please note that recent few quarters, all the numbers are below 6% year. It has been below 6% per year since 2018. So, it’s not true about house price increase of 15% per year or even 1.5% per year. If you like to always get updated numbers, this is the housingwatch.my site. Click here for the MHPI yeah.

MHPI

Average for all may not tell the right picture

The above is an average number. It covers an average of all types of properties. It does not tell what’s really happening to different types of properties. Yes, different types of properties would have a different price appreciation too. Someone who love landed property will always tell you landed is the best and the reasons are etc etc etc. I put etc etc etc because I disagree yeah. Haha. Well, just look at the data below for MHPI by house type and average price 2010 vs 2020.

This image has an empty alt attribute; its file name is image-46-1024x575.png

Best is Terraced and Second Best is High-Rise in % wise

Terraced has increased in price from RM188k in 2010 to RM395k in 2020. Meanwhile, a high rise unit could have increased from an average of RM174k in 2010 to RM374k in 2020. Please do not think too much because under the ‘worse’ scenario, it’s still an increase of RM382k in 2010 to RM659k in 2020 for detached. In other words, if we divide this 72% increase over 10 years, it is still a respectable 7% per year which is 3 times the FD rate of today.

Just need to remember, it’s not about landed versus high-rise

Please do evaluate a property properly and not be too concerned about whether it’s a landed or a high-rise unit. It matters very little depending on what you intend to do with the property. If you will only feel good to stay in a landed, by all means buy a landed and stop convincing yourself that a high-rise may be good. If you prefer to let your kids go crazy in the swimming pool in a high-rise, there’s only one in a high-rise. Unless of course you are buying into an expensive landed home which comes with a club house and club membership fees.

Whichever you love, that’s the best property to buy. Property price over a long period of time will always be okay as an investment. That’s as good as it gets. In the mean time, happy viewing, selecting and deciding yeah. Cheers.

Love news like this and more? Sign up for daily investment news updates. Alternatively, Follow me on Telegram here.

Please LIKE kopiandproperty.com FB page to get daily updates about the property market beyond kopiandproperty.com articles. Else, follow me on Twitter here.

Sign up for KopiWeekly. (only once per week of property, finance, investment news and more)

Next suggested article: Property prices around the world

Property Investment always start with knowledge. Equip ourselves with more here.

Motion arrow towards right
Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Motion arrow towards right
Share on facebook
Share on twitter
Share on linkedin
Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

Advertisement Banner

Facebook Comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Table of Contents

Most Recent Posts

join the family

Like us for daily investment news and more

Hit the like