Whenever anyone tells me that the property market of Malaysia is entering a bubble stage and it should burst in the future, I always tell them that there is definitely such a possibility. However, Malaysia’s property market should not be the first to burst when we look at the availability affordable homes versus the very high priced homes certain locations. In fact I am not sure if I want to even rate it within the first few. Today, there are way too many countries in the world today, including the developed ones where there are not many choices. In terms of understanding some key elements for property bubble, take a look here: Spotting signs of a property bubble, 3 points (updated)
Speaking about the Malaysian property market, I just read a very interesting article by James Chow of propchat.org Using available numbers, he showed property prices in Malaysia in comparison to the average salaries of a working person in Malaysia. I think he did a lot more research and included many other more prominent property markets of the world today. His analysis showed that Malaysia is still considered fine when compared to many other countries. One interesting fact that he showed is that Perth seems to be the best place to earn money and own a property! Yes, I have been to Perth and like it too but Malaysia will always be where I will be. You can refer to his full article here: Malaysia Property Prices continue to increase
The answer is a clear YES if we are asking if the property prices would continue to rise. Assuming Malaysia is many years behind any developed country, we can already see the property price possibility. Read here: Hard for property prices to go down lah… The answer is NO if we are asking if since prices would keep rising, can I simply buy some property. In a discussion with another fellow investor a few days ago, I told her that there isn such thing as a perfect property decision. She was asking if she should wait for a better price for her condo before selling. She wanted to upgrade to a landed property. Well, what if the landed property price rises faster than her condo?
Moody’s has announced just days ago that the rating outlook for Malaysia is now at stable instead of positive. Does this mean that property prices are about to drop? Quickly identify some properties we want to buy. Keep tracking it and if the property prices should drop, quickly buy one. Think longer and it would soon exceed its prices today. Saving is not going to be faster. Imagine trying to save RM10,000 per year. It’s near impossible for majority of the working class Malaysians. Yet, a RM400,000 property, rising just 2.5% per year is already RM10,000 up every year! Remember to read the informative article by James Chow of propchat.org Happy learning and remember, property prices will continue rising even if there are always hiccups along the way.
written on 13 Jan 2016
Next suggested article: Please tellme honestly, who wants property prices to fall?