Financial news: Property prices after taking out inflation. Which countries are up, which are actually down?
As usual, I found another very good set of charts from visualcapitalist.com (please click to go view the whole article yeah. Else, refer below for some of them plus explanations too)
Malaysia is not within the top 10 of rising property prices
Everytime I hear people say property is just too expensive, I am not sure how to say how pitiful some people in these countries where the property prices are rising much higher then inflation are feeling. Then again, it’s comparative because people would then say but the ringgit is down so much. When pointed out that ringgit has not moved much against most currencies and in fact is better than some advanced country currencies, they would tell me they don’t believe there’s such a thing. Whatever lah.
Keep thinking and taking action based on what you believe yeah. One example? People kept laughing at my decision only to buy high rise units and kept reminding me that landed is the one which will shoot up like a shooting star. Noted. Haha. Coming back to the actual states.
The REAL TOP 10 countries with increasing housing prices (2010 – 2022)
Nominal means it is just gross price increase without taking out the effects from inflation. Real price growth meant the property price rise AFTER deducting the inflation numbers from it. Yes, no need to tell me. It’s SUPER BIG increase. There’s also no need to wonder about the salary increment in these countries. There’s no way all of them receive more than double their salaries within 12 years yeah.
The REAL BOTTOM 10 countries with increasing housing prices (2010 – 2022)
Singapore and China are two countries where the government has taken very pro-active steps to reign down the speculation. Thus, the real price growth is really lower than even the inflation rate! If you ask me, I think it’s perfectly fine. If I have just 2% growth in price every year and this follows inflation, this is how much a RM500,000 property would become after 12 years.
RM500,000 property with 2% increase every year for 12 years = RM634,121. In other words, increasing by an average of RM11,177 per year. If I had paid 10% for this property and it increases by RM11,177 per year, then my gross return is RM11,177 divided by RM50,000 and that’s a return of 22.3%. This is continuous for 12 years yeah… Hope you know why kopiandproperty.com has a lot of readers yeah. 😛
Where is Malaysia then for the property price increase?
Out of the 45 countries in the list, Malaysia is ranked 17th. If we do not take out the inflation, then the property price has risen by around 8.5% on average every year. Taking out inflation means an increase of around 4.9% every year on average. As usual, please remember that Return on Investment is based on how much we invested and NOT the house price yeah.
In other words, RM500,000 home and 10% downpayment means an investment of RM50,000
Meanwhile, the property price increased by 4.9% per year and that’s RM50,000 x 4.9% = RM24,500 per year.
Simple calculation of RM24,500 divided by RM50,000 means a return of 49%! Over 12 years on average.
Please take with a huge pinch of salt because all these are average numbers. There’s no such thing as everyone having a similar number. Perhaps some may even tell us about their losses!
Happy deciding and if your property has risen by something similar to the average numbers above, congratulations!
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