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Unemployment Malaysia and the effect on property market.

unemployed

Unemployment Malaysia and the effect on property market. Anyway, this has been asked a few times. If people are unemployed, surely it will affect the property market, right? Well, I cannot say totally no but well, if we look at the actual happening, perhaps the below is more likely to happen.

What happens when people do not have a stable job

When people do not have a stable job, they do not have a stable salary. When they do not have a stable salary, they would not be able to buy a property. If they do not have a stable job and they try to apply for a home loan, their application will not be approved.

Hope everyone see one important point. The unemployed are not the ones driving the property transactions in Malaysia. This is why when people say unemployment numbers are up, so property market will suffer very soon, I hope we could be objective enough as well.

This is Malaysia. It’s hard to get home loan approval if we do not qualify (I know, some will say can be done one… I meant MAJORITY)

This is Malaysia yeah. Our Bank Negara Malaysia (BNM) is by far MORE stringent than the central bank in some advanced economy which caused the 2008 mortgage crisis. All our banks are also by far more conservative and only lend if the person actually qualifies for the loan and not take up risky lending like some banks in some advanced economy.

Okay, what’s the actual unemployment number then?

Do refer below chart. As real as it gets and typically, our unemployment is probably around 3.5% on average. It went to as high as 5.3% if I remember correctly. Now it’s 4.4% I think if I remember correctly. I meant as at November 2021.

Source: tradingeconomics.com

What’s the actual property transaction number then?

Latest chart from NAPIC for 1H 2021. Yes, the numbers are still happening yeah.

Unemployment and Property Market are not that related after all

I know, if the media could sensationalize a bit, they can get more views and clicks. Think about it really hard.

“Unemployment will cause the property price to drop.” versus “Unemployment is not likely to affect the property market.”

Which one will get more clicks? Well, the one which makes people get worried yeah. Look at the title of this article. “Unemployment Malaysia and the effect on property market.” Unfortunately for kopiandproperty.com this kind of title will not get a lot of clicks… It’s okay.

Thanks for reading until here and happy viewing properties. Buying one should happen only after 20 viewings and understanding. Cheers.

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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.

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