Yes, there is a bubble. No, there is no bubble.

I love to type ‘property bubble’ into Google under ‘News’ to look at some of the latest articles about property bubble. There are many that we can look at since a property bubble starting in another country can affect sentiment and subsequently the Malaysian property market as well. Recently, there’s one saying that the property bubble is about to burst. Global property bubble about to pop? Pop means kaboom. It gave an overview of the few advanced property markets and even China’s potential property crisis because prices are still rising. The article by Motley Fool did not talk about the Australian property market. There’s one recent article on that in news.com.au In brief, the article quoted Professor Steve Keen who said that Australia could face a housing market ‘bubble’ within months. He quoted the numbers from OECD which shows that Australia already has the fourth highest ratio of household debt as a percentage of net disposable income in the world at 212 per cent. Well, do read the article in full as it includes charts as well.
When we type ‘Malaysia property bubble’ the first article that appears is one in NST quoting iProperty General Manager Data Services, P.Premendran. He said that Malaysia is not expected to face a property bubble within the next 5 years. The reason is because Malaysia has prepared well by looking at the 1997-1998 economic turmoil and from the US sub-prime mortgage crisis in 2008. He added, “Malaysia would not be heading into a property bubble as the next five years look promising.” Beyond this article, the rest are a few old articles. Why are there no other articles? There are two possibilities here. First one is that there is no bubble possibility for Malaysia because there are no such specific article about the possibility. Alternatively, it may also be due to the fact that our property market is nowhere near those of China, Australia, London or even Singapore’s. Thus, there are far fewer articles on our property market. Okay, now we can heave a sign of relief? 🙂
There are many other articles about the possibilities of property bubbles in many other countries. However, I think for those countries that was mentioned, its effects on Malaysia is lesser. For example, Ireland or New Zealand or even Canada? There’s one much closer to home; Thailand. The article in Bangkokpost.com Suparchai sees property bubble ahead quoted Suparchai Panitchpakdi, a former director-general of the World Trade Organization and secretary-general of the UN Conference on Trade and Development as saying that Thailand faces a potential bubble. He said, “Investment has poured into the real estate sector mostly,” he said. “This is quite abnormal. One cannot deny the beginnings of a bubble in the real estate sector as many more projects have been launched.” I think in terms of the Thai property market, it can be considered a ‘competitor’ to the Malaysian property market. Thus, we may not need to be too worried about a property bubble in Thailand, at least not directly anyway. Okay, enough of bubble vs no bubble for today. Happy following.
written on 21 May 2017
Next suggested article: Australia property bubble? 27 experts said, it’s ok. 1 said, It will burst.’