Malaysia Property Set to Boom Again in 2012

In recent years, the property in Malaysia is getting huge attention from many investors. According to the national House Price Index, the property prices rose steadily from 97.9 – 150.7 in the past 10 years. And, a residential property would have risen in value from RM135,293 in 2000 to RM208,725 in 2011, up 54%.

house price index

From the chart above, we can see that there’s a rapid growth of house prices over the years.

For me, property investment had become a viable asset class in Malaysia. And, it had appreciated to outstrip income growth already. In the other words, the housing price had grown at a faster pace than household income.

So, rising house prices bring about extra new wealth to households. When house prices continue to rise, there’s a positive wealth. Such new wealth will allow additional borrowing by households for new expenditure on investment and consumption.

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