Will Malaysia Property Price Continues to Increase?

A famous Chinese proverb says “A book holds a house of gold”, which means knowledge is very important for financial gain. When property price was ridiculously cheap about 10 years ago, many people missed the boat because of lack of property investment knowledge.

In past 10 years, Malaysia property market gradually entered the price escalation stage due to globalization, DIBS and lenient government policy. Then it reached to an alarming point for government to implement the cooling measure in Budget 2014.

About 8 years ago, a 24×70 landed house in Subang area only cost about RM300,000. Today, the price of the same and aged landed house cost more than RM1 million! That is a whooping RM700,000 in profit if you bought the house in cash back then. Most people were lucky to have bought the house many years ago for own stay purpose, but there were a group of smart property investors who actually bought the house because of their knowledge and wisdom.

The rest is history.

However, many property experts emphasize that Malaysia property price is still considerably cheap compare to other neighboring countries/cities and opportunities still exist, and to some extent they are correct. But I don’t simply trust whatever the experts say and I wanted to do my own research to see how true the claim is.

I collected some information including estimated price per square feet and average income in different cities. I’ve tried my best to estimate a slightly above average condominium price and the average salary of an executive in different major cities.

The propchat index is invented by me, the smaller the amount means more affordable the house is for local people.Kuala Lumpur is actually not too bad with score of 10. It’s tough for an average wage earner to live in Shanghai, Hong Kong, Jakarta and Taipei. Perhaps we should migrate to Perth?





My own conclusion after looking at this simple research is:  House price depends highly on the average monthly salary of the city, although China is a rare exception due to unknown reason. If our average monthly salary will continue to rise (i.e. until RM8,000) as promised by our government to realize the “High Income Society” dream, then house price in Malaysia or Klang Valley will surely continue to increase.

By James Chow

All estimation is only for general reference purpose. Propchat accepts no liability for the content of this article, or for the consequences of any actions taken on the basis of the information provided.

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