The government is worried, the property price has risen sharply. In the 4 th quarter of 2011, the price of the properties in Klang Valley the price had jumped almost 7%.
The followings are the steps taken to prevent the Malaysian Property Bubble from bursting.
a. Financial Control to make loans more difficult. The logic is straight forward, by the simple economic demand and supply, the reduction of financial resources will reduce the demands and automatically the price should drop.
However that simple logic does not seem to work. There are other factors in the equation. The demands for the properties is made up of the foreign buyers. A quick survey shows that the the majority of the buyers are from Singapore, China, Korea and Japan. Thanks to the Mahathirs effort to make Malaysia the second home. To overcome the problem, there is talk that the minimum price for foreign purchases to be above rm1million.
The property transactions in 2011 is given below:
-rm50k and below - 16.7%
- rm51- 100k - 20.5%
- rm101k - 200k - 30%
- rm 201k - 500k - 25%
- rm501 - 1 mil - 6%
- rm1 mil above - 2.4%
The Malaysian Property Bubble had burst before, and it can be in future. The happenings in USA had shown it can always happen.
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