Household Debt to Household Income
Malaysia - 140%
USA - 123%
Singapore - 105%
Property Loan to Total Loan
Malaysia 2010 - 36% (about 24% in 2000)
Housing Supply in Klang Valley
(residential units in millions)
2004 - 1.22
2005 - 1.33
2006 - 1.42
2007 - 1.52
2008 - 1.61
2009 - 1.64
2010 - 1.70
Supply of Condo in Kuala Lumpur
2004 - 12,000
2005 - 15,000
2006 - 16,000
2007 - 20,000
2008 - 22,000
2009 - 28,000
2010 - 30,000
2011e - 38,000
2012f - 40,000
2013f - 48,000
MyView
Household debt over household income in Malaysia is kind of high comparatively with USA and Singapore. Property loans have also increase significantly over the past decade.
Bubble in property prices normally is caused or driven by loan. Hence, one has to monitor the increase of properties loans and the prices in properties. Some common indicators are new launches crowd, auction prices and properties groups increase in members as well as the common topic in a kopitiam is about properties, not to mentions banks are giving lots of freebies for property loans.
What the governments fails to provide us is the UNSOLD UNITS, which is another indicators of a bubble as well as numbers of AUCTIONS (since of inability of payments).
If one as the questions, when will the property bubble burst? Well, in China, after government efforts lately, Feb 2011, home prices increase in 68 out of 70 cities. It defies government effort to keep housing affordable. And it is alway most common government only act too late and most of the time behind the curve. Hence, the properties, be it in China, Australia or Canada or even Malaysia, they may burst any time, just awaiting the BLACK SWANS.
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