No property bubble in Malaysia
SHAH ALAM: The Housing and Local Government Ministry does not foresee a property “bubble” in the country, where a rise in prices will be followed by a rapid reduction.
Minister Datuk Chor Chee Heung said that so far this year, property prices had increased by 37%, unlike Singapore and Hong Kong where the figure had already exceeded by 35% last year.
He said the increase in property prices since 2008 was due to the high cost of land, building material and entry of foreign companies into the sector.
“We still have a long way to go before reaching a property bubble,” he told reporters after the launch of Setia City here yesterday.
Chor said local property prices were still much lower and “nowhere near” those in Jakarta, Hong Kong and Bangkok.
“Last year and this year, the most sought after homes were priced between RM150,000 and RM180,000,” he pointed out.
Chor said the ministry and Bank Negara were monitoring the situation in the industry and if need be, action would be taken to prevent hardship to the people and economy.
He said that even developers had realised that there would be a drop in prices if they continued building properties.
“That is why since late last year, there was a reduction of 19% in the number of houses built nationwide,” he said.