I'm living in Malaysia, around Klang Valley. One thing I notice is that the housing price keeps on increasing and increasing and increasing ( just my perception, no data to backup my point), with no sign of abating even during the tumultuous years of 2007 global economic crisis. I'm hoping for the music to end and the bubble to burst, so that I can get a house at a bargained price.
But the argument I heard is that house price will always increase-- due to the price increase in raw materials-- despite that generally the economic is not very good. Again the "economic not good" is just my-- and your average Joe on the street's-- perception. The "official" data shows that our GDP growth has been tremendous. The only thing is that the "growth", even if it's real, doesn't trickle down to average folks.
During launching period, people will line up in front of the developers' office, and units are sold in mere hours, regardless of how exorbitant or how unreasonable I think the price is. Of course a lot of government incentives were/are thrown in to encourage house ownership, such as low interest rate and NO selling tax. But the fact that middle class is struggling to meet a day's end and at the same time the house price is being pushed up all the time baffles me.
So, my question is, is the real estate market overheating? Or do you think that the estate price will still increase?
Edit: There is no question about the speculative nature of the current atmosphere-- it is really there. To give just one example, Setia Alam and Klang are separated by just a fence, and yet, the house price at Setia Alam is many times higher than that at Klang and the increase is showing no sign of abating as more development projects are announced. The only explanation I can offer is people are buying up the unfinished properties so that they can sell them later at a higher price when the houses are completed ( between launching period and finish construction no payment is required). I would have thought that the music is going to stop anytime, but it has been going on for a long time and I was proven wrong on so many occasions that I wouldn't want to bet against the general trend now.