Are properties in Malaysia getting too expensive?

It’s hard to debate with those who have totally different ideas about property prices and affordability.

But here’s a reminder – property prices will keep increasing as long as people can afford it.

Based on a previous article, the Key driver for property demand will always be affordability.

If people cannot afford the current prices of property, three things can happen.

The property bubble will burst, and that will make property prices affordable again. Or people will look a little further from the city for cheaper properties. Or developers will build smaller units to control prices.

Between these three situations, one is actually within our control. The world can be unfair to us, but since we cannot change the world, we can only change ourselves.

Refer to the chart below for the median prices for all major towns in Malaysia.

It shows that prices are not spiralling out of control. The site can also be used to verify what people are saying.

For example, a friend says he sold his property for RM500,000 last year. If you know the address of his property, you could check it out and verify if he’s telling the truth.

Among the major towns and cities in Malaysia, the most expensive properties are those in Kuala Lumpur city centre (think KLCC and its surroundings). The median price for property here is RM940 per sq ft and RM1,000,000.

In other words, RM1,000,000 will get you a unit slightly bigger than 1,000 sq ft.

It’s important to have KLCC at the top of the list because this will be the main driver for price growth in areas surrounding it and areas even further away.

Remember, if KLCC is still RM500 per sq ft today, there’s no chance for areas further away to reach RM500 per sq ft.

The last in the list is Ipoh. When it comes to median prices, property in Ipoh is only RM196 per sq ft, and the price is RM204,750. But if you think this is the norm for property prices, it’s not true.

For many established areas, the neighbourhood has matured enough and not many transactions can come from them.

With more homes being built away from the cities, houses become more affordable. Therefore, the transactions are showing this trend.

Source : FreeMalaysiaToday