Will Malaysia’s property bubble lead to economic recession?
Real estate doom & gloom is no laughing matter. The prospect of a property bubble is fast shifting from being a mere hypothesis to becoming a real-life scenario. In the present-day circumstance, the Malaysian property market is fortunately still buoyant, fuelled by a booming residential sector and a robust building industry. However, there is a real possibility of this imaginary property bubble bursting, leading to an impending market crash in the foreseeable future. The federal government needs to be wary of the danger signs of a potential property bubble by placing the necessary checks & balances throughout the property industry.
Will the local housing glut result in an impending property bubble in Malaysia? / Pix: FMT
The high-end property segment is particularly susceptible, fuelled by skyrocketing growth in development as well as obscene profiteering by investors. Rising demands in luxury properties are often exploited for quick gains by unscrupulous developers. There is a growing need to revamp & restructure the entire estate industry to enable fairer competition on equal or level playing fields in all aspects of the game. It is truly imperative to have the appropriate credit support from relevant financial institutions in weathering any storm or crisis.
Market-oriented solutions are crucial in driving the economy forward amid uncertainties in the real estate marketplace. Affordable housing continues to remain a top-priority agenda with flexibility and leeway offered to private initiatives to further boost & bolster the markets. Government intervention is equally critical in ensuring the property market conforms to industry standards and consumer expectations. Improving financial literacy or acumen via upskilling citizens through financial re-education programmes is also vital.