Property market evolution has surpassed many expectations. Speculations are heating up so much so that prices of the properties esp housings in da state have becoming increasingly 'out of control'. Back in da 90's, prices of a standard double-storey terrace house cost between RM150K-RM250K.
Financial Recession 1998:
During the 1997-1998 financial crissis, the real estate market in da states struggled big time when BLR (basic lending rate) recorded highest in history of up to 12.27% . Many sectors and industries fallen to da ground and housing market as well as developments came to a stand still for couple of months. During da same period, our former PM Tun Mahathir administration has taken drastic measures including pegging the Ringgit to cushion da country's volatility against foreign currency attack and prevented deeper recession in our economy. However, the trend took a spin and since the year 2000, the property market has started to bubble. At this point, developers and property players began to 'fry' da market and speculations escalated inevitably. A double storey unit terrace which was cost RM150K 5 years in da past went up more than 30% to RM200K and above.
What I observed during this moment, da demand of our country's comodities such as palm oil has boosted da economy of da Sabah state. Planters who used to seek more land for expansions had shifted their profit sight on property market. Unlike majority players in da peninsular, wealthy planters who doubled their fortune within few years managed to sustained their stakes at longer period of time. After da crisis, da states tourism industry boomed tremendously. Sabah becoming increasingly popular among Asian tourists and property investors. Judging by da fact by its political and social stability, Sabah ranked among da top 5 in terms of most expansive housing and residential markets.
Great Recession 2008:
In 2003 Oct 31, Tun Mahathir stepped down as da country's premier and handed over to Tun Abdullah to continue his legacy whereby this country continue to enjoyed a significant growth with an average annual GDP of 5.5%. Da year 2008 was very much unfortunate for us as d economic powerhouses such USA and many European countries slumped into great recessions prior to their own 'unethical' financial practices since decades (click here for more info). All the financial and economic perspective, projections and statistics went downwards. Malaysia's annual GDP growth rate in da year 2008 and 2009 was 4.6% and -1.7% respectively.
During this period I remember when da crude oil price shot up to $108 per barrel, our government was unable to subsidiced petrol fuel and eventually raising da price gradually. As da result, many industries especially retail business were badly affected - consumer prices increased when production costs, materials costs, bla bla costs etc jumped sky rocketing, forcing da economy to sluggished and businesses shutting down. Surprisingly, all these factors didn't implicate much on da property market in da state of Sabah but rather a slight impact. By end of 2009, the cost of a 1600sqf DST/I in da states has doubled to RM300K-RM400K, 50% up within 10 years period.
Recently, da Central Bank has planning to cap 80% on housing loans but then called it off as many voices protested againts it. The initial objective for da 'study' was to avert the risk of a potential property bubble. However, looking into da current situation, I doubt that da measure wouldn't slow down da pace of housing development sectors any time soon.
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