Malaysia: House price and affordability in Housing

This document is based on residential property market in Malaysia, which has experienced significant price expansion over the past fifteen years with prices, at several states, expanded at higher rates. As economic theory has explained, house price movements is inherent with the regional economics and regional demographics such as income, cost of capital, stock prices and population change. However, sudden price change could affect home ownership to some extent. Under any circumstances, the need for housing as a basic necessity persist. This article intend to analyze house price movements with regard to affordability and availability and to some extent the possibility of wealth creation of house ownership and its influence on consumption. Discussion will also be made on the effect of the recent Budget 2008 on home ownerships. The article will address issues pertaining to affordability level among the sampled states, availability of housing for the lower income earners and wealth created through home ownership.