Rising cost of materials

US dollar heading downwards, to certain extend I believe it is on purpose by the Federal Reserve and their governmental policies due to the strong challenge of China and Asian booming economies that cause continuous trade deficit in US. When dollar is heading down, all commodities trade with the benchmark using US dollar has been rising steadily. Example: Crude oil, steel, gold, iron and even food.

Couple with the intensifying demand from high growth countries like China, India, Indonesia and potentially African countries in the coming years. This is no more inflation, but is rather as asset revaluation stage. Most government has measured their CPI (Consumer Price Index) with core components that always excluded many necessity components that is vague in telling the clues related to actual inflation.

Globalization Effect

It is not just limiting to business or MNC (Multi National Corporation). It is by far even to tell all that the world is gradually becomes one. No matter where you stay and what country are you living in. Everyone can move from country to country due to business, education, cultural exchanges, sports and more.

The economics' factors that drive prices sky high in Singapore, Thailand, Indonesia, Hong Kong, Shanghai, Korea, Japan, Australia and Europe. There will not be any cheap property anymore in any corners of the world depending on the urbanization rate of those cities. It is a matter of time but given those fundamentals in Malaysia economy, it will be also a pressure to boost the property price locally. We should not compare within ourselves between the current price and the historical prices. We have to look globally and compare with our peers.

Even today, if you compare to US property market that has been impacted by the sub-prime loan crisis. I believe apple to apple comparison between a bungalow in New York and in Kuala Lumpur, it has still a far difference between two. Well of course, some may argue that because of our GDP income is lower. But if you believe this figure will revise up in the coming year, It gives strong support that property prices in Malaysia will rise further.

Population growth and its age group

Population is also the demand factor in the property market. Local population is the citizens of Malaysia and the foreign population is those who come in with 2nd Home campaign or as expatriate that temporally working in Malaysia.

It will not be a surprise why there are many hospitals establishing in everywhere of the country no matter they are government funded or private funded. This is due to the age group of Malaysia that almost 65% above of the whole nation population is at 35 years old and below. From 35 years old to 45 years old probably got another 10% are getting more buying power to invest in their 2nd or 3rd property. It means there will be a lot of buyers are flooding into the market in the next 5 to 10 years. Need not to count the foreigner investors and pensioners that always view Malaysia as one of the most cost effective country in the world.