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House Market Summary Report

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Submitted By conf3ss
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Investing in house market is very popular move among working adults in Malaysia. Why is that? The reason is due to how fast the house prices in Malaysia have increased, and is has not stopped until today. Appendix A shows price movement of terrace houses in KL areas like OUG, Taman Desa, Bangsar, TTDI, and Damansara Heights. Appendix B shows the annual house price changes in states. Many young adults today are deemed to be “successful” by their peers when they can afford to buy house because of how strong the house market is in terms of investment. However, many potential investors fear the housing market bubble has formed and will burst. What is a property bubble? According to Fowles (n.d.), it refers to a situation where house prices climbs rapidly instead of rising gradually with rise in average income or inflation rate. When it does burst, house prices will take a hit and a recession often comes together. House prices will depreciate because people can no longer afford to buy a house and property owners would take desperate measures like cutting the house price to sell it fast to save their investment loss as they may not afford to pay back the housing loan. So is property bubble forming in Malaysia? According to The Star (2013), Standard & Poor's Ratings Services (a well-known American financial firm) denied that a bubble is forming in Malaysia as few factors supports borrower repayment ability which is: resilient economy, low unemployment and low interest rate in Malaysia. Founder and Developer of Sunway Group, Tan Sri Dr. Jeffrey Cheah stated that property bubble is not forming but rather just a market perception (The Star, 2013).
There are several factors that cause the house price to appreciate in Malaysia nowadays. Firstly, labor force. The house price depends on the amount of the labor force; if the amount of the labor force that involve in the

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