This Week In Property: Trapped In The Middle

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We have received, well, some heated emails in response to my last week’s thrashing of some “indicators” (notably the Housing Affordability Index) which did not seem to reflect the grim reality of the situation. Here’s one which we received just this morning:-


We agree with some of the points that Tony has pointed out (that the Affordability Index is a good indicator of trend and should never be read in isolation as the sole data point), but we take offense with how the measure is used to justify the contention that “more Malaysians are able to afford to buy homes” because that’s simply untrue. There are better indicators to look at which will give a better representation of the reality.

Folks, Malaysia is now officially in the middle income trap. According to NAPIC and the World Bank, prices of houses in Malaysia increased by some 29% in the 2000-2007 period in aggregate, while at the same time, real wages (defined by wages which are adjusted for inflation) increased only by a pitiful 1.7% from 1998 to 2007. And disturbingly, this is not a regional phenomenon. Singapore and Thailand, for example, has got significantly smaller gap between the increase of housing prices vs wages.

We at are not armchair economists, nor we claim to have answers to the housing woes which seem to be getting worse by the day. Looking at the current waves of launches it’s undeniable that the bulk of new projects are targeted at the lucrative big-ticket / big-margins sector – just see below. This mismatch between supply and demand will need to be addressed – NOT by the government, but by market fundamentals.

Now with that out of the way…

New Projects & Launches. Mah Sing has been hogging the limelight for the past week with its high profile Ferringhi Residence’s Precinct 1D launch over last weekend. These are low-rise, semi-detached condo villas with build-up areas from 1,510 to 1,752 sq ft priced between RM1.3 to 1.9 million.

mahsngFerringhi Residence has one of the best spots on Batu Feringghi with superb access to the tourist “belt” and, well, a good view of the sea. It’s a short distance from the Holiday Inn and Lone Pine Hotel ( editors’ favorite!); an international school is just across the street to tempt expat families. The landscaping themes are also funkily named – “Scent Train”, “Flying Carpet”, “Eco Street”. 🙂

ecoworldEco World’s launch of its sales gallery was well received with its EcoSky project on Jalan Ipoh receiving bulk of the limelight. There was a media blitz later throughout the week – you would have no doubt seen the ads getting plastered all over the local dailies and business weeklies like The Edge by now. Is Eco World merely SP Setia-lite? Only time will tell what’s on big brother Liew Kee Sin’s mind 🙂

A little further away from home is IJM Land’s launch of Royal Mint Gardens in London – a 2.7 acre integrated development project adjacent to London’s financial district. It could be argued that SP Setia’s Battersea home run opened the floodgates to London real estate with more Malaysia developers building up substantial land bank in the city. But God knows why Felda would buy a hotel right smack in the middle of the city for half a billion Ringgit (yes, that’s RM500,000,000 – count the zeros)?

Events. iProperty is having another round of its Expo shows over the weekend – this time at City Square in Johor Bharu down south. Expect the usual fare of developer booths, guru talks and freebies. Next month iProperty will be organizing a tour on Iskandar properties in collaboration with IRDA (Iskandar Regional Development Authority) – should be interesting to attend; more details in today’s copy of NST’s RED supplement.

Interested in the Penang secondary property market? First, read our Penang property guide, and then head up north this weekend to the Times Square Mall in Penang for the Maspex (Malaysia Secondary Property Market Expo) show. Organized by MIEA, there will be shows by agents showcasing listings in Penang as well as by those providing financial and legal advisory services.

The I&P Group will launch a bunch of 2-storey homes (“Tari”) in Alam Impian, Shah Alam on Saturday from 10am onwards. These have build ups of 2,454 sq ft and up. No information about the price – call 03-51627600 for more information. The sales gallery’s Google map is here.

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About Khai Yin

When I am not writing for and helping my readers find properties though the DealMatcher service, I spend time doting on my three kids: Wenyi, Qinyi and Eian. My personal stuff, some published essays and contact details can be found at


  1. I think currency plays the role. Our wages vs house price gap is due to our weaker currency and therefore causing inflation higher and value of our wages lower.
    I don’t know about Thailand but I think Singaporean has become richer due to their stronger currency in the past years. Recently, the subsidy cut has strengthen our currency. I think reduce subsidy and impose GST will bring benefit to everyone.

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