tag:blogger.com,1999:blog-6297413898275266606.post3018662433670216996..comments2024-03-27T18:15:59.096+08:00Comments on Economics Malaysia: The Trouble With Bubbles (Warning: Wonkish Post)hishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.comBlogger15125tag:blogger.com,1999:blog-6297413898275266606.post-20202669828535025362013-11-15T18:33:04.294+08:002013-11-15T18:33:04.294+08:00TLDRTLDRAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-58051665657469921212013-11-15T09:21:59.742+08:002013-11-15T09:21:59.742+08:00Philip,
Wish I could, but there is no publicly av...Philip,<br /><br />Wish I could, but there is no publicly available time series on house rental rates in Malaysia. I've thought about using the rental series used to tabulate the CPI, but this data is mixed up with utilities prices (sub-index numbers are not published), and is not available as a time series either (only single index numbers are published).<br /><br />A household income hishamhhttps://www.blogger.com/profile/06265308095732759923noreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-56320007402542536622013-11-14T18:08:36.457+08:002013-11-14T18:08:36.457+08:00Compare it against rents as Dean Baker did in orde...Compare it against rents as Dean Baker did in order to predict the US bubble...<br /><br />http://www.cepr.net/index.php/publications/reports/the-run-up-in-home-prices-is-it-real-or-is-it-another-bubble<br /><br />There are ways of forecasting bubbles. But I think that you need to take a different tack than what you do above. Emulate those who succeeded in the past. It's a good policy.<br />Philip Pilkingtonhttp://fixingtheeconomists.wordpress.com/noreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-49375595769431136112013-11-06T11:44:05.115+08:002013-11-06T11:44:05.115+08:00@anon 9.49
From the data, both Johor and Penang s...@anon 9.49<br /><br />From the data, both Johor and Penang saw significant increases in labour inflows in 2010 (7.7% and 7.4%), so some element of the demand side is certainly there as well, even if neither saw as dramatic increase as Selangor did (21.2%).<br /><br />Also, house prices in Johore were seriously depressed after 1997-98, so there is some element of catch-up here. Penang on the otherhishamhhttps://www.blogger.com/profile/06265308095732759923noreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-39119661649196104152013-11-05T21:49:03.225+08:002013-11-05T21:49:03.225+08:00Starting from the base assumptions that real estat...Starting from the base assumptions that real estate is local, that neither Penang nor Johor Bahru have had significant population expansions (unlike KV), would you say that Penang and Johor Bahru are likely to be in a bubble, and that their bubbles are substantially frothier than KV?<br /><br />I think that it has been very widely reported that rental yields on property in Penang is so low that Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-42503976973434819522013-11-04T10:10:24.907+08:002013-11-04T10:10:24.907+08:00Shihong,
Agreed, though I don't think it'...Shihong,<br /><br />Agreed, though I don't think it's necessarily all due to poor planning (though I'll echo the thought about apts/condos). It's really hard/impossible to plan for something like the big jump.in population like Selangor has seen (see the chart in the blog post). That's a 25% increase in the working population in just two years.<br />hishamhhttps://www.blogger.com/profile/06265308095732759923noreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-69356701540788964262013-11-02T14:34:43.753+08:002013-11-02T14:34:43.753+08:00Hishamh,
Thanks for prompt and insightful reply! ...Hishamh,<br /><br />Thanks for prompt and insightful reply! The reason I brought up household debt is based on anecdotal evidence. I have come across more and more couples who recently signed joint loans to purchase houses. These are 25-35 year-olds who earn quite a decent living but not enough to purchase a home individually. Obviously I don't have the data on this particular group, but I Shihonghttps://www.blogger.com/profile/02264003213143587074noreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-44354554095122988762013-11-01T21:58:40.198+08:002013-11-01T21:58:40.198+08:00Thanks Steve.Thanks Steve.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-40068225572504635422013-11-01T19:45:27.608+08:002013-11-01T19:45:27.608+08:00We are living in a quasi bubble, dude although the...We are living in a quasi bubble, dude although the model results might be foggy, given the contrasting signals generated. In my 46 years of existence, I have seen the selfsame tell tale signs twice once preceding 1996, the other now. It also explains your personal flummox over why income inequality increased between the Bumis and the Chingkies since circa 2009. But I don’t want to get into some Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-48852911514965883642013-11-01T19:38:41.980+08:002013-11-01T19:38:41.980+08:00This research is great and insightful. Many thanks...This research is great and insightful. Many thanks.Unknownhttps://www.blogger.com/profile/17764198301255897379noreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-64661020823000108042013-11-01T18:18:51.526+08:002013-11-01T18:18:51.526+08:00Hisham, nice post! Thank you.
Zuo De,
The non-ban...Hisham, nice post! Thank you.<br /><br />Zuo De,<br />The non-banking sector doesn't mean loan shark, there are companies which are allowed to undertake financing activities without a banking license, i.e. NBFI like MBSB/RCE Capital, credit providers like Courts Mammoth/Aeon Credit or cooperatives like Angkasa for civil servants.Stevehttps://www.blogger.com/profile/02609818928796297418noreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-91326585471959195262013-11-01T16:44:58.907+08:002013-11-01T16:44:58.907+08:00Hishamh,
Could you please elaborate a bit on the ...Hishamh,<br /><br />Could you please elaborate a bit on the non-banking sector that households are borrowing from (Loan shark?)<br /><br />Zuo DeAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-7122808176833362152013-11-01T16:10:09.855+08:002013-11-01T16:10:09.855+08:00The word Sustainability have most often been negle...The word Sustainability have most often been neglected by both the authorities and private sector alike. More like Kiasu is the way things get done. The maths and sciences of sustainable development only emerges after a crash. The public based their perception on a bubble when prices goes far beyond their means...Joe Blacknoreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-11105195189573321702013-11-01T16:09:45.672+08:002013-11-01T16:09:45.672+08:00@Shihong
One of the peculiarities of Malaysia'...@Shihong<br /><br />One of the peculiarities of Malaysia's household debt is that its sharply divided between lower income (high gearing but low exposure) and higher income (low gearing but high exposure) households. The risk is all at the lower end, but these aren't really the ones involved in the property market. As everyone points out, they can't afford it. So the risk of financialhishamhhttps://www.blogger.com/profile/06265308095732759923noreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-54181179043296097332013-11-01T15:43:18.769+08:002013-11-01T15:43:18.769+08:00Hishamh,
Very illustrative data indeed. I think t...Hishamh,<br /><br />Very illustrative data indeed. I think this is great introductory work for those who wish to pursue this research further. Though, I think looking at mortgage lending alone may not be painting complete picture of a bubble. I understand that you were making a point about a credit-driven bubble. <br /><br />But I think that intuitively, including total household debt is a betterShihonghttps://www.blogger.com/profile/02264003213143587074noreply@blogger.com