Household debt vs Property price

Household debt vs Property price

Property has been the hot topic for most people in year 2010 till now..... lot of agents said now is the best time to sell (if you have one, other than your own home).

Found some key points from Dr. Dzul's blog, a post dated 25 November 2010,

• It is worth noting that our household debt to GDP ratio shot up to 76% between 2004 and 2009 and is the highest in Asia, except for Japan. But as a reminder, Japan’s per capital income of US$32,700 or about RM8000 per month in 2009, while Malaysia’s average income per capital is less than RM2000 per month.
• According to a note by CIMB Research, the ratio of household debt to personal disposal income hit 140.4 % in 2009- higher than Singapore 105.3% and the US 123.3%. This means Malaysians owe double the amount they earn. 
• unsold properties in Malaysia rose to 22.6 per cent of new launches in the second quarter of this year, from 19.5 per cent in the fourth quarter of last year. For Kuala Lumpur, unsold properties rose to 16.1 per cent from 15.8 per cent, while for Selangor it rose to 14.6 per cent from 12.4 per cent.
• Checks on developments completed this year also show that vacancy rates remain at 50 per cent or higher.
• Property Overhang as reported by Napic (National Property Informational Centre) for the third quarter of last year was supposedly a cause for alarm. Then there was an overhang of 20,286 residential, 5,450 shop and 619 industrial units worth a whopping RM5.3 billion.
• Credit Counselling and Debt Management Agency (AKPK) reported a total of 50,361 cases enrolled in debt management program with 10.6% of them who could not pay their credit card debt while 74.3% had repayment problem with housing loans, car loans and credit cards outstanding.
• AKPK’s CEO Mohamed Akwal Sultan said some 44% of the individuals who join the programme belong to the 30 to 40 age group.
• High car prices, due to protectionist policy of the government doesn’t help while most are already in debt as soon as after graduation because of loan repayment for their studies ie the PTPTN. The problems worsen when they hit their 30s and beyond.

Can property price be sustained when national household debt soar "further"?  Christmas has just over but "you better watchout.... you better not cry, you better not pale.... I'm telling you why......bubble is coming to town"