Importing inflation through property prices

The upward pressure on property prices as a result of speculation activities is getting everybody in Malaysia squeezed.

People are rushing to purchase properties for whatever reasons - fear of upward prices, making money from the "investment" (aka speculatory) activities.

Malaysia is a very protective country economically. We try to survive on our own - plant our own rice, build our own car. But following Ricardo's theory that we should do specialization and trade with other countries, we can't move away from increasingly taking part with the rest of the world. In fact, if we don't do that, we are going to suffer.

Now, back to property price. People (esp young like me) wants to purchase house, but some are too greedy and put down deposits at few places with hope to cash in the money when the time comes.

This is a greedy act, and not beneficial to the person. First, you teach yourselves how to gamble in a big way. You're taking loans, hoping that economy picks up and the upward price even more. And when the time comes, you sell. Habit is bad, for the economy is also bad. You don't add values, etc. You simply speculate. The economy is going to suffer from being "inflated" by you.

Second, the economy will bust when the time comes. By that time, all the profit that you selfishly make making the entire place not nice to live. Of course it is advantagous to you because you now have cash to buy even more houses. But what if you own a "portfolio" of houses that you haven't finished paying and you can't cash in now? You're totally screwed because first, the house has no value, and second, because you own ringgit and the value is less, you can't even pay. Bank will confiscate your house. Or you'll be indebted for the rest of your lives, and most likely the debt will be passed on to your children.

So the message here is this - don't purchase house if you can't afford it and don't buy house just for speculative purposes. You might as well be George Soros.