HOT TOPIC Results in Figure 1 uncovers 2 past episodes of the housing bubble in the domestic market for the period 1990 – 1993 and 1994 – 1998 . Housing prices were on the uptrend between 1998 and 2000 and thence hovered within short range until 2009 when price growth accelerated again , reaching another new high in 2013 when we observe the turnaround in price movement . Between 2009 and 2013 , housing price expansion points to a bubblemaking period . The ensuing years from 2013 saw the downturn in economic conditions both within and outside the country which negatively impacted the housing market .
With careful observation , the interaction of the various market forces and factors as described in the first part of this article has brought about the reversal in direction of the housing price movement , while also providing a buffer that allows gentler price drop . The graph in Figure 1 suggests that the housing market has already entered the downward slope of the current cycle and up to now looks relatively stable , reflecting the supporting efforts of the government and housing suppliers .
Based on research carried out , now is the time to consider buying . However , there is still a possibility this trend is just an intermediate short cycle or the downward momentum of prices could increase further in favour of buyers .
The next step is to look for vital signs in the market that favour buying activities . It is believed that monitoring and logical analysis of certain economic and market events could impact the housing market .
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Figure 1 - Year-on-year change in percent of house price index
90 92 94 95 98 00 02 04 06 08 10 12 14 Year
Figure 2 - Extreme buying and selling behavior
House Price Index
2009-2016 [ Price Cycle ]
88 90 92 94 96 98 00 02 04 06 08 10 12 14
Tracing out the degree of extreme buying and selling behavior Extreme behavior for any part of the blue line above their horizontal red line
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150 120 80 40
Suggestions for interested home buyers ...
1Property price cycle crossed the peak at 2013 and is on a gradual downslide . This
# phenomenon is a vital sign for us to enter the housing market . The question is : when shall we enter the market ?
It is known that when the cycle is on the downside , house prices generally will be lower than the normal levels . Statistical testing results in Figure 2 show that for the period 2009-2016 the housing market is theoretically in a bubble . However , practically , it is a price cycle which has peaked , so there is less likelihood that house prices will go up further unless there is visual sign that it is on the way to follow a “ U-turn ”, however gradual it might be .
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