In last article, I mentioned about globalization widening the gap between the rich and the poor. With the pressure from the rich countries and individuals all around the world, property price has shoot up all over emerging and poorer countries. Because the property price has gone up fast in recent years, a lot of youngsters in the age of 20s and 30s in my country, Malaysia, rush and dump most if not all of their life saving, into property, thinking that if they do not buy now, they cannot afford in latter years. Some even get monetary support from their parents. They realized that the rise of their income will not keep pace with the rise of property price.
I am a bit worry about it as this may be another kind of property bubble. I am not able to tell how the problem is, but I think this "scare to fall behind" mentality is not a healthy phenomenal, and do not reflect normal affordability and demand among the youngsters of the poorer and emerging countries.
They are bearing more debt to income compare to previous generation because of that. They do not have much money left after paying off housing installment every month. Naturally, they will spend less, so consumer buying power or domestic demand should be weak.. If they borrow, their debt increase further and creating another debt bubble. Currently, a lot of countries interest rate is at very low level historically. I am not sure, but I am afraid the current global demand is somehow inflated because of that.
The 20s and 30s youngsters are the main pillar of the countries. If the property price does drop, not only their life will become more difficult, their countries also will face big problem. So, to all the youngsters except the rich one, i am not saying that buying property now is a bad idea, but I want to say is please control your financial prudently.
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