Are Malaysia’s Homes “Seriously Unaffordable?

 

In 2025, the median house price in Kuala Lumpur and Selangor was RM560,000 (US$142,300) and RM470,000 respectively, a 7 per cent and 4.4 per cent increase from the year before, according to official data. This is a spike from the 1.6 per cent and 0.4 per cent increase in 2024. The Malaysian federal government has defined affordable homes as having a maximum price of RM300,000. 

According to official data, Malaysia’s homes have been “seriously unaffordable” since 2014, when the country’s median house price was almost five times its median annual household income. This house price-to-income ratio, or median multiple, is a method recommended by the World Bank and United Nations to gauge housing affordability. Home prices are considered affordable when they are three times or below that of household income.

                                                             Source: https://insights.mudah.my

A decade on in 2024, homes in Malaysia have become slightly more affordable, when the median multiple dropped from 4.9 to 4.2, though this score is still in the “seriously unaffordable” range. Analysts say homes remain unaffordable due to slow income growth, longer loan tenures, and rising costs for developers. These developers in turn price homes higher for larger profit margins. 

Recognising that homes on the open market can be unaffordable for some Malaysians, the federal and state governments have introduced several housing schemes to help the bottom 40 per cent and middle 40 per cent income earners. These schemes have eligibility criteria that include citizenship and household income, and offer homes capped at around RM300,000 with hybrid financing models, including the possibility of rent-to-own. 

The federal government’s schemes include PR1MA, where a government-linked company builds affordable homes across the country either directly or through voluntary joint ventures with private developers. Prices range from RM150,000 to more than RM500,000, depending on location and project.

Residensi Wilayah is another federal government affordable housing scheme that is designed for Malaysians working in the federal territories - Kuala Lumpur, Putrajaya and Labuan. Prices range from RM200,000 to more than RM400,000. The federal government also provides low-cost housing, like this block of flats in Kerinchi, Kuala Lumpur, under its Program Perumahan Rakyat (PPR) scheme. State governments, which have vested power over their land, have their own affordable housing schemes. 

In 2025, homes priced below RM300,000 made up the largest portion (37.7 per cent) of unsold completed units. Homes priced above RM500,001 made up the second-largest portion (34.7 per cent) of unsold completed units, suggesting that more expensive units were not exactly being snapped up either. 

The housing minister has said that he has always advised developers to conduct feasibility studies and reduce building costs through technology like industrialised building systems (IBS). IBS is a construction technique in Malaysia where components are manufactured in a controlled environment either on- or off-site, before being transported and assembled with minimal site work. 

The other is financing cost. Banks do have long-dated tenures but if wages are low, prospects for new buyers to get financing is low. And if wages remain “sticky” upward, then sales are going to be hampered and home purchases by young people will be impacted. The way forward is to be innovative on building new homes, creating connections (rail/roads) to new development areas and providing incentives and support for first time buyers. We are not Singapore or Hong Kong limited by land. Solutions can be found if we work on it seriously enough. 

Reference:

IN FOCUS: Why have Malaysia’s homes remained ‘seriously unaffordable’ for a decade and counting? Aqil Haziq Mahmud, CNA, 11 March 2026

Oil: Prices, Products and the Future

 

From 12 March to 18 March, RON97 and unsubsidised RON95 petrol prices rose by 60 sen per litre, while diesel prices in Peninsular Malaysia rose by 80 sen per litre. Although subsidised RON95 remains capped at RM1.99 per litre, the government's bill for the BUDI95 subsidy will climb. If the ongoing Middle East conflict drags on, the cost could run into billions of ringgit.

 

Image via FMT

 Even though Malaysia exports more oil and gas products than it imports overall, global oil prices can still influence domestic fuel prices because the country is a net importer of refined petroleum products, which are the fuels used in vehicles. Every USD10 per barrel increase in global prices raises the annual fuel subsidy bill by more than RM10 billion, creating substantial fiscal pressure. Higher oil prices boost petroleum-related government revenue, the net effect could be marginally negative, forcing the government to either absorb the cost or adjust retail prices upward. We are better placed than many other nations and we need to be astute in our subsidies to the Rakyat.

Image via Dialog Group (Facebook)

The data from DOSM separates Malaysia's oil and gas trade into three main categories: 

·                  Crude petroleum and condensate

·                  Refined petroleum products

·                  Liquefied natural gas (LNG)

Crude petroleum and condensates are raw hydrocarbons extracted from underground before any processing takes place.

These raw materials are then sent to refineries, where they are turned into finished fuels. Those finished fuels fall under refined petroleum products, which include everyday fuels such as:

·                  RON95 petrol

·                  RON97 petrol

·                  Diesel

Meanwhile, LNG comes from natural gas, which is cooled to extremely low temperatures until it becomes liquid.

Because Malaysia produces high-grade crude oil, countries with refineries that can process light crude efficiently — such as Japan, South Korea, and Australia — are natural buyers. Their refineries can convert Malaysian crude into higher yields of valuable products such as gasoline and jet fuel. Neighbouring countries like Thailand and Singapore are also frequent buyers due to shorter shipping distances and well-established logistics networks, said Yeah. 

So, the impact on our trade balance for petroleum is less pronounced than a country wholly dependent on imports like India, China or Thailand. We are blessed with sweet crude and net effect could even be positive if we produce/extract more fossil fuels to balance-out any imports of crude oil. 

The other option for the Government is to accelerate use of electric vehicles, more solar for residential houses, renewables in the overall generation mix. We need to be intentional even if conditions improve (i.e. crude oil prices drop). To do so, the Government has to draw-up a short-term (6-12 months) plan to reduce use of fossil fuels for transport, industry or homes. We have a longer-term plan to 2050, but that is too far forward to have an impact today. Incentives removed may need to be reintroduced and more aggressive efforts made to wean away from fossil fuel. 

Reference:

Explained: Why does Malaysia import oil & gas despite producing its own? Says.com, 12 March 2026

Economic Implications of Middle-East Crisis

 

The ongoing crisis in the Middle East—specifically the conflict involving Israel, the U.S., and Iran as of March 2026—has triggered a significant global economic shock. The primary "transmission mechanism" is the disruption of energy supplies and maritime trade through the Strait of Hormuz, a chokepoint for roughly 20% of global oil and 21% of liquefied natural gas (LNG). 

Source: https://upload.wikimedia.org

 

1. Energy Markets and Commodity Prices

• Oil Price Surge: Brent crude spiked to over $119 per barrel in mid-March 2026, though it retreated slightly to around $80–$85 following a brief five-day pause in hostilities.
• Gas and Fertilizer: Wholesale natural gas prices in the UK rose by 75% by late March. Fertilizer prices have jumped 35%, raising concerns about future crop yields and food security in regions like South Asia.
• Specialized Gases: Shortages of helium (Qatar produces 30% of global supply) are creating an immediate crisis for semiconductor and electronics manufacturing. 

 

2. Global Inflation and Monetary Policy

• Persistent Inflation: In the UK, inflation forecasts have been raised to 3%–3.5% for mid-2026. Regional inflation in Asia-Pacific is projected to rise to 4.6%.
• Interest Rate Reversal: Central banks that were expected to cut rates (like the Bank of England) are now keeping them steady or considering hikes to combat energy-driven price spirals.
• Cost of Living: Households are facing immediate pressure from higher petrol, diesel, and grocery prices. Some countries, like Pakistan and Sri Lanka, have introduced fuel rationing and shortened work weeks to conserve energy. 

 

3. Trade and Supply Chain Disruptions

• Shipping Bottlenecks: Over 200 oil and LNG vessels were recently reported anchored outside the Strait of Hormuz due to safety risks and soaring war-risk insurance premiums.
• Freight Costs: Shipping carriers are raising freight costs by 15%–20% to offset a 40%–50% increase in fueling (bunker oil) costs.
• Asian Impact: Export-heavy economies like Malaysia and Japan are particularly vulnerable due to their high dependence on Middle Eastern energy imports. 

 

4. Financial Market Volatility

• Safe-Haven Shift: Investors have moved into cash-equivalent instruments at a record pace, with money market fund assets reaching a new high of $7.86 trillion in March 2026.
• Gold and Currency: Gold prices are forecast to reach as high as $5,600–$6,000 per ounce if the conflict persists. Emerging market currencies are under pressure as capital reallocates to U.S. Treasury bonds. 

 

5. Regional Economic Damage (GCC & Middle East)

• Infrastructure Damage: Strikes on energy facilities (e.g., Qatar's Ras Laffan and Iran's South Pars field) may sideline significant export capacity for years.
• Tourism and Investment: Hubs like Dubai face long-term brand damage as safe destinations for global business and tourism. 
• Airlines like Emirates have seen significant drop in passenger traffic because of uncertainties and risk of damage by drones and missiles.

 

6. Opportunities for Malaysia/Singapore

Against the above implications are opportunities for Malaysia and Singapore:

·        Attract fund management and financial services based in Dubai into Kuala Lumpur and Singapore.

·        Incentivise data centres, AI development, chip manufacturing/research hubs to safer havens.

·        Establish mechanisms to absorb “shocks” in the system; and

·        Further develop renewables and EVs with prospects to reduce fossil fuels.

 

PMX must organise short-term and medium-term responses to what’s happening in the Middle East. Has he done that?

Asia’s Ultra-Rich and Dubai!

 

Many of Asia’s richest families are reconsidering their exposure to Dubai as the Iran war rattles the city that has attracted billions from across the region in recent years. Many are seeking to delay relocation plans while others are exploring ways to reduce their investments in an area once considered safe and stable. Those who are already in Dubai are drawing up contingency plans in case the turmoil escalates. 

Dubai’s ascent as a finance and wealth hub faces a test as the US-Israeli war with Iran hits close to home. Fighting has intensified as countries from Saudi Arabia to Bahrain came under renewed attacks. A drone strike caused a fire near the US consulate in Dubai, and thousands of flights to the area have been scrapped, though airlines are trying to resume them. 

Source: https://ms.wikipedia.org

The city’s stunning growth has lured the global rich, along with a clutch of banks and Wall Street money managers. The United Arab Emirates, which includes Abu Dhabi, ranked among the world’s fastest-growing booking centres for financial assets in 2024, according to Boston Consulting Group. The firm estimates that about US$700 billion from overseas investors were booked in the UAE. Dubai alone is home to family offices that control more than US$1.2 trillion. 

Asian wealth has become a significant driver of that expansion. About a quarter of the 2,270-plus foundations set up in the UAE have Asian ownership.

Bottom of Form

Firms from Tokyo-based Nomura Holdings, as well as DBS Group Holdings, and OCBC, Singapore’s two largest lenders, have expanded their operations in Dubai to cater to rising demand from the wealthy. 

Some investors are looking to reduce their exposure in the region as a precaution, though others may see this as a buying opportunity.  Dubai stocks have taken a hit after reopening following a two-day closure. The Dubai Financial Market General Index closed 4.7 per cent lower recently, the sharpest drop since May 2022. The benchmark had more than doubled since the start of 2020, powered by growing consumption, a property rally and expanding financial services. 

While the attacks have challenged the UAE’s reputation as a stable commercial hub, some investors and residents told Bloomberg News they think the country’s strong infrastructure and governance will help it recover and possibly come out stronger. Any extended retreat from Dubai will depend on how long the war lasts. 

The crisis presents an opportunity for Kuala Lumpur or Singapore to step up their game. The safe, secure environment here provides an opportunity for funds and people to relocate. 

Reference:

Asia’s ultra-rich having second thoughts on Dubai as war rages, Bloomberg News, Bloomberg, 9 March 2026

Difference Between Sweet and Sour Crude Oil for Refining

 

Understanding the difference between sweet and sour crude oil is essential for anyone involved in the petroleum refining industry, trading markets, or energy economics. Crude oil is not a uniform product—its quality varies widely based on chemical composition, especially sulfur content. This sulfur level determines whether crude is classified as sweet or sour, and this classification directly affects refining costs, fuel quality, environmental impact, and global pricing. 

Sweet crude oil contains very low sulfur and fewer impurities, making it easier and cheaper to refine into high-quality fuels such as gasoline, diesel, and jet fuel. Sour crude oil, on the other hand, has higher sulfur content and requires additional processing, including desulfurization or hydrodesulfurization, to meet stringent environmental and fuel-quality standards. 

These differences greatly influence sweet vs sour crude for refining, refinery configuration, market demand, and global benchmarks. Because sweet crude requires less complex processing and produces cleaner products, it is typically more expensive in global markets—especially when environmental regulations tighten.

 

Source: https://en.wikipedia.org

 Key differences between sweet and sour crude oil:

Factor	Sweet Crude Oil	Sour Crude Oil
Sulfur Content	Less than 0.5% sulfur	Greater than 0.5% sulfur
Impurities	Low levels of H₂S, metals, nitrogen	High H₂S, metals, organosulfur compounds
Refining difficulty	Easy to refine; minimal desulfurization	Complex refining; requires hydrotreating & hydrodesulfurization
Refinery requirements	Suitable for simple and complex refineries	Best suited for advanced, deep-conversion refineries
Fuel output quality	Higher yields of gasoline, diesel, jet fuel	Produces more heavy residues unless upgraded
Environmental impact	Lower emissions, easier compliance	Higher SO₂ emissions; costly environmental controls needed
Price differential	Trades at a premium due to quality	Trades at a discount due to complexity
Typical producing regions	North Sea (Brent), U.S. (WTI), West Africa	Middle East, Venezuela, Canada, Mexico
Market demand	High demand, widely preferred	Moderate demand, depends on refinery configuration

The distinctions between sweet and sour crude oil—from sulfur content and refining complexity to environmental impact and market pricing—play a major role in global refining strategy. Sweet crude offers easier processing, lower emissions, and higher yields of premium fuels, making it ideal for simple to mid-complexity refineries. Sour crude, though harder and more expensive to refine, is abundant and economical for advanced refineries equipped with hydrotreaters, hydrocrackers, and deep-conversion units. 

Ultimately, the choice between sweet and sour crude depends on refinery configuration, environmental regulations, operational cost limits, and market economics. Complex refineries often prefer sour crude for its lower purchase price, while simpler refineries prioritize sweet crude for efficiency and fuel quality. Understanding the difference between sweet and sour crude oil is essential for optimizing refinery profitability, compliance, and long-term refining strategy. 

Reference:

Difference between sweet and sour crude oil for refinancing, Aztech Training, 10 December 2025

Is Stagflation Unavoidable for the Global Economy?

 

The price of key oil benchmarks had already posted their highest weekly gains in six years by the time markets opened on 9 March 2026 – when they soared to more than US$115 a barrel. This has surpassed $100 for the first time since Russia’s 2022 invasion of Ukraine. The West Texas Intermediate (WTI) benchmark price for US crude is now nearly double its January level of about $60 a barrel. 

Oil production cuts across the Middle East in recent days have exacerbated fears of a supply shortage. Gas and fertiliser supplies have also been hit, driving up costs and increasing the risk of a significant global energy price spike, adding to inflation and slowing economic activity.

 

Source: https://en.wikipedia.org

The US war on Iran is widely expected to boost inflation across the world, with a sustained rise in oil prices rippling through the wider economy. US inflation will surge to 3.7% if oil prices hold at $100 a barrel. Americans filling up their cars can already feel the impact: US fuel prices rose 25 cents over the week, and picked up another 25 cents over the weekend, averaging $3.44 a gallon. Higher fuel costs drain workers’ wallets and add to business costs in other ways, pushing up the price of goods from food to furniture. 

Inflation is also set to pick up across the UK and eurozone if higher oil prices persist, according to Oxford Economics. Europe, which imports the vast majority of its oil and gas, saw natural gas prices rise nearly 67% in the war’s first week, according to analysts at ANZ Bank. China’s producer prices will meanwhile rise 0.4 percentage points if oil prices stay high, ANZ Bank has projected. In Australia, inflation is set to approach 5% – close to 1 percentage point higher than pre-war predictions – economists say. Petrol prices could rise by a dollar a litre, Westpac economists warned, with costs already A$0.20 a litre higher than in February. 

Oil price spikes are “stagflationary”: they slow down, or stagnate, economic activity, raising the risk of recession, while adding to inflation. World economic growth would weather a 10% lift in energy prices, according to the International Monetary Fund, but slow from about 3.2% to 3%. The UK and the euro area would each grow by just 1% or less, if the conflict persists, economists predict. 

Asian economies have enjoyed strong growth in industrial production, powered by the global tech boom, but an energy shock could disrupt that momentum, risking stagflation, Oxford Economics has warned. In the US, oil prices of $125 a barrel could cut gross domestic product by 0.8% even as inflation surpasses 4%, according to RSM, a middle-market assurance, tax and consulting firm. The oil shock resembles those seen in the 1970s. 

The world is likely to face slower growth and higher prices, even if Trump ends the war, because oil prices will not return to their lows of January. Traders will charge a premium to cover the risk of a renewed “on-again, off-again” conflict. Countries across Asia, which is particularly reliant on oil from the Middle East, are already scrambling to mitigate the impact of the extraordinary rise in prices. 

A quick de-escalation would help the world avoid an inflation spiral, as oil prices would stabilise, according to the National Australia Bank’s chief economist, Sally Auld. While she said it seemed unlikely the conflict would endure for another month, if it did, there would be “material risk of global recession” and oil prices could hold near US$120 a barrel. A month-long disruption could even see prices surpass the all-time record high of US$145 a barrel, Goldman Sachs has estimated. Three months of disruption would see prices rise to US$185 per barrel, with severe consequences for the global economy, Westpac economists predict. 

Nothing bodes well for this U.S. President. Only when markets crash and inflation rises in the U.S. will he stop this man-made crisis. There is no endgame or outcome or Plan B! If he is keen to have a regime change – then change North Korea, China, Russia and a whole host of African and Latin American leaders. Will he do that? No!

 

Reference:

Why has the Iran war sparked fears of stagflation for the global economy? Luca Ittimani,
9 March 2026