Household debt a matter of concern


Household debt in Malaysia has reached levels that should concern our economic planners.

Graph: Standard Chartered - 'Asia leverage uncovered'
Graph: Standard Chartered – ‘Asia leverage uncovered’

If we look at the breakdown of the household debt we can see several items that that are much higher than what our regional peers are experiencing – housing loans, car loans and margin loans.

Graph: Standard Chartered - 'Asia leverage uncovered'
Graph: Standard Chartered – ‘Asia leverage uncovered’

If we want to ease the burden on Malaysian households, we need to think of how we can make housing more affordable and find alternatives to private motor vehicles.

To make house prices fall within the reach of the masses, we have to find ways to curb speculation (both local and foreign) and ensure more affordable housing is built.

As for transport, there is no other way out but to reduce our reliance on private motor vehicles and build more efficient and cost-effective public transport systems.

The other factor to consider is, what will be the impact of GST on the most vulnerable households?

Thanks to blog visitor Josiah for the suggestion to look at this topic.

Please help to support this blog if you can.

Read the commenting guidlelines for this blog.
Notify of

Most Voted
Newest Oldest
Inline Feedbacks
View all comments
tan kok seong

young Penangites in debt (eg PTPTN) can learn to be creative like the Thais. Go to Chartuchak weekend market for a study tour. Return to Penang and turn Campbell Street or any other empty streets into carnival like bazaar offering unique products to earn extra income.


Such entrepreneurship are not taught by MARA as their ‘lawatan sambil belanja’ study tour are often spent in lavish air-conditioned shopping mall.

Anyway, BN would not encourage such weekend market as they have already wanted to shut down Jonker Walk weekend pasar malam.


One factor why many of our youth can’t move up the ladder of career or work in the careers of their choice & earn more is our racist education policy since the 1970s. Thinking that this would help the educationally handicapped or ‘slow brains’ of a particular race & balance the education potentials of all Malaysians, instead it produced a workforce that is not at par or competitive with other Asian nations for decades. The alarming loss of our talents to other nations is undeniable yet the government is taking a tidak apa brain dead approach by bringing down the… Read more »


Pakatan Govt in Penang also does not have the guts to prevent property speculation. LGE and team conveniently points the finger at the Federal Govt.
What prevents Land Office or MPPP and MPSP from putting massive Fees for properties transferred within the 1st year of getting OC?
If the transfer fees for a 500,000 house is going to be 50,000 or more with the first year, there goes all the profit these speculators are going for.
Stop blaming the federal govt for everything, there is more than 1 way to skin a cat


Just imagine: You are ‘thrown’ from space into this beautiful blue marble called Earth. You are naked, innocent, pure & uncorrupted / unscarred in thoughts, emotion, spirit & body. Your journey of life experiences has just begun. You feel inside your fresh soul a sense of endowed purpose, a mission entwined with your in-born talents, natural skills, aptitude & personality. You are Unique You, different from any DNA ever created in existence in real time, in real space/dimension. Now, as you grow up under a parental guidance, mould by (influential) cultural, social & economic norms, circumstances & expectations, you may… Read more »


remember the days when we can live without mobile phones? no wonder young people start spending big from early age.

a movie ticket used to be just RM5, now we are forced to pay more for 3D and IMAX!


3rd class 65ct front 2-3 row
2nd class 1.40
1st class 20.0
and circle 2.50

Andrew I



Kiam Siap movie pastime: always bought 3rd class tickets minus one, warmed the seats for 15 minutes into show, went to toilet for twitter’s hosing, ‘upgrade’ to 1st or 2nd class seats (if available).
Thanks God, most inspectors with Eveready torchlight were of night blindness.

simple man

Yang & tunglang
My 12 year old grandson told me he bought RM7 ticket and managed to watch 3D movie at cineplex – so young people nowadays know how to sneak sneal as well.


In the 70’s I used to enter the cinema hall by ‘paying’ 50 sen to the ‘jaga pintu’ guy.
But it could be done at non-peak hours.

I think the same jaga pintu guy has upgraded since then to take on ‘higher commision’ during the Mahathir era.


My Papa+Mama prudent days of earning & spending in the 20s – 70s: Bought everything with hard cash earned with blood, sweat & tears. Won’t buy but deferred or ‘forget it’ if not enough cash in rusty Milo tins. “Bing Chooi” was a richie concept for the richie neighbours. No need to pretend or save face if one was not rich to show face. Thick Face, Prudent Heart was ego-management of the day. Extra cash from pawned jewellery or ‘tontine’ but for short term extra-cash flow discipline. Extra income from odd jobs like home cleaning or tailoring. Kept many Milo… Read more »


Frugality as you have described is a lost virtue today when one can borrow with credit card for instant gratification.

simple man

Live life in simplest form (check out early days Bhutan where capaitalist commercialism not way of life).
Gaming (eg angry birds, candy crush, toto etc) & bend head communication (smart tech mobile) dictate present days spiritual gratification ?
BTW, tunglang forgot to mention peeping at Rosie Chan at New World ? 🙂


What’s there left to peep at when Rosie was tip-toe dancing sideway & fully wrapped up by Hercules’ python from neck to heel. And the timely ‘black out’ at the exciting ‘unwrapping’ finale brings to mind the suspected TNB legacy of (alleged) black outs during the recent GE13!!!


Another interesting insight – one of many factors contributing to huge personal debt.


I think BNM can nip this in the butt. Things will really get messy when people start losing jobs. But as things stand, when businesses are in trouble they usually move to lower cost countries – like Malaysia, so the risk of unemployment is not significant. We are different from the US and the Europe in that sense. BUT this is still an unhealthy sign and the we need to fix it. House prices are too high, and income has not caught up. People will resort more to renting like in Australia.


For the above who bring up GDP, please get realistic and STUDY the actual usage of GDP GDP is a 50 years old concept just for some calculation usage, it is NEVER effective to show the real production. Check the formula properly, you will spot the real SNAFU. GDP = private consumption + gross investment + government spending + (exports − imports) So if Bolehland(TM) tomorrow build a gigantic tree that cost 100 billions which served NO PURPOSE, you will see Bolehland GDP add another 100 billions. Also, GDP fail to show real value adding production. This issue already clearly… Read more »

semuanya OK kot

I’m so pround that Bolehland wins again.

Kiasu mentality + Plutocracy + Ah Long* = Pokai.

* both legal and illegal


Many say RM400K is affordable house, are they out of their mind? How much is the monthly repayment for that type of loan?


Better clear your whatsoever debt first and not indulge in further syiok sendiri purchases to increase your burden !

If report is true, then Tenanga will raise elecric tariff per market floating mechanism.

Soy sauce to increase by 15-20% by next month, more reasons for food vendors to raise prepared food prices !

looks like barang naik phenomena is ditepati !


Truth be told, household prices has little to do with speculation..The speculation actually caused by household prices. Household prices is rising because of central banks loose monetary policy all over the world including our own. Govt are slow or not reforming including our own because reform is very hard everywhere including our own. The main difference between govt all over the world is their fiscal position. Eventually all these loose monetary policies will end and then the real pain will begin – then housing will be cheap but people won’t have jobs to pay for it. The govt who reform… Read more »


Housing and cars are main culprits. Developers says land are scarce – bulls… Developer says labour cost high – true due to government flip flop policy on foreign workers permits.From my experience currently kongsi kong workers asking $80.00 per day.Hopeless workers with NO skills at all. Developers and Bank the major culprit – almost 0% down payment, interest free,legal fees free make the speculators makes $ .After the house complete 80% for sale in secondary market.Price shoot up.The next launch developer increase the price at market rates of previous units. rajraman666.Bought a condo which launching price $200k for 350k from… Read more »


If only Tun M focus on world class public transportation instead of the Proton project, today we could buy housing at the outskirts area at lower price and use public transportation. So it was a mistake by BN.


It is a mistake to rakyat but the cronies in umno deliberately made such policy to enrich the elite few in the name of having Malays driving their own cars instead of driving as a driver to rich taukes.



Here is a good short documentary on Singapore’s public transportation:

There is o such thing as ‘Bas Pajak’ in Singapore.

Onn Wee Chin

Learn about Singapore’s public transportation in this documentary:

Certainly Penang government can benchmark here.


Basically why the loan ratio to GDP is high because of our low GDP which has to do with productivity.Higher productivity will produce higher GDP and that will lead to higher income for the workers.And higher income will lead to less needs for margin loan(like personal loans) to make ends meet. As to the high auto loan ratio is because of the duty protection which makes car price higher.Singapore has much lower ratio(eventhough their car price is not that really cheap) is because they have a very efficient public transport system,so is Hong Kong.Korea auto loan is zero maybe bcos… Read more »


Productivity is expected to drop in Ramadan month as public library opens late but closes early. Debt ratio to GDP expected to hit 98% by 2018. People now lives on future money, including the youngsters buying practically everything on credit, without realising they could inherit no money from their parents but more debt!

People now not content with a 40″ TV as they are now gunning for 80″ ones for HD display. Smartphones made young people dumber ws they do not exerciwe their logical right brains, thus failed to practise proper financial planning.

Don't worry be happy

But almost 50% of us voters had REFUSED free education, cheaper petrol, cheaper cars, cheaper homes, basic foods, as proposed by Pakatan, so it means we all got money so no need to worrylah.

Andrew I

Debatable, since we don’t know how many wereus and how many were them.


Don’t worry be happy,
You are telling Penang and Selangor cost of living is cheaper than other state and their household debts is lower? What about LGE doing about bringing down housing price?

rajraman.I hate Barisan but I don’t buy Pakatan political trader either.All politician sell their saliva for votes.I whack both side of Political Trader.They are rakyat “KULI” but must call them YB.

Andrew I

Has anyone seen how big a packet of our instant mee goreng has become compared to one manufactured in Singapore?

With gst, I think we can boil the mee in a Chinese teacup.


Good may help you to get slimmer. No need to waste money on slimmer course

Andrew I



I don’t think that’s funny!


Just compare the size of Singapore’s Myojo Mee with Malaysia’s Mee Sedapp.

Andrew I

PAP’s secret weapon.


Not just the size/weight of dry noodles in instant mee – check out the ingredients packet inside also being reduced over the years.

Many items like nuggets may maintain the price but the packet weight being reduced from 1kg to 900g now 800g !

Also 3-in-1 kopi, from 30 packets to 25 packets for example !

It’s like to work longer hours but the salary remain the same.

Welcome to high income nation 2018 ?

najib manaukau

That is why Bank Negara is introducing ways and means to curb the lending that is going on, not to alarm the public with the seriousness of the true situation. they should get … the shenanigan Mahathir to come up with a solution. (He) has all the solutions to all the problems Malaysia is having, except he could not get the Malays to support the candidates he campaigned and supported for. A true scenario of a physician cannot heal thyself, how pathetic !


Hutang isi rumah semakin tinggi: Salah siapa? Saban tahun laporan ekonomi sentiasa mencatatkan ‘ayat-ayat positif’ daripada pihak bertangungjawab seperti, “masih belum sampai ke tahap kritikal”, “pencegahan telah dilakukan sebelum bertambah parah”, “masih dalam pemantauan”, “akan mengarahkan institusi kewangan bersikap proaktif”, “kita sudah memperkenalkan program pendidikan kewangan”, “bahagian pemberian pinjaman isi rumah daripada jumlah pemberian pinjaman bank kekal stabil” dan lain-lain kenyataan. Walhal, kita membicarakan tentang peminjaman isi rumah yang semakin meningkat sejak sepuluh tahun lalu, dan ayat positif sedemikian tidak langsung cocok dengan tahap keberhutangan isi rumah yang semakin meningkat saban tahun, ditambah pula harga rumah yang meningkat dan pertumbuhan… Read more »


THE number one problem many middle and lower income groups is facing today is high debts. It is a wake-up call for Malaysians on their poor financial planning. I was astonished to learn that the Malay­sian household debt has surged to 83% against our Gross Domestic Product (GDP). The figures are frightening at a time when one has to tackle the rising cost of goods and services and the cost of living has skyrocketed. Those in the middle and lower income groups are facing the pinch with schoolgoing children, payment of house rental or housing loan, car and credit card… Read more »


Urban lifestyles require smart dressings, latest state-of-art communication gadgets, drive flashy vehicles, dine not at street corners but indoor air-con servings, live in condo with superb amenities —– no worry as can be aided by weekly instalment plans —- belakang kira mentality of Gen Z.