Price increase in the houses at the city is caused by increase in demand while supply diminishes. As has been pointed out in my earlier postings, every unit of new house built in any given area means the diminishing supply of such land suitable for such purpose.
Based on this reason and as a long term approach, the government should consider working on the supply side of new housing for the rakyat by redirecting the demand to rural area. At least on this side, the supply is more than sufficient to meet the demand.
Middle income group which comprises of young professionals are finding the supposedly affordable house have NOW become unaffordable to them.
Modernising rural areas to turn into modern towns - will that help in making the house affordable in this area and by taking away the excessive demand in the city, the house there will become more affordable to the middle income group?
Construction of road and highway, infrastructure for communication and connectivity and other basic facilities of township will attract investment to the rural town. With the creation of industry, it will be followed by creation of job opportunity. With creation of income, there will be expenses, thus creating opportunity for other businesses to mushroom.
Development of rural areas will stop the young locals from moving out to the city for job opportunity. With all the basic facility and amenity of the city that can be found here, It may even attract outsiders from the city to move in and settle down here.
When the demand for houses can be met by sufficient supply of the same, the price increase will happen more as gradual, steady appreciation in value as a form of investment and not because of excessive, erratic demand which is bad for the economy
