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Malaysian real estate: How to know if the market is overheated or in a bubble?
I don't buy the "house prices will always increase due to the increased cost of raw materials" argument. In a lot of countries you will find that the cost of (re)building a property is substantially lower than its perceived sale value. If it wasn't, there would be no incentive for developers to take the risk of buying the land and building houses on it. Say the cost of building the house is 50% of the sale price (which might already be generous). Materials probably account for half of the building cost so you've got 25% tail wagging 75% dog? I'd start to worry if people buy property as a get rich quick scheme, which seems to be what you're describing.