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Housing has played a central role in both the Asian and global financial crises, a decade apart. While there are major differences with respect to these roles, there are also similarities, the most obvious being the links with the banking system. The impact of these crises on the housing sector has been extensively researched, but findings have been overwhelmingly based on aggregate or sector data. Using firm-level data from Malaysia on the Asian financial crisis, this article argues that such findings can yield a distorted picture of what actually occurred in real estate markets where contextual factors played a major role. A study of ethnic Chinese businesses, which dominated the Malaysian housing sector, show that the severe impact was primarily on businesses that were over-leveraged and/or that speculated on housing in the expectation of reaping quick returns. They were small compared to the large property businesses that, though affected, survived. Non-residential real estate continued unaffected, fuelled by manufacturing to meet healthy export demand. This, and a political/economic environment accentuated by affirmative action which drove ethnic Chinese businesses toward real estate development, speaks powerfully to the importance of context in understanding specific housing markets during crises.

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