Download - Malaysian Economy And Property Market

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Page 1: Malaysian Economy And Property Market

Malaysian economy and Property market

Prepared by

JS Valuers Research & Consultancy Sdn Bhd

Page 2: Malaysian Economy And Property Market

What is the impact of petrol price increases?

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Will people still purchase property?

UNCERTAINTIES

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Will the property market crash?

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On the Agenda• Lets talk about economy

• Understanding the demographic trend

• The property trend

• Conclude by discussing on the Market outlook

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Malaysian economy

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The Malaysian economy

• Overview of Malaysian economy

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The Malaysian economy

• Economic risks

– Balancing works by Bank Negara Malaysia– US economic recession– Continuing fuel price increases– Private consumption; change of people

lifestyle– Political risks on FDIs, market sentiments,

etc.

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Moving forward… 2008• GDP growth at 5% to 6% in 2008• Fuel prices will remain high• High inflations, e.g. 6% to as high

as 9%• Volatile share markets• Potential BLR adjustments• Reduced purchasing power• Cautious market sentiments

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Demographic trend…State District Area

(sq. km)Total Density

(people/sq. km.)

K Lumpur Kuala Lumpur 243 1,556.2 6,502.0

Selangor Petaling 487 1,412.2 2,971.0

Selangor Ulu Langat 829 1,055.3 1,309.0

Selangor Klang 627 776.9 1,265.0

Selangor Gombak 652 634.9 995.0

Selangor Kuala Langat 858 226.0 269.0

Selangor Kuala Selangor 1,178 187.1 162.0

Selangor Ulu Selangor 1,746 180.2 106.0

Selangor Sepang (incl Putrajaya) 605 133.9 228.0

Selangor Sabak Bernam 997 129.5 132.0

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Demographic trend…

Kuala LumpurTotal-1.56 milDensity-6,502 pskm

PetalingTotal-1.41 milDensity-2,971 pskm

Hulu LangatTotal-1.06 milDensity-1,309 pskm

KlangTotal-0.777 milDensity-1,265 pskm

GombakTotal-0.64 milDensity-995 pskm

Kuala LangatTotal-0.23 milDensity-269 pskm

Kuala SelangorTotal-0.19 milDensity-162 pskm

SepangTotal-0.14 milDensity-228 pskm

Hulu SelangorTotal-0.18 milDensity-106 pskm

Sabak BernamTotal-0.13 milDensity-132 pskm

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0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007RM 0

RM 5,000

RM 10,000

RM 15,000

RM 20,000

RM 25,000

RM 30,000

RM 35,000

RM 40,000

RM 45,000

Total (No.) Total (RM)

Property sector• Property transactions in Kuala Lumpur and Selangor from 1996 to 2007

Recession Slowdown

Low interest rates

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Which is the hot sector?

Commercial9%

Development5%

Others0%

Residential64%

Agricultural19%

Industrial3%

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0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007RM 0

RM 5,000

RM 10,000

RM 15,000

RM 20,000

RM 25,000

Total (No.) Total (RM mil)

Residential sector• Transactions of residential properties in Kuala Lumpur and Selangor from 1996 to 2006

Recession Slowdown

All sectors Affordable High end

Low interest rates

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Residential sector–Hot spots

KLCC, Ampang, Bukit Tunku

Mont Kiara, Bangsar,Sri Hartamas

DamansaraPetaling Jaya Utara

Cheras

Petaling Jaya Selatan,Subang Jaya

Puchong

Shah Alam

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Potential impact - General

• Costlier traveling cost• Higher inflation – chain reactions• Impending higher cost of borrowings,

e.g. increase of BLR• Lower economic growth• Reduced private consumption• Political uncertainties

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Potential impact – Property Market

• Consolidation & market correction…– Fewer new launches– Adjustments between cost & market price

• More negative list projects• Improved demand for residences near to

city centre and town• Public transportations… increasing

important consideration• Higher risks of projects being abandoned

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Life finds a wayThe market has

survived the worst

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Thank youQ & A