Malaysian Economy And Property Market


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mpact Of Fuel Price Hike On Malaysian Property Market

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Malaysian Economy And Property Market

  1. 1. Malaysian economy and Property market Prepared by JS Valuers Research & Consultancy Sdn Bhd
  2. 2. <ul><li>What is the impact of petrol price increases? </li></ul>
  3. 3. Will people still purchase property? UNCERTAINTIES
  4. 4. Will the property market crash?
  5. 5. On the Agenda <ul><li>Lets talk about economy </li></ul><ul><li>Understanding the demographic trend </li></ul><ul><li>The property trend </li></ul><ul><li>Conclude by discussing on the Market outlook </li></ul>
  6. 6. Malaysian economy
  7. 7. The Malaysian economy <ul><li>Overview of Malaysian economy </li></ul>
  8. 8. The Malaysian economy <ul><li>Economic risks </li></ul><ul><ul><li>Balancing works by Bank Negara Malaysia </li></ul></ul><ul><ul><li>US economic recession </li></ul></ul><ul><ul><li>Continuing fuel price increases </li></ul></ul><ul><ul><li>Private consumption; change of people lifestyle </li></ul></ul><ul><ul><li>Political risks on FDIs, market sentiments, etc. </li></ul></ul>
  9. 9. Moving forward… 2008 <ul><li>GDP growth at 5% to 6% in 2008 </li></ul><ul><li>Fuel prices will remain high </li></ul><ul><li>High inflations, e.g. 6% to as high as 9% </li></ul><ul><li>Volatile share markets </li></ul><ul><li>Potential BLR adjustments </li></ul><ul><li>Reduced purchasing power </li></ul><ul><li>Cautious market sentiments </li></ul>
  10. 10. Demographic trend… 132.0 129.5 997 Sabak Bernam Selangor 228.0 133.9 605 Sepang (incl Putrajaya) Selangor 106.0 180.2 1,746 Ulu Selangor Selangor 162.0 187.1 1,178 Kuala Selangor Selangor 269.0 226.0 858 Kuala Langat Selangor 995.0 634.9 652 Gombak Selangor 1,265.0 776.9 627 Klang Selangor 1,309.0 1,055.3 829 Ulu Langat Selangor 2,971.0 1,412.2 487 Petaling Selangor 6,502.0 1,556.2 243 Kuala Lumpur K Lumpur Density (people/sq. km.) Total Area (sq. km) District State
  11. 11. Demographic trend… Kuala Lumpur Total-1.56 mil Density-6,502 pskm Petaling Total-1.41 mil Density-2,971 pskm Hulu Langat Total-1.06 mil Density-1,309 pskm Klang Total-0.777 mil Density-1,265 pskm Gombak Total-0.64 mil Density-995 pskm Kuala Langat Total-0.23 mil Density-269 pskm Kuala Selangor Total-0.19 mil Density-162 pskm Sepang Total-0.14 mil Density-228 pskm Hulu Selangor Total-0.18 mil Density-106 pskm Sabak Bernam Total-0.13 mil Density-132 pskm
  12. 12. Property sector <ul><li>Property transactions in Kuala Lumpur and Selangor from 1996 to 2007 </li></ul>Recession Slowdown Low interest rates
  13. 13. Which is the hot sector?
  14. 14. Residential sector <ul><li>Transactions of residential properties in Kuala Lumpur and Selangor from 1996 to 2006 </li></ul>Recession Slowdown All sectors Affordable High end Low interest rates
  15. 15. Residential sector–Hot spots KLCC, Ampang, Bukit Tunku Mont Kiara, Bangsar, Sri Hartamas Damansara Petaling Jaya Utara Cheras Petaling Jaya Selatan, Subang Jaya Puchong Shah Alam
  16. 16. Potential impact - General <ul><li>Costlier traveling cost </li></ul><ul><li>Higher inflation – chain reactions </li></ul><ul><li>Impending higher cost of borrowings, e.g. increase of BLR </li></ul><ul><li>Lower economic growth </li></ul><ul><li>Reduced private consumption </li></ul><ul><li>Political uncertainties </li></ul>
  17. 17. Potential impact – Property Market <ul><li>Consolidation & market correction… </li></ul><ul><ul><li>Fewer new launches </li></ul></ul><ul><ul><li>Adjustments between cost & market price </li></ul></ul><ul><li>More negative list projects </li></ul><ul><li>Improved demand for residences near to city centre and town </li></ul><ul><li>Public transportations… increasing important consideration </li></ul><ul><li>Higher risks of projects being abandoned </li></ul>
  18. 18. Life finds a way The market has survived the worst
  19. 19. Thank you Q & A
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