Presentation slides of recent reports & insights of the Global & Malaysian economy 2013. This was presented at the Wealth Mastery Academy's Property Outlook 2013

1. 2013 Global outlook: will the Performance of Malaysian
Property & Investment Markets be affected
“Connecting the dots between global economy ….
……and property purchasing decisions”
REI Group of Companies
Presentation by Dr. Daniele Gambero

3. An organization is more than its bottom line.
Facts and figures, although a convenient way to
depict a company's success, don't show culture
or character.
One must look further to a company's people,
to its business culture, to its place and
reputation in the market to be able to see the
entire picture.
REI Group of Companies was established in
2007 and, in 2008, registered the subsidiary REI
Properties Sdn Bhd with the Board of Valuers,
Appraisers and Real Estate Agents (License no.
E(1)1213).
Since then the Group has been successfully
growing and has handled several residential
and commercial development projects in Klang
Valley as Project and Marketing Consultant and Dr Daniele Gambero and Ms. Annie Chee REI Group Directors and Co-founder
Exclusive Marketing Agent
“The ability to convert ideas in facts is the secret to outward success”

4. “The ability to convert ideas in facts is the secret to outward success”

5. Track of record:
Selayang Springs Condominium - Selayang
Selayang Boulevard and Selayang Residence
Sazean Business Park – South Klang
D’Green @ Taman Meru Permai Residen – Meru Klang

6. Track of record:
Mutiara Bukit Jalil Phase 3 – 3 Storey Superlink
the new way of doing Business in Malaysia
The Tree Pillars @ Signal Hill – Kota Kinabalu

7. WORLD ECONOMIES IN A GLOBALIZED ERA

8. WORLD ECONOMIES ANALYSIS AND TREND
INDICATORS.

9. WORLD ECONOMIES ANALYSIS AND TREND
INDICATORS.

10. US Economy status for 2012 and outlook 2013

11. US Economy status for 2012 and outlook 2013
August 2011

12. US Economy status for 2012 and outlook 2013
Current account balance (export – import) world ranking

13. US Economy status for 2012 and outlook 2013
The consumer confidence index was started in 1967 and
benchmarked in 1985 = 100

14. US Economy status for 2012 and outlook 2013
-20%

15. US Economy status for 2012 and outlook 2013
?

16. EUROPEAN Economy status for 2012 and outlook 2013

17. EUROPEAN Economy status for 2012 and outlook 2013

18. EUROPEAN Economy status for 2012 and outlook 2013

19. EUROPEAN Economy status for 2012 and outlook 2013
-27

20. EUROPEAN Economy status for 2012 and outlook 2013

21. CHINA Economy status for 2012 and Outlook for 2013

22. CHINA Economy status for 2012 and Outlook for 2013
: Xi Jinping, 59 years old…. only

23. World Economy Status for 2012 and outlook 2013

24. Malaysian Economic and Property Market Performance:
2013 Outlook

25. MALAYSIA’S ECONOMIC PERFORMANCE 2012 and outlook 2013

26. MALAYSIA’S ECONOMIC PERFORMANCE 2012 and outlook 2013

27. MALAYSIA’S ECONOMIC PERFORMANCE 2011-2013
FEW CONSIDERATION ON MALAYSIAN POPULATION AND
WEALTH:
Malaysian labor force = 12,000,000 (40% of the whole population)
Agriculture – 13%
Industry – 36%
Services – 51%
GDP per capita
RM28,000.00 (per year)
Malaysia ranking No. 69
Italy No. 27
Korea No. 37
World No. 65…
Source: UN statistics

28. MALAYSIA’S ECONOMIC PERFORMANCE 2011-2013

29. MALAYSIA’S ECONOMIC PERFORMANCE 2011-2013
FEW CONSIDERATION ON MALAYSIAN POPULATION AND
WEALTH:
Malaysian average per capita income (2011)
USD961 = RM3,000 (per month)
Malaysian Wealth Distribution
Lowest 10% - 1.8% Highest 10% - 28%
=
Median 80% - 70.2%

30. MALAYSIA’S ECONOMIC PERFORMANCE 2011-2013
China AA- Stable
Greece SD ?????
India BBB- Negative
Indonesia BBB- Positive
Italy BBB+ Negative
Japan AA- Negative
Malaysia A- Stable
Philippines BB Stable
Russia BBB Stable
South Korea A Stable
Spain BBB+ Negative
Taiwan AA- Stable
Thailand BBB- Negative
United States AA+ Negative
Vietnam BB- Negative

31. MALAYSIA’S ECONOMIC PERFORMANCE 2011-2013

32. MALAYSIA’S ECONOMIC PERFORMANCE 2011-2013

33. MALAYSIA’S ECONOMIC PERFORMANCE 2011-2013

34. Malaysian Property Market – 2013 Outlook
Bank Negara new Mortgage “rules”
1)More than 3 properties: maximum MOF 70%
2)Loan approval based on “Net income” ONLY
3)Maximum debt capacity: 65% of Net income
4)Request to maintain MOF as low as possible (recommended below 85%)

35. Malaysian Property Market – 2013 Outlook
RPGT and the 2013 Budget

36. Malaysian Property Market – 2013 Outlook

37. Malaysian Property Market – 2013 Outlook

38. Malaysian statistics and migration trend: sustained demand!
Malaysian population in 2011:
29,000,000

39. Housing Market Indicators
1)Housing Affordability Parameter: average or median house price over average per
household income. In other words, are houses affordable?
AVERAGE PER HOUSEHOLD MONTHLY INCOME = RM6,000.00
BANKS ARE LOOKING AT A MAX DEBT CAPACITY OF 65% OUT OF NET INCOME
RM6,000.00 x 65% = RM3,900.00 (MAX DEBT CAPACITY)
CURRENT COMMITMENT = - - RM2,000.00
AVAILABLE FOR HOUSING LOAN = RM3,900.00 – RM2,000.00 = RM1,900.00
LOAN PARAMETERS
MONTHLY REPAYMENT RM1,900.00
LOAN TENURE = 30 YRS
MARGIN OF FINANCING = 85%
BLR-2.2%=4.4%

40. Housing Market Indicators

41. Malaysian Property Market – 2013 Outlook

42. Malaysian Property Market – 2013 Outlook
From the 2013 Budget speech by YAB Dato’ Sri Mohd Najib:
… the Government will allocate RM1.9 billion to build 123,000 affordable
units (houses)…. The initiative will be implemented by PR1MA…
… RM500 million will be spent by PR1MA to built 80,000 houses in major
location nationwide with selling price ranging between RM100,000 and
RM400,000 per unit.
… PR1MA will provide the Housing Facilitation Fund RM500 million to
built houses in collaboration with private housing developers…. House
price 20% below market….
……….
With the Budget 2013 the Government has promised the delivery of
269,164 new houses…
with values ranging between
RM30,000 to RM400,000 (Affordable)

43. Malaysian Property Market – 2013 Outlook

44. Housing Market Indicators
AVERAGE HOUSE VALUES FOR KL AND SELANGOR
Source: National Property Information Centre (NAPIC) “Property Market Report 2011”
Average cost of a home (condominium)
Kuala Lumpur RM487,000
Selangor RM327,000
Average cost of Landed home (Terrace)
Kuala Lumpur RM527,000
Selangor RM326,000

45. Housing Market Indicators

46. Housing Market Indicators
2)Deposit to income ratio: minimum required down-payment for a typical mortgage, expressed in
months or years of income. It is especially important for first-time buyers without existing home
equity. If the down-payment becomes too high then those buyers may find themselves "priced out"
of the market.
AFORDABLE HOUSE VALUE – RM350,000.00
10 to 15% DEPOSIT – RM35,000.00 TO RM52,500.00
Malaysians are weak on this as, in general, families are not yet having a saving “culture”.
Developers, however, looking at this issue as a possible failure of their new launches,
have studied a wide range of possible offers such as:
-Low deposit schemes
-Installment plans in case MOF will be lower than 90%
-Free SPA and Loan Agreement legal fees
DEPOSIT TO INCOME RATIO…
MADE
AFFORDABLE

47. Housing Market Indicators
3)Median Multiple: measures the ratio of the average house price to the average annual
household income OR average monthly mortgage to average monthly income.
This measure has historically hovered around a value of 3.0 .
HOUSEHOLD AVERAGE TAKE-HOME MONTHLY INCOME = RM6,000.00
AFFORDABLE PROPERTY VALUE RM350,000.00
MARGIN OF FINANCING 85%
LOAN TENURE 30 YEARS
INTEREST 4.4%
ACTUAL MONTHLY MORTGAGE COST = RM1,902.00
RM6,000.00
= 3.15
RM1,902.00

48. MALAYSIA’S PROPERTY MARKET OUTLOOK 2013

49. Thank you
For questions please email to:
daniele.g@reigroup.com.my
propertynews@reigroup.com.my