of a sustainable market, the new growth areas for … · of a sustainable market, the new growth...

Malaysian Property Market Mid-year Review

PROPENOMICS OF A SUSTAINABLE MARKET,

THE NEW GROWTH AREAS FOR HIGH RETURN INVESTMENT

AND THE WAY FORWARD TO A 2025

INVESTMENT PLAN

CoﾐﾐeItiﾐg the …… dots Hetweeﾐ eIoﾐoﾏy, deﾏographiI treﾐds aﾐd ﾐew housiﾐg IoﾐIepts

REI Group of Companies

Presentation by Dr. Daniele Gambero

CONSULTANCY

- Strategic Marketing Consultancies: design,

concept, pricing, branding

- Property Market Surveys: defining the best

product for each specific area

- Property Market Reporting: give developers

an independent platform to take strategic

decision on future development

- Property Market Analysis: research and

definition of new development products

based on existing market situation

- Branding: adding value by endorsement of

project, branding of new development areas,

defining and creating catalyzer for future

development

- Creative: converting ideas in fact and having

fun

…………What ┘e do

Organizations that have invited Dr. Daniele Gambero as speaker to their

events are:

Rehda KL, Rehda JB, Rehda Malacca and Rehda Penang

Sheda Kuching

Asian Strategic Leadership Institute (ASLI)

FIABCI Malaysian Chapter

iProperty, PropertyGuru Malaysia and Singapore and EG Expos

Malaysian Property Incorporated

University Malaya KL

Wealth Mastery Academy, Comfori and Starfish

Special Property Market Outlook presentation to the Bod of:

Encorp Bhd

Hatten Group

UEM Sunrise

Regular columnist for several newspapers and specialized magazine such as:

The Star

Malaysian Reserve

Malay Mail

PropertyTimes

The Sun

The Edge

Real Estate Malaysia

Property Hunter

Property Insight

Property King

Agenda

Malaysian Economic Performance: room for improvement

Malaysian Economy: Fact File

Malaysian Wealth: meaning of Affordable

Malaysian Real Estate: Strategically Sustainable

Malaysian Real Estate: what and where, 2025 investment plan

Malaysian Property Market: get it right!

MALAYSIAN PROPERTY MARKET Setting the rules for sustainability

STABLE AND DEMOCRATIC POLITICAL ENVIRONMENT

ECONOMIC GROWTH PLANNING AND EXECUTION

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HEALTHY GROWTH OF A REGULATED AND

PROFITABLE PROPERTY MARKET


PROPERTY IS NOT AN ECONOMIC

DRIVER BUT THE CONSEQUENCE

OF PROPERLY PLANNED ECONOMIC

GROWTH

PROPERTY + ECONOMY =


PROPERTY + ECONOMY =

GLOBAL & MALAYSIAN ECONOMY - FACT FILE

INDEX USA EU UK JAPAN AUSTRALIA MALAYSIA

GDP Growth 2.52% 0.12% 0.65% 0.65% 0.65% 4.70%

Gov. Debt as % of GDP 101.60% 90.60% 91.10% 226.1% 20.7% 53.10%

Gov. Deficit as % of GDP -4.10% -3.7% -7.40% -9.6% -3.00% -4.50%

Balance of Current Acc

in USD Billion-360.7 -34.5 -93.6 56.6 -44.9 8.41

Inflation 1.5% 1.5% 2.7% 0.2% 2.4% 3.2%

Unemployment 7.3% 10.8% 7.7% 4.1% 5.7% 3%

SEA REGION & MALAYSIAN ECONOMY - FACT FILE

INDEX VIETNAM INDONESIA THAILAND MALAYSIA AUSTRALIA SINGAPORE

GDP Growth 5.54% 5.72% 0.60% 4.70% 0.65% 5.50%

Gov. Debt as % of GDP 37.30% 23.6% 44.30% 53.10% 20.7% 97.90%

Gov. Deficit as % of GDP -6.90% -1.77% -4.10% -4.50% -3.00% 1.3%


in USD Billion-0.55 -0.43 -2.5 8.41 -44.9 3.4

Inflation 4.65% 7.75% 1.22% 3.2% 2.4% 2.25%

Unemployment 2.22% 6.25% 0.62% 3% 5.7% 1.8%

Population (Million) 88.78 245.90 66.79 29.62 22.79 5.31

Global competitivnes

index (WEF 2013-2014)70 38 37 24 21 2

Stage of development

(WEF 2013-2014)

Stage 1

Factor

Driven

Stage 2

Efficiency

Driven

Stage 2

Efficiency

Driven

Stage 2 to 3

Efficiency

to

Innovation

Stage 3

Innovation

Driven

Stage 3

Innovation

Driven

SEA REGION & MALAYSIAN ECONOMY - FACT FILE

INDEX VIETNAM INDONESIA THAILAND MALAYSIA AUSTRALIA SINGAPORE

GDP Growth 5.54% 5.72% 0.60% 4.70% 0.65% 5.50%

Gov. Debt as % of GDP 37.30% 23.6% 44.30% 53.10% 20.7% 97.90%

Gov. Deficit as % of GDP -6.90% -1.77% -4.10% -4.50% -3.00% 1.3%


in USD Billion-0.55 -0.43 -2.5 8.41 -44.9 3.4

Inflation 4.65% 7.75% 1.22% 3.2% 2.4% 2.25%

Unemployment 2.22% 6.25% 0.62% 3% 5.7% 1.8%

Population (Million) 88.78 245.90 66.79 29.62 22.79 5.31


index (WEF 2013-2014)70 38 37 24 21 2


(WEF 2013-2014)

Stage 1

Factor

Driven

Stage 2

Efficiency

Driven

Stage 2

Efficiency

Driven

Stage 2 to 3

Efficiency

to

Innovation

Stage 3

Innovation

Driven

Stage 3

Innovation

Driven

INDEX MALAYSIAMALAYSIA

1Q 14

MALAYSIA

2Q 2014

GDP Growth 4.70% 6.20% 6.40%

Gov. Debt as % of GDP 53.10%65.2%

Redefined65.2%

Gov. Deficit as % of GDP -4.50% -4.10% -4.10%


in USD Billion8.41 8.38 5.94

Inflation 3.2% 3.40% 3.30%

Unemployment 3% 2.80% 2.60%

Population (Million) 29.62 = =


index (WEF 2013-2014)24 = =


(WEF 2013-2014)

Stage 2 to 3

Efficiency

to

Innovation

= =

MALAYSIAN DEMOGRAPHIC - FACT FILE

+1.6 M

+3.6 M

+2.6 M

+6 M

MALAYSIAN MIGRATION FLOWS - FACT FILE

2012: 21,000,000 Malaysians live in urban areas 3.5% growth every year

2012: 72.5% of the Malaysian population lives in urban areas

15,000,000.00

16,000,000.00

17,000,000.00

18,000,000.00

19,000,000.00

20,000,000.00

21,000,000.00

22,000,000.00

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

MALAYSIAN FLOW

Malaysian Migration Flow Rural to Urban Areas

Source: World Bank Statistics

FEW CONSIDERATION ON MALAYSIANS WEALTH:

Malaysian average per capita income 2013 (PPP) – Source IMF/WB

USD17,046 per year = RM4,400 (per month)

Malaysian Wealth Distribution Lowest 20% Highest 20% Share 5% of Malaysian wealth Share 40% of Malaysian wealth

=

Median 60% share 55%

MALAYSIAN WEALTH DISTRIBUTION - FACT FILE

18,000,000

20% of Houses as low/medium

low cost

Malaysian Wealth Distribution Lowest 20% Highest 20% Share 5% of Malaysian wealth Share 40% of Malaysian wealth

=

Median 60% share 55%

MALAYSIAN WEALTH DISTRIBUTION - FACT FILE

18,000,000

20% of Houses free and open value RM/psf

60% of Houses should have values from

minimum RM200 up to max RM700 psf

FEW CONSIDERATION ON AFFORDABLE HOUSING

Wealth distribution and affordability

2012 Yearly Monthly Per capita Per household

RM Billion RM RM RM RM RM

Kuala Lumpur 1,718,680 114,106 73,931 6,161 2,156.32 480,000 720,000

Sarawak 2,501,000 71,874 40,414 3,368 1,178.74 260,000 390,000

Pulau Pinang 1,654,640 52,530 37,006 3,084 1,079.34 240,000 360,000

Selangor 5,626,240 176,239 36,135 3,011 1,053.94 240,000 360,000

Malacca 832,320 21,953 33,550 2,796 978.54 220,000 330,000

Negeri Sembilan 1,040,400 27,717 32,511 2,709 948.24 220,000 330,000

Pahang 1,560,600 30,750 26,197 2,183 764.08 165,000 247,500

Johor 3,337,360 68,791 24,574 2,048 716.74 160,000 240,000

Terengganu 1,144,440 19,627 22,733 1,894 663.05 145,000 217,500

Perak 2,396,960 39,627 20,569 1,714 599.93 135,000 202,500

Sabah 3,437,360 44,434 19,010 1,584 554.46 125,000 187,500

Perlis 208,080 3,535 18,119 1,510 528.47 120,000 180,000

Kedah 2,080,800 25,307 15,814 1,318 461.24 105,000 157,500

Kelantan 1,654,640 13,461 10,617 885 309.66 70,000 105,000

2012 PER CAPITA INCOME STATISTICS

Affordable House value (30 yrs

loan @ BLR-2.3 4.4%)

35% of

monthly

income = Loan

repayment

State by

state (est)

Population

in 2012

State

GDP 2012 @

const prices

GDP 2012 per Capita at

current prices


Yearly Monthly Per capita Per household

RM RM RM RM RM

Kuala Lumpur 1,718,680 73,931 6,161 2,156.32 480,000 720,000

Pulau Pinang 1,654,640 37,006 3,084 1,079.34 240,000 360,000

Selangor 5,626,240 36,135 3,011 1,053.94 240,000 360,000

Malacca 832,320 33,550 2,796 978.54 220,000 330,000

Negeri Sembilan 1,040,400 32,511 2,709 948.24 220,000 330,000

Johor 3,337,360 24,574 2,048 716.74 160,000 240,000

Sabah 3,437,360 19,010 1,584 554.46 125,000 187,500

PER STATE AFFORDABILITY VALUES 2012

State

State by

state (est)

Population

in 2012

GDP 2012 per Capita at

current prices

35% of

monthly

income = Loan

repayment

Affordable House value (30 yrs

loan @ BLR-2.3 4.4%)

MALAYSIAN PROPERTY MARKET SUSTAINABILITY

House - Income trend 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

House price index 100.0 101.1 103.5 107.5 112.4 115.0 117.2 123.1 128.6 130.5 138.8 151.2 167.2 178.4

Income statistics 213.0 232.1 238.2 244.2 250.0 260.8 271.5 282.2 294.6 307.0 330.0 352.9 375.8

How House Price Index and Per Capita income index are strictly correlated, what is this comparison showing?

House price index +67%

Median income +175%

MALAYSIAN PROPERTY MARKET SUSTAINABILITY DEMAND AND SUPPLY: MATCHING OR MISMATCHING?

HOUSING EXISTING STOCK AND FUTURE SUPPLY

STATE

SUPPLY OF

LANDED TILL

2020

SUPPLY OF

LOW COST

TILL 2020

LOW COST ON

POPULATION

%

SUPPLY OF

HIGH RISE TILL

2020

TOTAL HOUSES

SUPPLY BY

2020

POPULATION

BY 2020

NEED OF

HOUSES BY

2020

KUALA LUMPUR 113,318 156,915 8.39% 247,843 518,076 1,870,000 105,257

SELANGOR 859,609 493,772 7.86% 347,133 1,700,514 6,279,686 392,715

JOHOR 686,277 262,283 5.83% 129,310 1,077,870 4,499,432 421,941

PENANG 222,425 230,474 14.11% 96,451 549,350 1,633,703 64,782

MALACCA 149,295 50,516 5.52% 17,828 217,639 914,506 87,196

NEGERI SEMBILAN 262,639 82,018 6.43% 44,486 389,143 1,276,244 36,272

PAHANG 238,572 67,669 4.04% 16,302 322,543 1,674,660 235,677

PERAK 394,091 95,430 3.83% 14,073 503,594 2,494,237 327,818

PERLIS 19,619 9,303 3.82% 1,242 30,164 243,400 30,686

KELANTAN 69,622 15,644 1.02% 4,790 90,056 1,533,613 421,148

TERENGGANU 94,969 39,193 3.75% 1,026 135,188 1,045,864 213,433

KEDAH 249,768 113,925 5.85% 3,057 366,750 1,947,472 282,407

SABAH 101,155 63,110 1.83% 50,645 214,910 3,443,107 473,711

SARAWAK 196,291 52,320 2.06% 18,581 267,192 2,543,759 241,560

GRAND TOTAL FOR

MALAYSIA3,657,650 1,732,572 5.52% 992,767 6,382,989 31,399,685 3,334,605

EXISTING STOCK 2013 AND HOUSE SUPPLY TILL 2020

HOUSING SUPPLY KEEPS ON SLOWYING DOWN

MALAYSIA AND THE REGION: WHERE ARE WE?

Ranking Country RM/psfHouse of

1,000 Sq.Ft.

GDP Per

capita

(PPP) USD

GDP Per

capita

(PPP) RM

Property

value to

income ratio

1 Hong Kong 3,124.59 3,124,590.30 44,770 143,264 21.81

2 Singapore 2,684.31 2,684,310.67 53,266 170,451 15.75

3 Australia 1,345.25 1,345,254.55 35,668 114,138 11.79

4 Japan 1,266.79 1,266,794.87 31,425 100,560 12.60

5 South Korea 950.93 950,925.31 27,990 89,568 10.62

6 Taiwan 911.38 911,379.60 33,608 107,546 8.47

7 Brunei 847.36 847,359.72 45,978 147,130 5.76

8 China 794.82 794,817.91 7,957 25,462 31.22

9 Thailand 451.83 451,829.25 8,458 27,066 16.69

10 Myanmar 414.39 414,385.92 1,324 4,237 97.81

11 Malaysia 367.42 367,418.25 17,046 54,546 6.74

12 Philippines 285.84 285,838.91 3,802 12,166 23.49

13 Vietnam 241.09 241,086.96 3,133 10,026 24.05

14 Cambodia 212.31 212,310.48 2,149 6,877 30.87

15 Indonesia 207.62 207,621.70 4,271 13,667 15.19

16 Laos 79.72 79,721.29 2,521 8,067 9.88

Source: IMF - World Bank - CIA

Average price of property per country 2012 - SEA REGION Property value

to income per capita (PPP) ratio

MALAYSIA AND THE REGION: WHERE ARE WE?

Ranking Country RM/psfHouse of

1,000 Sq.Ft.

GDP Per

capita

(PPP) RM

Property

value to

income ratio

10 Myanmar 414.39 414,385.92 4,237 97.81

8 China 794.82 794,817.91 25,462 31.22

14 Cambodia 212.31 212,310.48 6,877 30.87

13 Vietnam 241.09 241,086.96 10,026 24.05

12 Philippines 285.84 285,838.91 12,166 23.49

1 Hong Kong 3,124.59 3,124,590.30 143,264 21.81

9 Thailand 451.83 451,829.25 27,066 16.69

2 Singapore 2,684.31 2,684,310.67 170,451 15.75

15 Indonesia 207.62 207,621.70 13,667 15.19

4 Japan 1,266.79 1,266,794.87 100,560 12.60

3 Australia 1,345.25 1,345,254.55 114,138 11.79

5 South Korea 950.93 950,925.31 89,568 10.62

16 Laos 79.72 79,721.29 8,067 9.88

6 Taiwan 911.38 911,379.60 107,546 8.47

11 Malaysia 367.42 367,418.25 54,546 6.74

7 Brunei 847.36 847,359.72 147,130 5.76

Average price of property per country 2012 - SEA REGION

Property value to income per capita (PPP) ratio

Source: IMF - World Bank - CIA


Kuantan: the new commercial port, the

already committed investment from

Chinese, European and American

Multinational Corporation

Kota Baru: the Northern Educational

Hub with 15 Local and International

Universities already working to

establish a northern campus

Penang: the 8th destination

worldwide to retire.

Ipoh: retirement homes

and health tourism

Klang Valley: the Northern,

Southern and Western

Corridor and the Megaprojects

Iskandar Malaysia: the most Strategically

Sustainable Location in the region (SEA)

MALAYSIAN PROPERTY MARKET

RESIDENTIAL

CLASS OF VALUEQ1 2013 Q4 2013 Q1 2014

RM0 TO

RM100,0007,330 9,100 56,400

RM100,001 TO

RM300,000213,680 219,010 281,390

RM300,001 TO

RM500,000454,100 493,930 347,300

RM500,001 TO

RM1,000,000445,890 553,110 534,110

RM1,000,001

AND ABOVE425,140 764,180 663,920

TOTAL 1,546,140 2,039,330 1,883,120

RESIDENTIAL TRANSACTION IN PENANG

Q1 AND Q4 2013 / Q1 2014

MALAYSIAN PROPERTY MARKET

PERAK

The Raise of Ipoh

- Ipoh: the healthier city of Malaysia with lakes, mountains, rivers

and hot-springs which give high breathability through daylong

breezes

- Ipoh: ranked 6th less expensive destination worldwide for

retirement living (expatriates ranking)

- Ipoh: local Government and Private Operators to profitably tap into

Visit Malaysia year 2014 and Year of Festival 2015

- Ipoh: conveniently located and easily accessible within 2 hours from

Kuala Lumpur and Penang

PERAK & IPOH: FACT FILE

Perak is the 4th State of Malaysia by size 21,022 km2 or 10 times

the size of Iskandar Malaysia

Perak is the 7th State of Malaysia by GDP Contribution 5.3%

Perak/Ipoh: 2013 residential properties saw a 11.5% increase

Perak is the 5th State of Malaysia by Population – 2.4 Mil or 9% of

the Malaysian population. Metro Ipoh counts 1.6 mil habitants

PERAK & IPOH: HIGHLY SUSTAINABLE MARKET

Status Landed Low cost High-rise

2014 Existing stock 150,637 44,715 2,580

Completion 3,450 - 182

Incoming Supply 10,666 3,564 669

Starts 4,105 - 322

Planned Supply 9,102 122 846

New Planned Supply 3,950 - 762

19,209

2013

235,672

Total

197,932

18,531 2016

2020

IPOH TOTAL HOUSES BY 2020

PERAK & IPOH: HIGHLY SUSTAINABLE MARKET

ESTIMATE NEED OF HOUSES

(4 MEMBERS PER HOUSEHOLD)

1,688,911

422,228

186,556

CURRENT DEMAND OF HOMES


TOTAL IPOH POPULATION AS AT 2015

(Est +1.2% yr)

DEMAND OF HOMES BY 2015


(4 MEMBERS PER HOUSEHOLD)

TOTAL IPOH POPULATION AS AT 2020

(Est +1.2% yr)

DEMAND OF HOMES BY 2020

TOTAL IPOH POPULATION AS AT 2012 1,535,192

383,798

185,866

1,591,125

397,781

181,318

NEW INFRASTRUCTURE WITH BUDGET 2014: WEST-COAST HIGHWAY

West Coast Expressway Banting-Taiping 250 km

West-coast highway

NEW INFRASTRUCTURE WITH BUDGET 2014: WEST-COAST HIGHWAY

ISKANDAR MALAYSIA: STRATEGICALLY SUSTAINABLE LOCATION

Committed Investment Achievements


Economic Development has been given the priority.

As at December 2013 out of the RM130 billions of committed

investment IRDA has achieved RM133 billions of which 45% is realized.


Offer of Affordable Houses Far Behind Demand

Iskandar Malaysia is one of the

Malaysian States where the

demand of houses with values

between RM250 and RM600 psf

is still mostly unsatisfied

Offer of Affordable Houses Far Behind Demand


KL – GREATER KL – KLANG VALLEY … 2020 AND BEYOND

Klang Valley 1990 Klang Valley 2012

Klang Valley: 7,800,000 population Hong Kong: 7,200,000 population

Just a consideration on ho┘ Greater KL should e┗ol┗e…

Klang Valley view from 130 km Hong Kong view from 130 km

KL – GREATER KL – KLANG VALLEY … AND BEYOND

Greater KL will reach 10 million people (Mega City) by 2020 Singapore aspires to have 6.9 million by 2030 Iskandar Malaysia aim to have 3 million by 2025


KL – GREATER KL – KLANG VALLEY … AND BEYOND

KLANG VALLEY AND THE SOUTHERN CORRIDOR

HOUSING: CURRENT AND FUTURE DEMAND

ESTIMATE IN KUALA LUMPUR/KLANG VALLEY

TRX

KL METROPOLIS

Bukit Bintang City

Centre – Ex Pudu Jail

City of Malaysia

KL Central

KL Eco City

WARISAN MERDEKA

KL – GREATER KL – KLANG VALLEY … AND OFFICE SPACE

IN ONLY 4 KM RADIUS

GREATER KL, KLANG VALLEY AND

THE FUTURE OF COMMERCIAL PROPERTIES

MALAYSIA’S PROPERTY MARKET MOST EXCITING LOCATION

Malaysian Property Market – 2014 Outlook

Iskandar Malaysia – Strategically Sustainable


Iskandar Malaysia Sustainability


Iskandar Malaysia – Committed investment


Iskandar Malaysia – Local or Foreigner


Iskandar Malaysia – Committed only?


Iskandar Malaysia – Who committed?


Iskandar Malaysia


Iskandar Malaysia Sustainability

Thank you

For questions please email to:

[email protected]

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Daniele Gambero

mailto:[email protected]

of a sustainable market, the new growth areas for … · of a sustainable market, the new growth...

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