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INSIGHTS | Prodding the Property Bubble PRODDING THE PROPERTY BUBBLE There has long been talk of the proverbial bubble bursting. Will 2015 be the year it pops - By RYAN KHOO Predicting property cycles has always been a popular past time whether you are an experienced investor, a first-time homebuyer or the taxi uncle who is always ready with a word of advice for his passengers. When I first started investing in 2007, there was always at least one person in the crowd or discussion who would be prophesising the ‘bursting of the property bubble’ as if it was the inevitable end of the world (or the beginning of the bargaining process depending on how you look at it). In fact, everyone who has been predicting the deflation of Malaysian property prices since that time has gotten it wrong and is thoroughly embarrassed. Furthermore, property prices in the country have skyrocketed in the past five years and many a fortune has been made. With 2015 around the corner, all the talk of bubbles bursting has gotten louder and more prominent. New prophets of doom have emerged and old ones have returned in new guises with new reasons to justify a coming property bust… and yes, there is good reason to worry. I would not go so far to say that there is a bubble and that it will burst, but let us examine the cases for and against property prices deflating or staying on its upward course. REASONS WHY PROPERTY PRICES WILL CONTINUE TO CLIMB 1) Malaysia’s economic growth is actually pretty good. Yes, I know that I will be hounded for making this statement but a GDP (gross domestic product) growth of 6% upwards in 2014 is actually quite high if you compare it to the GDPs “ We have a young nation with a median age of about 28 years old. This basically means that the demand to buy property is strong. ” 26 |
people to major cities such as Kuala Lumpur, Penang and Iskandar looking for jobs which creates further demand for homes in these locations. Additionally, as the economy grows, demand for property can only intensify. This creates a baseline for property demand and the fact that the industry is very local demand-oriented is why Malaysia has never really experienced a serious property slump. 3) There is simply too much money in the world right now. While the US Federal Reserve has stopped its money printing (quantitative easing), the European countries and Japan are now increasing theirs. The European Central Bank is also currently in a negative interest rates mode which refers to when you go to the bank to deposit money and the bank actually charges you interest instead of paying it to you. That is how bad it is in Europe; the government wants to ‘give you’ money and spend/invest it so that the economy keeps moving. of other countries. The average man on the street has yet to feel an increase in his income and the Gini coefficient (wealth difference between the rich and poor) still leaves much to be desired but there is money being made in Malaysia right now; the only question is whether it has flowed into your pockets or not. My personal belief is that when the Goods and Services Tax (GST) kicks in come April 2015 and we start to see the effects of inflation, the working class will start to demand higher salaries and employers will have no choice but to pay more since it is difficult to replace talent in Malaysia. Countries such as Singapore and Australia experienced this trend when their GSTs became effective, so my view is that Malaysians will see an increase in income in 2015 and beyond which will keep our economy chugging along. 2) The current population demographics point to strong demand. We have a young nation with a median age of about 28 years old. This basically means that the demand to buy property is strong. Everybody here wants to own a property and the question is whether they can find one they like which they can afford. There is also a strong rural-urban migration of | 27
Page 4: EDITOR ROSHAN KAUR SANDHU WRITERS O
Page 8: CONTENTS January 2015 Investment Ti
Page 12: HAPPENINGS Sunway Adds Education to
Page 15 and 16: Distinguished guests give the PCA a
Page 17 and 18: Best Commercial Development - Mah S
Page 19 and 20: one-stop shopping haven, the mall w
Page 21 and 22: 4 5 6 | 19
Page 23 and 24: | 21 1
Page 25 and 26: 2 PROJECT NAME: M Residence Canal L
Page 27: ABSOLUTE RELAXATION The Skies Villa
Page 31 and 32: them to gain financially from the i
Page 33 and 34: When talking to Chris, he made one
Page 35 and 36: logic is that the government is now
Page 37 and 38: want homes where the smell of paint
Page 40: CALLING ALL HOME OWNERS! Has Everyt
Page 44 and 45: PICK OF THE MONTH | The Next Nucleu
Page 46 and 47: EXPERTS’ VIEWS | Greatness or a G
Page 56 and 57: MARKET INSIGHT | Growing Trends: Pr
Page 58 and 59: MARKET INSIGHT | Growing Trends: Pr
Page 60 and 61: LET’S TALK | Perbadanan PR1MA Mal
Page 66 and 67: Property Investment Data | Oregeon
Page 72 and 73: HAPPENINGS Property Market Sees an
Page 74 and 75: SINGAPORE | Awards 72 |
Page 76 and 77: SINGAPORE | Investing in Asia INVES
Page 78 and 79:
MARKET OUTLOOK | Singapore Property
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INTERNATIONAL PROPERTY INVESTMENT |
Page 82 and 83:
INTERNATIONAL PROPERTY INVESTMENT |
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CONTRIBUTOR | HBA ENFORCEMENT UNDER
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CONTRIBUTOR | HBA person who had po
Page 88 and 89:
CONTRIBUTOR | Dato’ Joey Yap THE
Page 90 and 91:
CONTRIBUTOR | Dato’ Joey Yap PIG
Page 92 and 93:
CONTRIBUTOR | Dato’ Joey Yap RABB
Page 94 and 95:
OFFICE DESIGN | Suites for Every Ta
Page 96 and 97:
TIPS & TRICKS | Simply Green SIMPLY
Page 103:
Outside Klang Valley | LATEST DEVEL
Page 107 and 108:
CLASSIFIEDS SECTION PROPERTY BELOW
Page 109 and 110:
CLASSIFIEDS SECTION Bukit Jalil, La
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CLASSIFIEDS SECTION City Centre, Se
Page 113 and 114:
CLASSIFIEDS SECTION Kenny Hills, Ti
Page 115 and 116:
CLASSIFIEDS SECTION Petaling Jaya,
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CLASSIFIEDS SECTION Sungai Besi, Th
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CLASSIFIEDS SECTION PROPERTY OUTSID
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CLASSIFIEDS SECTION Johor Bahru, TA
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