Malaysia Property Market Outlook 2011 and beyond

The big picture

http://hubpages.com/hub/Malaysia-Political-and-Economic-for-2011-and-Beyond

some good links for us to read and understand better our Malaysia market outlook

http://www.alantanblog.com/property/why-properties-price-would-not-drop.html

http://www.alantanblog.com/property/property-market-outlook-for-2010-for-malaysia.html

http://biz.thestar.com.my/news/story.asp?file=/2010/2/17/business/5559315&sec=business

http://www.rehda.com/bulletin/10/bulletin-1007.pdf

http://www.rehda.com/resources/misc/MH%203.pdf page 11

http://turtleinvestor888.blogspot.com/2010/09/commentary-on-osk-research-property.html

http://www.fdic.gov/regulations/laws/federal/2007/07c04test1ag.pdf

http://www.horlic.com/understanding-property-market-cycle-first-before-analyze-the-indicators-to-buy-sell-or-hold/

http://www.greenenergyinvestors.com/lofiversion/index.php/t7430.html

http://www.theedgemalaysia.com/in-the-financial-daily/174647-4q-market-outlook-be-vigilant-analysts-say.html

Catalyst for property price appreciation at todays’ prices:-

–Cost push factors; price increase due to inflationary pressure, material cost increase, increase in utilities charges, contribution, green legislation and crude oil prices, removal of subsidies

–Healthy liquidity in the banking system

–Reasonable mortgage rates currently at historical low fueling buying appetite

–Higher land prices due to depleting land bank that is well serviced

–Political stability and good governance

–Rapid improvement in income (USD 7,000 in 2010 to USD 15,000 in 2020)

–Continuous population growth

–Urbanization

–Inflow of migration through talent recruitment and residency status

–Affluence and higher expectations by younger populace demanding better property and lifestyle product

–Governments’ accommodative policies and favorable incentives to stimulate market (MM2H, Iskandar Region’s special status, RPGT, etc)

–Holding power is key to capital gains and right leverage can result in attractive recurring income with positive carry over borrowing rates.

36

•Key Risks to derailment of property price appreciation:-

–Political instability

–Supply much greater than demand

–Prolong and protracted economic downturn in developed economies.

–Protracted low mortgage rate that promotes unhealthy speculation

–Mass Migration (both quantity and quality of migrants) that lead to vacancies and mass disposal of properties

–Credit tightening and more stringent vetting by banks

–Unfavorable government legislation and inconsistent policies

–Ageing population

–Wrong product, wrong pricing, wrong location and wrong timing of property launches

–Accept that property cycle goes through a 7-10 year cycle of ups and downs but be comforted that unlike stocks/shares/commodities/derivatives, value do not evaporate overnight!