Q1. With several mega projects such as the MRT and the 100-storey Warisan Merdeka due to commence this year, how would this affect the property market specifically in the Klang Valley?

These initiatives are clear signals that the Malaysian government has long-term plans to transform Klang Valley into the next Kuala Lumpur. Increased accessibility and another iconic skyscraper – parodying the Petronas Twin Towers - are evidence of a metropolitan emergence. The picture looks promising for the property market in Klang but it’s still too early to tell. From an investor’s point of view, the government has its work cut out to convince us of the area’s business potential. We don’t want to have a situation where we have an oversupply of vacant spaces.

Q2: How do you think the coming elections would impact the Malaysian property market this year?

The coming elections will be a major test of unity within the current ruling Barisan National (BN) party. A strong showing of rapport will help deter any form of widespread “panic” which would inevitably lead to undesired speculation in the property market. We don’t want to replicate the situation where internal disputes caused the BN dearly.

Q3: What are the factors that could potentially derail the Malaysian property market this year?

There is a danger that current inflationary prices in Hong Kong and Singapore might cause property investors to flock to Malaysia. In fact, there is a high possibility that it will happen given its relatively low prices.

Q4: What do you think is the cause of the lack of “bubble” in the Malaysian property market while its surrounding neighbours such as Singapore and even Thailand experience property bubbles?

Both Singapore and Thailand have unique positioning of its markets. Singapore is Southeast Asia’s financial hub, equipped with sound policy and infrastructure to support investor interests. Thailand’s tourist-friendly economy caters to high net-worth individuals who seek a work-life balance. As such, complementing residential developments have sprout up to meet these demands. For example, there has been an increase in the number of luxury apartments sprouting up in Singapore, while Thailand on the other hand, has seen a rise in the number of private home villas within popular tourist hotspots like Phuket. Until Malaysia’s new Economic Transformation Programme (ETP) was announced, there were little clear determinants to credibly make the country more attractive than its neighbouring counterparts.

Q5: Do you see hot money coming into the Malaysian property market this year? If yes, where are they from and which types of properties are they going for?

Definitely. There is a growing class of affluent middle-aged adults who have the financial capital to live independently – away from their families. The current high ratio of 6.5 people per housing unit is a statistic that reeks of an untapped market.

Q6: Where do you think are the potential property hot spots in Malaysia?

Most of our investment portfolio is still very much centred within Kuala Kumpur.  All eyes are now on Klang Valley.

Q7: What is your opinion of the Iskandar Economic Region?

I think it looks promising. Given the extent of plans put in place, there is no doubt that a lot of thought went into it. What needs to be done now is to ensure that measures are taken to keep the region sustainable once it fully opens. If that can be done, the Iskandar Economic Region will undoubtedly pose serious competition to neighbouring Singapore. 
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Q8: What measures could the Malaysian government take to attract more foreign investors into our property market?

• Inflation figures should be kept in check
• Infrastructure expansion to increase accessibility in suburban areas
• Laws that protect property owners should be strictly adhered to and enforced fairly.

Q9: What steps should Penang Island take in order for its development to be sustainable over the long-term?

Penang Island needs to gradually move away from a manufacturing-driven economy to a more services-oriented one. In my opinion, banking and tourism should be the new focus.

Q10: Should Malaysian developers switch to Build-Then Sell (BTS) concept instead of the present system where buyers finance the construction of the properties?

At a modest 5.3% price growth per annum, Malaysian developers might run the risk of having to reduce their prices under a BTS scheme if units don’t sell as quickly as they expect them to. Pre-construction financing is safer, it stimulates demand, and provides a preemptive risk filter for potential mortgage defaults.

Q11: Do you think interest rates will go up this year?

The Klang Valley injection and Iskandar Economic Region will churn billions in the construction industry. Given that these are state driven initiatives, interest rates will remain low to encourage the much needed lending capital for banks to offer building loans to construction-related firms.

Q12: What are the usual complaints by foreign investors about the Malaysian property market?

The past few years have seen near stagnant or sluggish growth in the Malaysian property market which has been relatively unattractive compared with other markets in the region.