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200,000 new marriages, 80,000 new properties

Yes, in Malaysia, on a yearly basis there are 200,000 new marriages every year. There are also a total of 80,000 new properties being built on a yearly basis. This information is from Mah Sing’s group Managing Director Tan Sri Leong Hoy Kum. He said due to this, there would always be shortages of sufficient supply of properties. Thus he believes the group would be able to replicate its amazing 2014 sales in 2015. In fact he expected net profit would grow 18% year on year in 2015. Mah Sing is also shifting its focus to affordability, just like many other developers and thus nearly half or 44% of all its properties would be below RM500,000. The take up rate despite the upcoming GST remains at 75% which meant that break-even stage has been exceeded. In fact he said GST will not be a big issue and the adjustment period should take just 3 months.
After reading through all these encouraging information from Tan Sri, what do you think of the property market in 2015? Of course, not all developers are as positive as Mah Sing. Remember last year REHDA members said that the negative sentiment would persist into 2015? Read here: Properties in 2015? Tough times. However, when we look at the overall market it is very clear that affordability is a very important factor which can continue to drive demand. The founder of penangpropertytalk.com, Ken told me that affordability is a very popular subject and every time he publishes any of such related articles, the response is very encouraging. I just visited Quill City Mall few days ago and the baby room inside AEON’s baby department is simply amazing. Think objectively, if this group is not the main target, why spend so much effort for the baby room? If this group is the main target, it brought us back to the number of marriages in the first sentence. Yes, the family formation is also increasing tremendously and not just the number of marriages. Thus, smaller properties of below 1,000 sf all the way to bigger sized condos or even landed ones would continue to be in demand.
Yes, it’s also possible that Tan Sri may just be too optimistic but Mah Sing is a listed entity. Its result has to be announced and would be easy for all to see and if majority of what he said did not come true, what do you think would happen to Mah Sing’s share prices? Now, what happens if you think he is telling the truth and you are not ready to buy their properties? Easy. Buy some of their stocks and keep for the next few years. According to The Edge, the top pick for 12 stockbroking firms in town is Mah Sing. Prices? Please refer online and kindly do a bit more homework than believing everything that is written. Pretty easy, just google for ‘Mah Sing, target price’ or other keywords to read more. Happy reading and learning.
written on 4 Feb 2015
Next suggested article: Cost of Land increasing vs GDV

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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    1. On 6th Jan 2015, just for fun, I bought 1,000 units of Mah Sing and Eco World. Yes, only 1,000 units of each. Have since sold Eco World for a good profit. Enough profits for one concert plus 2 nights stay at First World Hotel. Once Mah Sing can give me the same profit, will sell too. Maybe 11 months later? Maybe.

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