Urbanisation will drive population changes. Population changes will drive property demand.

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There are reasons why most of our graduates flock to the bigger cities after they have graduated. There are more job choices. Beyond choices, there are more opportunities to grow in their careers because there are more companies, more MNCs with their offices in major cities. SMEs which are thinking of higher business volumes will also be opening up in the city centres first. From car workshops to printing businesses and even just selling nasi lemak by the road side. There are by far more people walking past their stalls in the city.

This is why when we look at property demand, it will usually be the highest in bigger cities. Not necessarily for new homes but I remember when the three main colleges in Subang Jaya welcomed thousands of new students in 1994, the demand for rooms suddenly grew. Many landed home owners become rich fast within a few years… Imagine a corner unit being renovated into a home of 6 rooms and 3 students to a room? Each paying RM250 meant RM750 per room or RM750 x 6 rooms which is RM4,500 per month. Yea, one one of those students was me and the three colleges then were Taylor’s, INTI and Metropolitan College. I was enrolled into INTI College then.

Which city has a higher population in Malaysia? Here’s one image showing the population from worldpopulationreview.com (click to read more) I think the data is quite recent. Now we may understand why the property prices in Kuala Lumpur is leading all the other cities yeah. The demand is high. In fact look closely and we will realise that within this list of top 10, there are already 6 within the Greater Kuala Lumpur yeah. Hint… Hint…

Source: http://worldpopulationreview.com/countries/malaysia-population/

Will property demand in smaller towns increase? The answer is yes but it will not be like the cities in terms of quantity and even choices. Will there be an oversupply of units then? Actually, an oversupply situation can happen anywhere. Lower demand simply meant less developers will be building while more demand may also meant an overbuilding of properties too. That’s when mismatch in property demand and supply may happen and suddenly we have the current overhang situation. Happy understanding yeah.

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Next suggested article: Overhang units. Most units are really not that affordable

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