40 years later – Malaysia property market in my personal view

This article was rewritten and published in the showguide of MAPEX JB 2014.

A reader of kopiandproperty.com asked me for my views on the Malaysian property market 40 years from now. A very interesting question indeed. Unfortunately, I do not have a crystal ball to allow me a glance into the future. However, based on some readings as well as own observation, let me share my personal views about the Malaysian property market 40 years later.
We focus on three prominent studies and one very casual observation.
Size of economy.
If we look at the current property market for Malaysia, the demand apart from some areas in Iskandar are all due to local demand. What if I tell you that in around 40 years, Malaysia’s economy would grow 800% and the per capita income would grow 559%? Total population would be 40 million. HSBC published a study on which economies they think will be top 30 in the world by 2050. Their report is based on a host of statistics and of course projections. I do believe this study is grounded on real numbers and was not done by one researcher who searched online data from google or wiki. 🙂  A brief economic league table by HSBC can be viewed below.
Source: http://www.businessinsider.com/these-economies-will-dominate-the-world-in-2050-2012-1?IR=T
Competitiveness.
Supporting HSBC’s earlier projections, we can refer to IMD’s Competitiveness Study which is one of the most authoritative study on nation’s competitiveness. The latest showed Malaysia ranked at top 15 in the world. This is a ranking which money cannot buy and we are not talking about some international rating agencies which gives different ratings to different countries based on what they ‘think’ and not what the numbers really say.
Source: http://www.imd.org/news/World-Competitiveness-2013.cfm
 
 
 
 
 
Current demographics profile 2013
Next, we look at the Malaysian demographics profile today. Look at the first highlight. Nearly 50% of the population are aged between 0-24 years old today. Imagine a country where 50% of the population are between 0-24 years old today. The demand for new housing would come this group of population. Current property market is also well supported because of the current 41% of the population who are aged 25-54 years old. Those who are 54 years old are fathers who are helping their children buy their first home as well as those with few years of working experience buying their first affordable property.
 
Baby shops
Last point is an easy observation. I remembered when I started working in 1998, there were many IT shops in departmental stores. Today, a new type of shop emerges, not just within the departmental stores but basically mushrooming everywhere! Baby shops. There are easily a dozen shops selling baby products in any departmental stores that you go and have you ever notice an empty shop? If you think PC Fairs are crowded, it means you have never been to Baby Warehouse sales before. Look at the area allocated only for baby products today. Look at the never ending current brands and new brands coming up for milk powders, for baby wipes and even baby crackers. These babies would eventually grow up and when their parents were about to retire, they would enter the job market and the cycle of property buying continues.
These are the four reasons why I believe property market in Malaysia would continue to prosper. These are also the reasons why I continue to view properties and continue to read even more about the Malaysian property market. Happy viewing and buying.
Charles Tan
http://www.kopiandproperty.com