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Population Malaysia. 32.4 million. 1.7% CAGR. High or Low?

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Population Malaysia. 32.4 million. 1.7% CAGR. High or Low?

Population growth will propel economic growth

When a country has a growing population, the demand for goods and services will rise with every passing year. With more new babies come the need for baby products. If these are supplied by domestic manufacturers, then they will need to hire more people. With more people with salaries, then there would be demand for other goods and services too such as property. The cycle continues.

If the population is decreasing every year, the demand for goods and services continue to decrease every year. Due to this, businesses would start to face a fall in revenue. With the fall in revenue, it is likely that there would be fewer jobs available. Economic growth is thus likely to be slower unless the economy is very export reliant and the country has a huge trading surplus every year.

Article in themalaysianreserve.com Prime Minister Datuk Seri Ismail Sabri Yaakob said the country’s population registered a Compound Annual Growth Rate (CAGR) of 1.7% over a 10-year period as compared to 2.2% a year between 2000 and 2010.

The urbanisation rate in Malaysia increased to 75.1% (24.3 million persons) in 2020 as compared to 70.9% (19.5 million persons) in 2010. Meanwhile, the population of rural areas declined to 24.9% in 2020 as compared to 29.1% in 2010.

Kuala Lumpur and Putrajaya have 100% of the population living in urban areas. Besides that, Selangor was the state with the highest composition of urban population at 95.8% (2010: 91.3%), followed by Pulau Pinang 92.5% (2010: 90.7%) and Melaka 90.9% (2010: 86.5%). Do read the full article here: Article in themalaysianreserve.com

How many is 1.7% growth per year anyway?

Malaysia has 32.4 milion population (MyCensus 2020) and a compounded annual growth rate (CAGR) of just 1.7%. Briefly, in calculation this is 32.4 million x 1.7% = 550,800 new population every year. That’s considered okay, right? I mean, even if 5 to a home, we still need a minimum of 100,000 new homes yearly 20 years later just to cater to this new population yeah. If we think only 4 to a home, then it will be 115,000 new homes needed 20 years later.

Maybe the new population in the future does not need a home? Perhaps they need just a room? Well, if they stay single longer, perhaps just a room may be sufficient. Just need to remember if demand for rooms move up, it will still drive the demand for homes from investors who will be renting the rooms out. One will be subsidised by the other. Need to decide which side we want to be on.

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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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