Property Market Review 2018 / 2019 Contents
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PROPERTY MARKET REVIEW 2018 / 2019 CONTENTS Foreword Property Northern 02 04 Market 07 Region Snapshot Central Southern East Coast 31 Region 57 Region 75 Region East Malaysia The Year Glossary 99 Region 115 Ahead 117 This publication is prepared by Rahim & Co Research for information only. It highlights only selected projects as examples in order to provide a general overview of property market trends. Whilst reasonable care has been exercised in preparing this document, it is subject to change without notice. Interested parties should not rely on the statements or representations made in this document but must satisfy themselves through their own investigation or otherwise as to the accuracy. This publication may not be reproduced in any form or in any manner, in part or as a whole, without writen permission from the publisher, Rahim & Co Research. The publisher accepts no responsibility or liability as to its accuracy or to any party for reliance on the contents of this publication. 2 FOREWORD by Tan Sri Dato’ (Dr) Abdul Rahim Abdul Rahman 2018 has been an eventful year for all Malaysians, as Speed Rail) project. This move was lauded by the World witnessed by Pakatan Harapan’s historical win in the 14th Bank, who is expecting Malaysia’s economy to expand at General Election. The word “Hope”, or in the parlance of 4.7% in 2019 and 4.6% in 2020 – a slower growth rate in the younger generation – “#Hope”, could well just be the the short term as a trade-off for greater stability ahead, theme to aptly define and summarize the current year and as the nation addresses its public sector debt and source possibly the year ahead. for alternatives to its over-reliance on oil-related revenue. Coincidentally, Malaysia held on to the No. 1 spot in a The theme “Hope” resonates not only amongst Malaysians recent survey by Bloomberg, ranking ahead of other but also amongst the world’s stakeholders at large, amidst emerging markets such as Russia, China and Philippines the various challenges and uncertainties that lie ahead in terms of growth prospects, state of current account, in the yonder; be it economically, socially, politically or sovereign credit ratings and asset valuations. This is in even environmentally. For example, the on-going trade war spite of the almost 25% drop in oil price from January’s between the US and China, further monetary tightening USD60 to December’s USD46 per barrel, and the fact that measures from central banks in the developed nations the KLCI has retreated to the level of 1,700s as compared and the repercussions from climate change are but just to the 1,800s earlier in 2018. a few of the headline issues that are creating these risks – hence the “hope” for a beter change ahead. As evidence of recovery being much underway, latest JPPH statistics have revealed 1H 2018 to have a lower decline On the local front, the current Malaysian government than 1H 2017, with only experiencing a much smaller drop intends to build up its fiscal buffers and reserves in of 2.4% in transaction volume and 0.1% in transaction value; anticipation of further market volatility ahead, as seen by transaction activities as at 1H 2018 coming up at 149,889 the postponement of mega projects such as the ECRL transactions worth RM67.74 billion. Looking three years (East Coast Rail Line) and the KL-Singapore HSR (High back, the falling trend has significantly sofened since the 2018 PROPERTY MARKET REVIEW 2019 3 We foresee 2019 to be a year for further establishment and execution of improvements to the country’s market. period of 1H 2015/1H 2016 where percentage in drop was as Being less than a year old, our new government is still in high as 12% to 16% in both volume and value. This bodes the works of establishing itself as the new ruling party well for 2019 to possibly produce positive movements for and with new leaders comes new ideas and practices. We a change – albeit being insignificant. saw big decisions made on major development projects justified to the cost against Malaysia’s critical financial With technology making headway every minute of every status as claimed by the Ministry of Finance. Budget day, industries continue to experience the digitalization 2019 showed maters of the property market is of great of operations and services provided, having to adopt priority to Malaysia’s new government, as can be seen and adapt to new ways and product offerings. The by the various initiatives in improving Malaysia’s living sharing economy has greatly expanded to various points standards and conditions, such as the highly anticipated of everyday living and business-making. Airbnb had New Housing Policy (NHP) 2.0. stated Malaysia to be one of the fastest growing Airbnb community in South-East Asia and as at 2018, there are over The recent stimulus measures in the form of selected 44,000 property listings in Malaysia – an impressive 99% exemptions on RPGT and the introduction of crowdfunding growth from 2017. Not only home-sharing, office-sharing schemes such as FundMyHome are in juxtaposition has also been striving into the scene with companies with the broader consolidative strategies highlighted such as WeWork, Regus, Colony and Common Ground earlier. In our opinion these strategies are necessary stamping their footprint in not only Klang Valley, but in to curb the nation’s property overhang scenario while other major states as well. This growing trend of product increasing home ownership rate; and we believe that the offering reflects on the evolution of living and business current government will continue to implement proactive culture that the world is currently experiencing. Adding measures as and when necessary to ensure that the in more and more injections of Artificial Intelligence (AI) nation’s wellbeing is taken care of. and automated machinery, how we work, live and play has differentiated itself from even a decade back. Though the expectation of 2018 to take a positive turn up was not met, there are signs of it to happen soon Though technologies continue to advance further and as recovery pace was seen to be more robust. We further, the property market is still in its effort to adjust foresee 2019 to be a year for further establishment and to the challenges and conditions the country is facing execution of improvements to the country’s market. As now. Continuing on with 2017’s recovery sentiment, mixed with the markets being holistically affecting one another results in 2018 reflects continued adjustments but at a and complex in their structure, any changes or new stronger pace to the current economic conditions and introductions made will require time for solid results to newly formed political body. In the residential sector, fully form. With new policies and initiatives on hand, we affordability remains at the forefront of our worry and hope Malaysia will progress on positively towards a high- efforts are pushed to help gradually lessen this financial income nation. burden that has seen a staggering unsold level of 41,999 residential units worth RM26.84 billion. The commercial sector too faces a similar dilemma of how incoming supply will be absorbed amidst barely-hanging occupancy rates and the redefinition of commercial spaces due to Tan Sri Dato’ (Dr) Abdul Rahim Abdul Rahman transference to the online world. Executive Chairman, Rahim & Co Group of Companies 4 PROPERTY MARKET SNAPSHOT 1H 2018 Northern Region Central Region PERLIS KUALA LUMPUR Resi (Residential) Resi PBO Retail Resi PBO Retail Growth of Residential Property Transaction Volume (1H 2017 vs 1H 2018) KEDAH SELANGOR PBO (Purpose Built Office) Growth of Purpose Built Office Resi PBO Retail Resi PBO Retail Occupancy Rates (1H 2017 vs 1H 2018) PENANG NEGERI SEMBILAN Retail Growth of Retail Complex Resi PBO Retail Resi PBO Retail Occupancy Rates (1H 2017 vs 1H 2018) PERAK Resi PBO Retail Southern Region East Coast Region East Malaysia Region MELAKA KELANTAN SARAWAK Resi PBO Retail Resi PBO Retail Resi PBO Retail JOHOR TERENGGANU SABAH Resi PBO Retail Resi PBO Retail Resi PBO Retail PAHANG Resi PBO Retail MOVEMENT Decrease Increase Major Moderate Stable Moderate Major >-10% <-10% Stable <10% >10% 2018 PROPERTY MARKET REVIEW 2019 5 KEY ECONOMIC INDICATORS GDP & CPI Growth Rate and Net FDI Population & Unemployment Rate (2013 - 1H 2018) (Source: BNM) (2013-1H2018) (Source: DOSM) (%) (RM billion) (mil) (%) 7 50 33.0 4.0 45 32.5 6 3.5 40 32.0 3.0 5 35 31.5 2.5 4 30 31.0 25 30.5 2.0 3 20 30.0 1.5 2 15 29.5 1.0 10 29.0 1 5 28.5 0.5 0 0 28.0 0 2013 2014 2015 2016 2017 1H 2018 2013 2014 2015 2016 2017 1H 2018 Net FDI GDP Growth CPI Growth Population Unemployment Rate (RM/billion) Rate (LHS) Rate (LHS) (million persons) (LHS) (RHS) (RHS) KEY PROPERTY MARKET INDICATORS Quarterly House Price Index Household Debt to GDP Ratio (2013 - 3Q 2018) (Source: IHRM, JPPH) (2013-1H 2018) (Source: BNM) (%) 250 100 90 200 80 70 150 60 50 100 40 30 50 20 0 10 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 0 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 1H 2018 Malaysia Kuala Lumpur Selangor Johor Pulau Pinang Purchase of Purchase of Personal use Purchase of residential non-residential securities properties properties Purchase of Credit cards Others transport vehicles 6 2018 PROPERTY MARKET REVIEW 2019 7 NORTHERN REGION Perlis | Kedah | Pulau Pinang | Perak 8 PERLIS Indera Kayangan Key Facts (as at 1H 2018) (Source: Rahim & Co Research, JPPH) RESIDENTIAL RETAIL Supply 25,744 units 3.0% y-o-y Supply 601,401 sf stable Transaction Volume 327 units 18.9% y-o-y Occupancy Rate 100% stable Transaction Value RM67.65 mil.