Construction & Real Estate
From The Report: Malaysia 2014
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The construction sector has experienced consistently strong growth in the past four years as the industry expanded by 11.4%, 4.7%, 18.1% and 10.1% each year from 2010 to 2013. Sector growth has surpassed GDP growth in recent years, spearheaded by the government’s Economic Transformation Programme (ETP) and public-private partnership (PPP) projects. Counterbalancing the interest shown in the more profitable high-end properties, the government has also been mindful of developing more affordable options through various government programmes. Mixed-use mega projects in Kuala Lumpur and Iskandar are expected to produce stable demand for construction services. Sustained economic expansion, a youthful and growing population and an investor-friendly market amenable to foreign and domestic investments have continued to drive Malaysia’s real estate market forward in 2013. The government is seeking to rein in residential property growth to limit broader economic damage in the event of a market downturn as well as to keep home prices affordable for the less affluent. Although investment in the residential sector is expected to remain firm within the short term, particularly with regards to mid-range projects, the market is likely to continue its correction course throughout 2014. This chapter contains interviews with Michael Yam, President, Real Estate and Housing Developers’ Association; and Mohamad Salim, Group Managing Director, MRCB.

Articles from this Chapter

Overview

Big plans: Strong sector growth coupled with an ambitious roadmap for development
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Spurred on by massive capital expenditure projects by both the government and the private sector in response to Malaysia’s strategic economic development plans, growth in the country’s construction sector has been outpacing GDP expansion in recent years. The government’s Economic Transformation Programme (ETP) and public-private partnership (PPP) projects have spearheaded much of this growth in recent years, leading to a multiplier effect across the industry, although a downturn in public spending…

Analysis

Penang promise: The second-smallest state has undertaken numerous projects recently
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Overshadowed by developments in Selangor and Iskandar, Malaysia’s second- smallest state of Penang has quietly put together an impressive string of projects in recent years. Tucked in between the much larger Kedah and Perak states along Peninsular Malaysia’s west coast, Penang’s strong population growth coupled with a thriving real estate market and burgeoning tourism industries has given rise to a host of construction opportunities. Much of the state’s growth is centred around its densely…

Interview

OBG talks to Michael Yam, President, Real Estate and Housing Developers’ Association
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Interview:Michael Yam How would you assess current government efforts to curb property speculation and control prices for the local population? MICHAEL YAM: According to our research, we are seeing two issues that the government is trying to deal with; the first being speculation and the second being price increases due to foreign purchasing. The introduction of the real property gains tax (RPGT) may help curb speculation in certain areas of the country, but not everywhere. The primary and…

Interview

OBG talks to Mohamad Salim, Group Managing Director, MRCB
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Interview:Mohamad Salim Will recent announcements in the 2014 budget have the desired effect of curbing speculation and increasing housing affordability for locals? MOHAMAD SALIM: The announcement of the new real property gains tax, or RPGT, by the prime minister in the 2013 budget were in line with many developers’ expectations. Under the new rules, the RPGT rate will be 30% for properties sold within the first three years, 20% for properties sold in the fourth year and 15% for properties…

Overview

On the map: The real estate market continues to expand with various new projects
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Sustained economic expansion, a youthful and growing population and an investor-friendly market amenable to foreign and domestic investments have continued to drive Malaysia’s real estate market forward in 2013. Despite concerns about market overheating and growing vacancies in some subsectors, property values have continued to climb in recent years, albeit not at the blistering pace which characterised the sector from 2009 to 2012. Government efforts to cool the market have had some effect on…

Analysis

Soft landing: Assuaging concerns about the transparency of market pricing
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The real estate market has garnered attention from both foreign and domestic investors seeking a strong return on investment amid consistently low interest rates. However, the government is seeking to rein in residential property growth to limit broader economic damage in the event of a market downturn as well as to keep home prices affordable for the less affluent. Some of the regulations put in place to add drag to the sector include raising the real property gains tax (RPGT), implementation of…