Category: Swhengtee Article Published: Wednesday, 07 August 2013 18:46
07 March 2013| last updated at 06:11PM
FOCUS: Upward momentum after general election
By KHAIRUL KHALID
MORE ACTIVE: Although a period of adjustment is expected immediately after the general election, the local property market is expected to continue its upward trajectory in the next five years.
Adjustment: For the first two months after the general election (GE), there will be about two months of adjustment period followed by six months of a lot of movement in the market due to pent-up demand, says property consultant Gavin Tee. “Immediately post-election, the property market will be relatively quiet as the elected government takes time to settle in and the inevitable staff changes take place in the cabinet and ministries. For example, even though Barisan Nasional (BN) remains in federal government, we would likely see a change of key personnel and policymakers in the cabinet. There would also be internal changes during respective party elections that would affect the selection of these policymakers,” says Tee during an exclusive interview with NST RED recently.
Will the property market change after the GE? “The bigger question is if there are any policy shake-ups at state level regardless of which party wins. I am a little bit more concerned this time around compared to the last two elections, especially with regards to foreign investors who have expressed some uncertainty. On the other hand, there is more political maturity among the electorate, which is a good thing. Regardless of the election results, the property market will still move forward in an upward trajectory and should remain strong within the next five years,” says Tee, who is also the Founder and President of SwhengTee International Real Estate Investors Club.
Concerned: Based on Tee’s various trips overseas, foreign investors especially Singaporeans and Chinese have confided that they are quite concerned about the future of major projects should there be any changes in government, whether it’s at federal or state level. “My answer to them is quite simple - major property developments like Iskandar, Johor Bharu and others in Greater KL are federal-backed projects with major foreign investors. Whichever way the outcome goes, the government of the day will have to follow through with these projects. In fact, both BN and PR (Pakatan Rakyat) have stated that they welcome Foreign Direct Investments (FDI), so it shouldn’t be much of an issue. Therefore, I don’t think any major developments will be greatly impacted by the upcoming election results,” observes Tee.
The property consultant feels that changes in leadership and policymakers within the government are important and part and parcel of the nation’s growth and evolution. The government needs to inject more youth and professionals into its leadership. “It is vital to appoint more people with the relevant expertise in each field. In other words, we have to select candidates based more on their skills and ability rather than just political influence or power.”
Five-Year Plan: A lot of people are adopting a wait-and-see attitude, but Tee is of the opinion that now is the best time to invest in property. “In fact, the best time to invest in property is before the election when investors are able to negotiate for the best prices. Nevertheless, most people will probably start to invest in property only after the elections. Of course, they will have to do the necessary research before deciding to invest.”
Tee advises property investors, whether they are corporations or individuals, to plan ahead and prepare for the next five years. He observes that with more property developments being led by the government and policies becoming more transparent, it is quite easy to identify the relevant government policies that will potentially impact investments. This definitely helps in drawing up a five- year plan. “The best time for property investors will be within the next five years. There will be a lot of pent-up demand to propel the property market to the next level. Many foreign and private investors of major projects have been in standby mode. The property market will see a lot of action in the next six months regardless of who is in power. Malaysia is now much more open and globalised in terms of policies and developments.”
Policymakers: Globally, the property market is becoming increasingly linked to the economic system. Around the world, governmental participation has become more and more essential to the growth of a country’s economy. For example, there has been a wave of governments setting up Special Economic Zones (SEZ) to compete with other countries to attract foreign funds.
This election will be important to ongoing developments such as Iskandar (Johor Bharu), Greater KL, the East Coast and Penang. “I think the big question for this general election is not whether it will have a positive or negative impact on the property market, but what will be the direction of the next government regardless of whether it’s BN or PR. For example, in which direction will policies change in areas such as tourism and affordable housing? Policymakers can make the difference to the direction of the property market. That’s how the general election may impact the economy – through changes in policymakers,” opines Tee.
Tee is optimistic that world-class property developments in Malaysia such as Iskandar will continue to prosper but he thinks that this election will probably have more impact on developments in Greater KL than in other areas. “Heavy investments in Greater KL have been in standby mode and major announcements will probably happen only after the GE such as major infrastructure projects, Menara Warisan Merdeka and Tun Razak Exchange (TRX). The best investment picks are government-led projects and developments such as the Mass Rapid Transit (MRT) and Menara Warisan Merdeka.”
Hotspots: Tee says that most property hotspots have been influenced by government developments such as Iskandar and the MRT. “Most developing countries need improvements in critical infrastructure such as highways, railways and other modes of transportation. In most of these cases, the government will get involved one way or another due to the heavy investment required. The private sector alone won’t be able to undertake these mega projects themselves. You can see for yourselves how newly developing countries such as Myanmar, Laos and Cambodia are changing so fast that as a result, their property markets are moving up very fast as well.”
Tee reveals that property prices in Malaysia are still among the lowest in the region and will start booming in the coming years. “Although we have not been promoting our property market as much as we should to attract foreign investors, I think that things are improving. In fact, within three years’ time, I believe KL will become one of the hottest property markets in the region.”
Source: NST RED