Most experts are optimistic on prospects for Malaysia during this critical general election year – with many convinced that KL will lead the beleaguered country’s recovery post-GE.
From July on wards after the general election, Malaysia will start a market recovery that will last for the next 5 years, predicts Dato’ Sri Gavin Tee, a prominent property consultant.
“After a very difficult 4 1⁄2 years for the property market, Malaysia will come out of the bottom sometime in late December 2017 till early 2018 and emerge stronger than ever before,” he told a crowd of about 300 property investors in Johor Bahru recently.
“The sharp decline of the market lasting almost 5 years while an expected strong recovery starting from this year and lasting for the next 5 years is similar to a 10-year V-shaped property cycle,” Tee, who is also the Founder and President of Swhengtee Group elaborated.
The recovery will be led by tourism related activities followed by China’s Belt & Road projects, as well as the completion of the early phases of several mega projects such as the Tun Razak Exchange (TRX), Malaysia’s next financial district, and the MRT and LRT extension. Also helping the economy are rising oil prices which recently topped USD65 per barrel for the first time since 2014 and the strengthening Ringgit, Tee said.
He further explained that Malaysia has lost out on its competitiveness since the last 4 years starting with the disappearance of MH370 followed by the shooting down of MH17, the 1MDB issue and the kidnapping in Sabah, among other factors. The international community has to a large extent lost confidence and for a few years, Malaysia was not in the radar of many foreign investors. “Malaysia even lost out to Thailand, the Philippines and Indonesia; we are still moving forward, but moving at a much slower pace than our neighbouring countries,” he said.
But as with any market cycle, there are peaks and bottoms; in Malaysia’s case, Tee was confident that we have seen the worst and this year will see a new beginning. He emphasised that it will not be a sudden boom but “there will be a lot of significant changes in the capital city, Kuala Lumpur, which will then spread throughout the country until 2022.”
Citing the tourism example, Tee said it will bring massive changes even to second tier cities like lpoh, Pangkor, Kuantan, Bentong, Kuching and Taiping from 2020 – 2022.
“Kuala Lumpur tourism will experience the fastest rebound followed by Melaka, Iskandar, Penang and Kota Kinabalu. In fact, KK’s airport is the second busiest in Malaysia and is being expanded, while a new international airport is being considered,” Tee said.
Kuala Lumpur will also for the first time become a financial, trading, transportation and even an Islamic hub for ASEAN. “Being an international destination and the seat of political power, it has suffered theworst but KL will also be the first and fastest torebound when the upturn comes,” he continued, adding that KL’s property prices are still relatively low compared to Penang and Johor Bahru even though it is at the heart of the action.
‘MOST COMPETITIVE’
“Malaysia has built up the most competitive infrastructure in ASEAN – we have the best strategic location next to Melaka Straits, the best relationship with China as well as the best cultural and historical ties with China. We also have the most investor-friendly policies, a transparent legal system and multilingual talent force.
“With all these in place, it’s only a matter of time after the general election that everything will start moving very fast. It’s as if we are on a standby mode now – once the political uncertainty clears, Malaysia will shift to high gears to catch up with the rest of its neighbours.
He further said: “We will see more contracts signed for BRI-related projects, more Foreign Direct Investments (FDI), more land transactions, more development and construction activities especially infrastructure projects, mega structures and hubs in various fields.
In addition, 2020 has been designated as Visit Malaysia Year; hence there will be a lot of tourism activities. Budget 2018 has proposed a lot of incentives for SMEs in the tourism industry as well as for hotels.
The tourism boom will benefit Malaysia overall and will cause demand to spike for tourism-related and commercial properties. Medical tourism and MM2H applications will become even more popular among foreigners as more investments enter the country, the consultant predicted.
“The tourism spots will also spread out to small towns and kampongs or villages, giving eco-tourism a big boost. Malaysia is fortunate to be home to the world’s oldest tropical rainforest estimated to be as old as 130 million years. It is located at Taman Negara which straddles 3 states – Pahang, Terengganu and Kelantan – another reason for it to be an eco-tourism hub.”
In terms of man-made attractions, Malaysia’s UNESCO World Heritage sites in the old quarters of Melaka and Penang still continue to draw the crowds; the small town of Bentong meanwhile is gaining more prominence as Malaysia’s first and only ‘durian town’ as durians start becoming one of the hottest exports from Malaysia.
Malaysia also has its very own unique culture, for example, the Malay traditional costumes such as the sarong kebaya and bajuMelayu in addition to the Malay kampong house and Malaysia’s famed multicultural array of food.
“Tourists nowadays especially those from China prefer authentic cultural experiences which we have in abundance. They don’t come here to see the tallest buildings or the biggest shopping malls anymore because their own buildings and malls in China are even taller and bigger than ours,” Tee quipped.
In summing up, the popular speaker believed KL’s potential as a hub or international centre in many fields is very strong due to its strategic position within the BRI – especially if the ‘Project of the Century’ extends all the way to Australia, America and Europe.