Ahead of the publication of its Property Market Outlook 2020 report in the coming weeks, Savills Malaysia has announced seven predictions for the Malaysian property market in the year ahead.
Durian spurs demand for agriculture land
Among the predictions for 2020 includes the rise in agricultural land values spurred by the demand for Durian plantations. According to Datuk Paul Khong, Managing Director of Savills Malaysia, Savills predicts a rise in agricultural land values in 2020.
“Values have barely risen by 10% since 2014. While the industry is strong and palm oil prices are approaching record highs, smaller parcels of land have also attracted wide interest from durian planters supporting an anticipated up-tick in values.
The High Speed Rail is back on!
In terms of the High Speed Rail, Savills Malaysia says the Malaysia-Singapore project is back on. Nabeel Hussein, Senior Director of Capital Markets notes that they foresee yet another exciting change in development dynamics and with careful analysis, will open up huge opportunities for the project.
Transportation transformation with RTS
Additionally for Johor, Datuk Chris Boyd, Consultant Director predicts that downtown Johor Bahru will be transformed with the construction of the Rapid Transit System linking the city to Singapore.
“Malaysia has never before experienced such a transportation transformation,” he says. “The impact will change life down south forever, so be prepared for a new property focus on Johor Bahru.”
Mixed developments a new trend in property market
For the retail, industrial and office market, Amy Wong, Director of Research and Consultancy adds that they are seeing traditional boundaries being broken down as retail meets warehousing in the form of distribution and sales outlets, flexible office spaces joining hands with apartments as well as plans for mixed developments between malls and elderly accommodation.
Residential products still strong
On the residential market front, Savills Malaysia assures investors that residential products are still going strong.
According to Kevin Goh, Director of Estate Agency, the residential property market has been sluggish for nearly six years, but despite this, more than 1.32 million residential properties have been sold over this period.
“Gross Domestic Product has grown annually between 4.5% to 6.0% and the population continues to grow at 1.4% per annum,” he says. “The market will not crash because it has been allowed to weaken gradually, and there is still an abundance of potential buyers, with relatively inexpensive end finance available for those who qualify.”
Malls enjoying high occupancy
Murli Menon, Head of Retail Services at Savills weighs in on the retail industry and adds that the top six retail malls still enjoy virtually 100% occupancy and rents may have stabilised but have not dropped.
“Retail habits will change, the better malls will adapt to new realities, and we will see an improvement in mall management to meet rising expectations.”
Decision-driving data
For Savills’ seventh prediction, Suriaghandi Suppiah, Property Management Director is happy that at last, data is becoming more available and is guiding development decisions. He anticipates that, whether its traffic patterns or household income, these statistics are going to make for better targeting and less development risk.
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