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Yang Berusaha Encik Michael Kong,
President of PEPS,

Yang Berusaha Encik Foo Gee Jen,
Organising Chairman of 12MPS,

Yang Berusaha Tuan Haji Ahmad Zailan Bin Azizuddin,
Director-General of JPPH,

Ladies and gentlemen,

Good morning and Salam Harapan,


1. I would like to thank the organisers for inviting me to deliver the Keynote Address at the 12th Malaysian Property Summit 2019.

2. Congratulations to the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS) for organising the 12th installation of the Property Summit. This Summit brings together property professionals and help ensure that everybody is better informed in planning, scheduling, constructing and supplying property end products to meet the demands of end users and investors.


3. It is no secret that there is trouble in the property market. Transaction volume in the property market has been on a decline. Based on data from the National Property Information Centre (NAPIC), we know that transaction volume peaked in 2011 at 430,400 transactions before falling to 311,824 transactions in 2017. That is an average decline of 5.2% annually since 2011.

4. The good news is that the final transaction volume for 2018 is estimated to have risen marginally by 0.6% to 313,844 transactions compared to the previous year. The trend reversal is not much, but it does illustrate the improving confidence in the property market after suffering from a persistent long-term decline.

5. Despite the positive development, we must take note that the worsening overhang situation in the housing sector. The latest NAPIC data further show that the total overhang properties have increased to 30,115 units worth RM19.5 Billion by the end of Q3 2018, from 25,193 units worth RM15.6 billion in Q1 2018. In spite of the worrying rise, more properties are being built and indeed, unsold properties currently under construction have increased by 26% to 77,118 units from 61,266 units within the same period.

6. Despite the increasing quantity of unsold homes, many in the B40 still cannot afford to buy these properties and are still in need of affordably priced homes. This shows there is a serious mismatch between supply and demand in the industry.

7. Addressing problems in the housing industry will require close collaboration and coordination between the private and the public sectors. Developers will need to focus more on providing affordable homes in the right locations instead of continuing to build homes that are beyond the reach of a majority of Malaysians. The Government stand ready to support initiatives to provide more Malaysians with affordable homes.

8. The relevant authorities are playing its roles to correct the imbalance. The Government and Bank Negara Malaysia (BNM) have set out cooling measures to stabilize the housing market. These include:

  1. the rolling out of the National Housing Policy 2018-2025
  2. the waiving of stamp duties on property sales & purchase agreements (SPA) for properties priced up to RM1 million as well as for loan agreements of up to RM2.5 million under the National Home Ownership Campaign 2019 (HOC 2019) in order to clear the stock of unsold properties. That means if you buy a home for RM1.5 million, the first RM1 million is exempted from stamp duty, you only need to pay only for the remaining RM500,000.
  3. BNM’s RM1 Billion Fund for Affordable Homes for the B40 segment.


9. I would urge all key players to take heed and pay attention to the objectives under the National Housing Policy 2018-2025 as well as the housing data compiled and disseminated by NAPIC before embarking on new launches. A proper market study is a must before a development is launched or funded. Unbiased advice from competent professionals would eliminate the inconsistencies and mismatches in the industry.


10. In the wider context, confidence is growing in the economy following our fiscal reforms including wider application of open tenders in the public sector, migration towards accrual accounting from the current cash-basis of accounting and fiscal consolidation that will lower the Government’s fiscal deficit from 3.7% of GDP last year to 3.0% in 2020. We have achieved our 3.7% last year despite some reservations and doubts whether we will achieve that but so far the numbers have been positive in our favour.

11. In the fourth quarter of 2018, the GDP grew faster at 4.7%, versus 4.4% in the third quarter. What I further find encouraging is the fact that the 4.7% GDP fourth quarter growth easily beat the median Bloomberg consensus rate of 4.5%, which at once proves our doubters wrong. This shows that the economy is on the right track.

12. The rising investors’ confidence is best exemplified by rising FDI figures. MIDA statistics show that approved manufacturing FDI for the first 9 months of 2018 rose to RM48.8 billion, a 249% growth compared to the same period in 2017. These approved investments are expected to create an additional 41,000 manufacturing jobs in the next 2-3 years.

13. With FDI going strong, domestic investment should follow suit especially with the Government normalizing its expenditure. We have finished reviewing most of the Government projects and the normalization of public expenditure as well as investment should boost this year’s growth. Public investment already rose 44% quarter-on-quarter in the fourth quarter of 2018.

14. Furthermore, Nielsen survey shows Malaysia’s consumer confidence stood at 118 points in the fourth quarter of 2018, 24 points higher from a year ago. This is the highest year-on-year jump among all countries surveyed. The high level of consumer confidence places Malaysia 7th among 64 countries during the quarter.

15. Meanwhile, Malaysia is playing the role of a safe haven for companies hit by rising trade barriers. This has partly contributed to our 2018 goods exports rising 6.7% to nearly RM1 trillion, the highest level in Malaysian history. Moreover, our trade surplus rose by about RM22 billion or 22.1% last year to RM120 billion, also the largest trade surplus ever. The great trade performance has translated into Malaysia achieving a current account surplus of 2.3% of GDP for the whole of 2018 and the surplus is expected to continue this year.

16. Our reforms and encouraging economic performance so far has convinced the top credit rating agencies, namely Fitch, Moody’s and S&P to keep Malaysia’s sovereign credit ratings high at A- or A3 despite challenges that we face. This is a big thumbs-up to the Pakatan Harapan government and our institutional reform agenda. In the light of our deficit of 3.7% was higher than that given to than that was given to the three credit ratings agencies, but despite that they understand that we have to clean up the country, we have to deal with the challenges of the 1MDB scandal, and they are willing to give us time because they see our commitment to carrying out the necessary institutional reforms to ensure that Malaysia is not only clean but that we comply to international best practices.

17. On inflation, Malaysia recorded the lowest inflation rate in 9 years at 1.0%. Now we realise that despite the CPI at 1%, the cost of living is still high. We are still looking at how to ensure that the CPI of 1% can be filtered down and allow the public to benefit from the low inflation rate. The government is planning other figures to reflect this, so whilst we have a CPI of 1% that reflects the entire economy, you also want to see the cost of living for certain segments of the population to ensure that we can a realistic figure, and also take the necessary steps to alleviate the high cost of living. The problem is of course that the rise in cost of living has not gone down to the level of 1%. At the same time, sometimes the CPI is used as a benchmark for wage increases. We feel that using 1% as a benchmark for wage increases is not so accurate. That is why possibly another index can better reflect the cost of living, so that wage rises reflect the actual situation to be more appropriate. Having said that let me emphasise, that we use the same basket of goods and weightages as what was used previously, but as everyone knows, the weightages may not necessarily reflect the situation on the ground for a particular segment of the population. While we are happy with the low CPI, we shall again emphasise on the fact that through the removal of the GST, substituted with the SST, we have managed to keep the increases of prices within the range that we are looking for at 1%. Our challenge is to make sure that this inflation of 1% can also be translated to the population at large, especially to those in need.


18. I would like to stress on the importance of strong collaboration between the government, private sector, people and professionals to ensure the stability in the property market. This forum is the of many steps that we can take to learn from each other and work together to address problems besetting the property market in Malaysia.

Thank you.

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