The below article contributed by self made deca-millionaires who has various experience in different industry before made it to the top. Today he foresee the future of KK’s which I believe it will turn out to be the “true picture” of KK’s few years from now. Currently he is investing heavily in KK properties especially land for development. Soon he will reveal his first and latest MULTI BILLIONS project comprising mix development at primes location. Let us learn from the Rich and the Best!!
Here we goes..
The world is presently poised at one of the most crucial points of modern economic development. Asia, led by China and India, is positioned to take over as the growth engines of the world economy- never in the history of the world has this ever been possible. All the countries in between China and India, will experience a spill-over growth effect. Malaysia and Singapore are particularly well positioned to take advantage of the expected boom because of our cultural heritage and ability to communicate and act as liaison between the 2 great cultures which have inherent language, cultural and political differences with each other.
China has, for the last decade and a half, acted as the production house of the world. But it is now facing inflationary pressures, part of the price of its own phenomenal economic success. A great deal of the steel and building materials ranging from tiles to sanitary fittings, machinery and equipment etc used by the whole world, now come from China.
What this translates to is Cost Push inflation and will result in higher building costs all round and therefore higher property prices.
Property prices in Malaysia are currently about the lowest in Asia- prices in Kuala Lumpur are MUCH lower than Manila, Hanoi, Ho Chin Minh, Bangkok and Jakarta(don’t bother comparing to Hong Kong, Singapore, Tokyo, Seoul, Taipei, Beijing, Shanghai, Shenzhen etc!) Yet our level of economic development is higher than some of the cities I have compared Kuala Lumpur with.
Now lets look at prices in Kuala Lumpur compared to Kota Kinabalu:
- Apartments in prime locations like KLCC(RM2,500 psf), Ampang (RM1,400 psf upwards), Damansara (RM1,400 psf), Kenny Hills (RM1,600 psf), Mont Kiara/Sri Hartamas(RM1,100 psf upwards). In Kota Kinabalu, prime sites facing the sea within city center, now average RM700 psf.
- Office space within KL city center now exceeds RM1,500 psf- Kota Kinabalu averages RM500 psf
- Commercial lots in popular malls like Sungai Wang, are almost unavailable but the rare transactions show sales prices exceeding RM5,000 psf and higher.
- Shop lots of 3-5 storeys in Kuala Lumpur in NEW AREAS like Kota Damansara exceed RM4 million per lot. In Kota Kinabalu, they barely command RM1 million.
Kota Kinabalu has virtually the cheapest city center land for a city that exceeds 500,000 people. It has traditionally been hampered by its extreme distance and relative isolation. But thanks to Air Asia and other regional airlines, that has now changed and will change the economics of Kota Kinabalu, even more in the next 5-10 years. There are already over 20 flights daily to Kuala Lumpur and each year is going to see much greater connectivity with other capital cities- Kota Kinabalu is coming into its own as a regional hub. It is no longer just a transit point as it was in the old days- it is fast becoming one of the most desirable tourist destinations in Asia! It will soon enough be as well known as Bali, Phuket and Penang as exotic beach resort destinations. Tourism is in its infancy in Sabah- on a scale of 1-10, it has just reached 1! The potential of tourism as a money spinner for a country has been recognized as being phenomenal- the exchange earnings of countries like Singapore, Hong Kong, Thailand, Indonesia are heavily predicated on tourist arrivals. Places like Bali, Hawaii, Phuket, Palau, Bhutan are almost totally dependent on tourism for their economic well being. There is virtually no industry or agriculture in these places, unlike Kota Kinabalu which has strong agriculture and industrial potential. Sustained economic and financial growth NEEDS a balance economy- if one compares the break neck speed of property development in China with the same crazy level of building in places like Abu Dhabi and Dubai, a logical person would have concluded that the Middle East, apart from oil, had little else going for it-it had no industry, no agriculture, no exports (apart from oil), limited infrastructure, a small domestic market. Therefore such rapid building had to be speculative in nature, unlike China which has strong industry, vast agriculture, huge processing and manufacturing, a well planned infrastructure development program and a huge domestic market that is enjoying sustained financial growth. What it means is that growth in the Middle East was not predicated on strong foundations, unlike China’s growth.
The 1st wave of tourism development has arrived in Kota Kinabalu- this could grow into a huge tsunami of tourists if properly managed. The tourists will come not just from Europe, Australia or the USA but the largest wave will be from China as the Chinese are generally compulsive travelers and keen to see the world- initially for the next 15-20 years, they will be able to afford only the nearby and cheaper destinations of Asia. Kota Kinabalu is well positioned to be a key destination for the billion mainland Chinese.
This will be supplemented by retirees who are seeking a better lifestyle for their golden years, a more affordable place to live out their lives. People are becoming more AWARE of what a good lifestyle encompasses; they are becoming more MOBILE, more independent of their families who actively encourage them to travel, to explore opportunities. Retirees are not poor people- they have accumulated substantial life savings but they are now aware that what they have accumulated is inadequate to see them through their remaining years. When national retirement plans and national health plans were calculated and initiated some 40-50 years ago, the actuaries who drew up these plans made some serious fundamental errors- they based their calculations on an average life span of just 70 years whereas with improved medical care and improved nourishment, people are commonly living past 90! They also underestimated the rapid escalation of medical care and medicine-bear in mind that private medical care was a rarity 40 years ago and the State took care of everybody’s medical needs. The rapid population growth coupled with increased lifespans, coupled with increased EXPECTATIONS in the level and quality of healthcare has put an extreme strain on every country’s healthcare delivery system and retirement care capability. What is a fact is that many countries and many major corporations are technically INSOLVENT if they are to meet their commitments to their citizens in respect of retirement and medical funding. So what choice do they have? They must seek cheaper alternatives- a downgrading in living conditions and medical care is not acceptable so they must export their people to countries that can provide such required care at a lower cost- this is a win-win situation and we should take advantage of it by welcoming these retirees who are far from infirmed but will come with a wealth of experience, international contacts and financial power. We must encourage them to network, to develop businesses in their retirement years- we could very well nourish a potential Nokia, Apple, Microsoft, Ikea, Ericsson!
Sabah under its present leadership, has flourished economically, generating healthy annual surpluses for the State when deficits were the common annual result previously. This has generated greater confidence and optimism amongst Sabahans and such optimism is infectious and good for the State. When people are more confident, they will spend more, reinvest more into longer term assets like properties, demand a better quality lifestyle for themselves and their families-in short, such confidence will create a more buoyant economy and the level of economic growth will be self sustaining and self fulfilling once it has gathered sufficient momentum. State revenues from oil, palm oil, timber will continue to grow and once wisely re-invested into infrastructure development, will create a multiplier effect that will spread down the economic heirachy, further boosting general confidence. The Federal Government now recognizes the critical importance of Sabah in the political context and will have to pour in far greater resources back into the State, further improving the economic outlook.
There will be a continuous increase in demand for housing as more and more students who come to Sabah to study, will stay back to participate in the rapidly growing employment opportunities that will be there in the coming years. This will be one of the results of the country’s efforts to make Sabah a key educational hub of Malaysia.
However, the same level of development will not be experienced outside of the key city of Kota Kinabalu- it will take many years for the effect of development to filter beyond the city of Kota Kinabalu as general experience has shown.
For all these reasons, it is apparent why real estate investment in Kota Kinabalu will be one of the safest decisions that one can make- soon enough, many West Malaysians will wake up to this and will come in hordes to buy their place in the sun!
You cannot Grow Land..CK Wong & MY DAD