Georg Chmiel is Jumai IQI Chairman with a strong background in growth companies and capital markets with a special focus on real estate groups, online and media companies. Backed by over 25 years of experience, he is adept at steering business strategy, value creation and management.
Juwai IQI Co-Founder and Chairman Georg Chmiel presents his views on what could possibly take place as the property market heads into a brand new 2020 year ahead. Two main criteria form the basis of a more optimistic outlook in the coming year, he reasons by virtue of something’s gotta give, especially since the extended lockdown has been dragging on for quite some time, with hope appearing as a surety on the horizon.
Reopening of the Borders
“The reopening of borders will have a direct positive impact on the property market by bringing back and attracting overseas investors and foreign permanent residents to Malaysia.
That also forms the indirect effect and the larger boost to the property market. The reopening of borders is a true symbol of the overall return to normality, economic growth, employment growth and growth in confidence among all Malaysians. This will inevitably lead to a growth of the domestic property market.
“We expect the residential market to gain strength as a result of the rebound in the wider economy. Transaction volume will increase first, and lead overtime to price growth subse-quently,” he reasons.
Having said that though, he is quick to point out that the most recent outbreak of the omicron variant of the COVID strain might delay the recovery — depending on the severity and the response, “However, I am confident that Malaysia’s high vaccination rate and foresight is paying off. It will delay it only, (and) the economy will eventually bounce back,” he opines.
“With the rapid pace of vaccination in Malaysia and Covid medications improving, the outlook I believe, is optimistic. Therefore, we expect to lead in 2022 to a jump in household spending and the desire to consume. All the same conditions are also likely to increase property demand and the formation of new households,” he expains.
He expects the economy to bounce back in 2022, matched by corresponding growth in the global economy.
“The government is implementing both economic and fiscal stimulus, so we expect Gross Domestic Product (GDP) growth to hit 6% next year.
“At 65% of GDP, exports are so significant that improvements in the global outlook and the resolution of international supply chain will have outside positive impacts in Malaysia,” he concludes.
Reasoning that employment and household income are directly linked to housing demand, he believes next year is when the industry at large can expect both economic reopening and Government stimulus to drive both components upwards.
“In fact, UOB economists are predicting unemployment to decline by six basis points to 3.6% for 2022.
“In summary, our forecast is for a growing economic recovery and significantly stronger prospects next year. Omicron will delay the return to “The New Normal” but I remain optimistic about the years to come.