Structural changes in economy crucial, developers conference told

On the domestic side, Lee Heng Guie is seeing weaknesses in the local economy which is running on one leg – private consumption. He said consumper spending will be dampened if sentiments continue to be poor. Hence, the government has to step in instead of relying on the central bank.

PETALING JAYA: Developers, real estate consultants, an economist and a representative from an overseas developer that some structural changes are needed in the overall management of the economy to lift the country to the next level.

They comprised speakers and panellists at the annual developers conference "CEO Series: Surviving the turbulence and World of Disruptions" organised by Rehda Institute on Tuesday.

These structural changes in education, productivity levels and other areas, by extension, will help to steer the property development sector which, according to this group, is not expected to improve markedly until 2021 or 2022.

Rahim & Co International Sdn Bhd CEO for Real Estate Agency Siva Shanker said he has to “change his mind” about his previously bullish outlook about the property sector.

“The political situation is the biggest issue today, beside other disruptors, ” said Siva. “We must accept the fact that we are looking at more questions than answers, ” he said, adding that he does not expect the sector to turn around until two to three years later.

On the more immediate front, Socio-Economic Research Centre executive director Lee Heng Guie in his paper “Reaching for the levers for enhancement in the Malaysian Economy by Realigning Priorities” said 2020 will be a year of inflection.

Lee said although recession risk has somewhat been “lowered” compared to the first quarter of 2019, going forward the low interest rates of the past decade has made it difficult for central banks around the world to cut rates.

“It (interest rates) is no longer high anymore (unlike about a decade ago), so how much can you cut?” Lee asked, adding that near-zero interest rates wield huge impact on the overall economy, and by extension, on the property sector.

On the domestic side, he is seeing weaknesses in the local economy which is running on one leg – private consumption. He said consumper spending will be dampened if sentiments continue to be poor. Hence, the government has to step in instead of relying on the central bank.

Rehda Institute chairman Datuk Jeffrey Ng also called on the government to take a more strategic role to steer the economy and the by extension the property sector and re-consider some of policies implemented with regards the property sector.