PETALING JAYA: The property sector’s link to the economy is undeniable. In a thriving economy, the demand for property rises, leading to higher sales and sky-high prices.
Conversely, the sector also has a real and significant impact on the economy.
For instance, Malaysians purchased RM94.28 billion worth of property in 2022, according to the National Property Information Centre (Napic). In the process, they gave the economy a RM42.5 billion boost.
This is equivalent to 2.7% of the national gross domestic product (GDP) of RM1,791.4 billion.
At 47%, construction accounts for the highest proportion of the contribution, international real estate technology group Juwai IQI co-founder and group CEO Kashif Ansari said.
The income generated from real estate activities accounts for 26% of the contribution while expenditures related to home-purchases accounts for another 9%. The economic impact multiplier accounts for the remaining 18%.
But over and above the RM42.5 billion, tens of billions more had been generated through other activities such as the production of construction materials, Kashif said.
Selangor has benefitted the most from the economic benefits generated by the property sector. It saw a 3.1% rise in its GDP, followed by Penang with 3% and Johor with 2.9%. The federal territory of Kuala Lumpur saw a 1.7% boost in its GDP from property sales last year.
For every new home purchased, there is an economic benefit equivalent to RM174,770, data from Juwai IQI shows.
However, the quantum also differs according to state.
For instance, the sale of a house in Kuala Lumpur can generate up to RM293,915 in economic benefits, while in Selangor it is RM201,119.
In Penang, each new home sale generates RM174,045 in economic benefits while in Johor it gives the economy a RM149,926 boost.