Sustainability is a pressing issue in all markets today, and the real estate sector, a significant contributor to carbon dioxide emissions, is no exception. The need for sustainable properties in Malaysia is not a future trend but a current necessity.
In this article, I will guide you through the ongoing sustainable developments in Malaysia, which will help you understand their urgency and importance.
For that, we start with discussing the sustainable development of properties in Malaysia. It is important to know if you have to buy property in Malaysia at all. Why should you even consider sustainable properties in Malaysia if the real estate market is bad?
Malaysia is in the moment of a rise in the economy, with a GPD growth of 8.7% in 2022 and 3.7% in 2023, according to the World Economic Outlook (2024, April).
The economy is growing, and the valuta is getting cheaper for foreigners, with a dal of the ringgit at 4.77 Malaysian Ringgit each Dollar compared to 4.45 a year ago. (29 April 2024)
That is an increase of 7.2%, and it is cheaper for a foreigner to buy property in Malaysia, but they economy is growing.
After that, there's forecast growth, especially for terrace homes. Even though overall growth is modest, some property types are expected to rise in value.
Malaysia offers good rental yields, with some areas exceeding 6%, according to Global Property Guide, 2024. This means you can potentially earn a good return on your investment.
So, according to what I just told you, should you buy property in Malaysia now? Yes, it's a good time to buy property in Malaysia. The only thing you must consider is the next question: Should you buy a sustainable property or just a regular one and not look for sustainable development?
Malaysia is making significant strides towards sustainable development, with the government leading the way. Sustainability is an important focus of the 12th Malaysia Plan (12MP), a national economic and social development blueprint.
An ambitious goal of Malaysia is to achieve carbon neutrality by 2050. This target reflects Malaysia's commitment to combating climate change and preserving the environment for future generations.
Several initiatives are helping the country to reach this goal. For instance, the National Green Technology Policy actively encourages eco-friendly practices across various industries. This policy incentivises businesses to adopt renewable energy sources, reduce waste, and implement sustainable production processes.
By prioritising sustainability, Malaysia is safeguarding its environment and positioning itself as a leader in the global green economy. This focus on eco-friendly practices can attract environmentally conscious businesses and investors, further propelling economic growth.
More and more Malaysian businesses are recognising the value of sustainability. They're actively implementing Environmental, Social, and Governance (ESG) practices.
There are a few key reasons why Malaysian businesses increasingly recognise sustainability's value.
Firstly, it's good for business. Sustainable practices can lead to cost savings through reduced waste and energy use.
Secondly, consumers are becoming more environmentally and socially conscious and willing to pay a premium for products and services from companies with strong ESG practices.
Finally, investors are looking for sustainable businesses that are seen as more resilient to long-term risks like climate change.
By embracing sustainability, Malaysian businesses can secure a competitive edge, attract conscious consumers, and position themselves for future success.
The construction sector needs to do a lot in the coming years to meet the growing needs of the world's population. However, this sector is also still one of the largest users of natural resources and plays a major role in greenhouse gas emissions.
Data from the United Nations Environment Program (UNEP) and the International Energy Agency (IEA) show that as much as 50% of the world's extracted materials are used in the construction sector.
This shows that the construction sector has a significant impact on our natural resources. This can lead to depletion and pressure on ecosystems.
According to UNEP and IEA, it is estimated that by 2060, there will be 2 global areas every week. This huge exponential growth will start in the coming years, so the demand for materials will also grow extremely fast. With a sustainable way of thinking, we need fewer materials for this.
According to the Ellen MacArthur Foundation, as much as 15% of construction materials are wasted. This is a huge waste because often, these are brand new materials that simply end up in landfills.
In addition, according to the Ellen MacArthur Foundation, most of the remaining materials from all demolished buildings simply end up in landfills.
This means that valuable resources are being wasted. In the future, we need to look at ways to extend the lifespan of buildings and make more efficient use of buildings.
The construction sector is also a significant source of greenhouse gas emissions. The energy consumption of production causes these emissions, but also the transport of all building materials causes a lot of emissions.
A lot of energy is also used during the lifetime of a building for the use of the building. All these emissions, therefore, contribute a large part to climate change and the associated problems.
One of the most commonly used building materials in construction is cement, and according to the IEA, this is one of the biggest culprits in CO2 emissions.
According to the IEA, the production of cement accounts for about 8% of global CO2 emissions. This shows that we can no longer continue with today's traditional construction methods and must embrace sustainable methods.
Sustainable properties offer a solution. They are built with recycled or sustainable materials, designed for energy and water efficiency, and minimise waste during construction and demolition.
By extending the lifespan of buildings and using resources wisely, sustainable properties lessen the environmental impact of construction.
Upfront Costs: Implementing sustainable features often requires a higher initial investment compared to traditional construction methods. This includes using eco-friendly materials, renewable energy systems, and energy-efficient technologies.
Material and Technology Availability: Access to sustainable building materials and technologies may be limited in certain regions. This can make it difficult for developers to adhere to sustainability goals while staying within budget constraints.
Investment Risk: Sustainable development is a relatively new approach, and some investors may perceive it as risky due to potential uncertainties around return on investment (ROI).
Resistance to Change: Shifting from traditional construction methods and materials can require adjustments for developers, including training for workers and adapting project management processes.
Cost Savings: Sustainable practices often translate to lower operational costs in the long run. Energy-efficient features like improved insulation and lighting mean lower heating, cooling, and overall building operation costs.
Increased Property Value: As awareness of sustainability rises, so does demand for eco-friendly properties. Sustainable features like water conservation and renewable energy sources can significantly increase the value of a property, leading to higher resale values or rental yields for investors.
Market Advantage: Sustainability is a growing trend in the real estate market. By developing environmentally conscious projects, Malaysian developers can cater to this rising demand and gain a competitive edge.
Attracting Global Investment: Sustainable properties hold significant appeal for international investors seeking eco-friendly options. This can lead to increased investment opportunities and a broader reach for Malaysian developers.
The GreenRE Awards celebrate Malaysia's leaders in sustainable design and construction. in 2023 the next awards where awarded.
Source: Green RE
Highest Scoring Commercial Building (Office): Lot 91 by Impian Bebas Sdn Bhd (KLCC & Sapura Resources). This 45-storey Kuala Lumpur tower showcases a district cooling system, energy-saving features, and water-saving practices.
Highest Scoring Commercial Building (Mixed Development): 1 Powerhouse by Bandar Utama City Assets Sdn Bhd. This Petaling Jaya development integrates an office tower, hotel, and carpark with a chilled water storage system, sustainable materials, and green features like vertical greenery.
Highest Scoring Industrial Building: Hap Seng Business Park (HSBP) by Hap Seng Logistics Sdn Bhd. This Shah Alam development uses passive design principles for natural daylight and ventilation, achieving a high QLASSIC score for sustainability.
Highest Scoring Residential Building (High Rise): Megah Rise Residensi by PPB Hartabina Sdn Bhd. This luxury serviced apartment offers eco-conscious living with LED lighting, EV charging stations, and water-efficient features.
Sunway Property takes home the coveted title for its dedication to building low-carbon communities. Their commitment is evident through nearly 30 GreenRE-registered projects, including numerous Gold and Platinum achievements.
Source: Hamzah & Yeang
One of the world's most sustainable architects is Ken Yeang, and he is living in Kuala Lumpur. Ken Yeang is a Malaysian architect, ecologist, and author who has made a significant impact on the field of sustainable design.
He's recognized as a pioneer, renowned for his approach that integrates ecological principles directly into building structures. This "applied ecology" philosophy promotes environmentally sensitive solutions, aiming for carbon neutrality and energy efficiency.
Yeang's innovative ideas go beyond theory. He focuses on creating buildings that exist in harmony with nature, effectively addressing contemporary environmental challenges.
Uniquely, he embodies the roles of researcher, designer, builder, and writer, bringing a holistic perspective to his work.
Yeang's impressive academic background includes training at the Architectural Association in London and a doctorate from Cambridge University, which later became his influential book "Designing With Nature."
His achievements are further underscored by a prestigious collection of awards, including the Aga Khan Award, the Prinz Claus Award, and the Gold Medal from the Malaysian Institute of Architects.
The recognition extends beyond the architectural community, with The Guardian naming him one of the 50 people who could save the planet. Ken Yeang's dedication to green architecture positions him as a true visionary in the field.
According to PropertyGuru Market Outlook 2024, Malaysia's property scene is changing!
People are more aware of climate change, with floods forcing people from their homes in November 2023. This is making property seekers think green; a study of PropertyGuru's about consumer sentiment showed that 30% of the respondents want to pay more
Good news! Banks are helping. They're offering special loans for developers who build green properties. For example, one bank approved RM6 billion in sustainable financing.
There's more to sustainability than just being green. Some developers are working with banks to help women buy homes, like a program offering loans over RM500,000 specifically for female customers.
This trend is exciting! With people wanting green homes and banks supporting developers, we can expect a rise in eco-friendly properties, making Malaysia's real estate future more sustainable.
Okay after all the information you just read about sustainability in the real estate market is it now time for the question: Should you buy a sustainable property or just a regular one and not look for sustainable development?
Sustainable properties prioritize the environment. They use recycled or sustainable materials, are designed to be energy and water efficient, and minimize waste throughout construction and demolition.
This translates to lower operational costs, potentially higher property values, and a positive impact on the environment.
While there can be challenges with upfront costs and material availability, the long-term benefits are undeniable. With rising awareness of climate change and increasing consumer demand for eco-friendly properties, sustainable developments are poised to become the future of Malaysia's real estate market.
Backed by government initiatives, financial incentives, and a growing preference for green living, sustainable properties offer a win-win situation for both residents and the environment.
So if I looking to what you can buy better for your long term investment is that sustainable properties. It is the future of the real estate market on global niveau and if your not investing in it now you have to do it in a couple of years.
Sustainable properties offer a compelling combination of environmental responsibility, financial benefits, and future-proof investment potential. With Malaysia's real estate market primed for growth in sustainable development, there's no better time to consider a sustainable property.
By choosing a sustainable property, you're not just making a smart investment, you're contributing to a greener future for Malaysia.
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