FIRST-TIME Malaysian home owners will power consumer spending with their purchase of home furnishings and other household goods in the next five years.
Spending on household goods is expected to hit 55.6 billion ringgit (S$18.1 billion) by 2023, according to Fitch Solutions research, for a compound annual growth of 7.6 per cent from 2019.
Furniture, home appliances and utensils make up the bulk of household spending, with the glass, tableware and utensils segment projected to grow the fastest among household goods.
Fitch analysts noted that home-grown Mr DIY and multinationals such as Ikea and Harvey Norman will likely benefit - including in the East Malaysian regions of Sarawak and Sabah, where ongoing mega-infrastructure projects should create jobs and drive demand.
Fitch’s analysis came alongside an assessment by AmInvestment Bank that “the key problem in the current soft property market is the supply-demand mismatch, with many potential buyers having difficulties in obtaining loans due to their already high debt service ratios”.
Still, the Fitch analysts wrote: “The key driver of this strong growth in spending on household goods stems from the country’s real estate growth outlook, especially the projected demand among first-time buyers, who will be furnishing their new properties for the first time.”
They pointed to a property market recovery, as well as public initiatives such as the national Home Ownership Campaign for affordable housing.