High-end property buyers seem unaffected by the higher cost of funds, given the recent success of launches in Kuala Lumpur, even at new benchmark prices.
The recent high-end property launches, which include a condominium development and a landed property, have led many property experts to talk about the high take-up rate despite a 25 basis point rate increase earlier this month.
The launch of S P Setia’s 708-unit residential tower, which is part of the KL Eco City (KLEC) project, saw priority customers taking close to three-quarters of the units with a gross floor area (GFA) of between 650 sq ft to 1,200 sq ft, which were priced at around RM1,200 psf, 10 percent higher than the initial price. Surprisingly, the bigger loft units were all sold out, priced at more than RM300 psf.
The demand for luxury condos in prime areas saw YTL Land’s 466 condominiums at Capers@Sentul East, launched last month, sold out in less than one week.
Even landed properties at Desa Park City showed little signs of price relief. It’s Mansions @Park City Heights listed between RM2.7 million and RM7.5 million recorded an extraordinary 86 percent take-up rate at its pre-launch this month, said Maybank-IB.
A major selling point for KLEC and Capers, aside from better security and amenities, has been Kuala Lumpur’s proposed mass rapid transit (MRT) blue line. Work on the main line linking KL and Kajang to the south-east will begin this year and will be completed by 2016.
"Hwang-DBS's Ms Yee, commented that investors responded positively to the MRT, and are eagerly monitoring the development in the Economic Transformation Programme."
The consequent rate hikes are not to detrimentally impact demand, as borrowers will see a subtle increase of RM100 to RM200 per month on the monthly mortgage. However, that Bank Negara Malaysia will raise the overnight policy rate (OPR) by another 50 basis points (BPS) to 3.5 percent this year.
In conclusion, the pricing trend will continue especially within Penang and the Klang Valley. “Anything priced below RM900 psf tends to be (quickly) taken up by locals.”
Monday, May 30, 2011
Sunday, May 29, 2011
No worries of loan Repayment?
Young adults in Malaysia are eager to acquire their first homes under the My First Home programme. However, they are worried that they might have difficulty handling the monthly payments, due to the high cost of living.
Cheaw Wen Guey, a Malacca Multimedia University Research Officer who earns around RM2,100 a month, said he would be comfortable in a home in the outskirts of Kuala Lumpur, provided there was easy access to public transport.
“There should also be other amenities like supermarkets located nearby,” said the.
“For those who earn over RM3,000, the loan amount can be reduced accordingly,” said Nick Ong, a 27 year-old IT consultant. “Likewise, (for) those who earn below RM3,000 (they) can still get the 100 percent loan. I think this is fair.”
Sindhu Kumar, a 27 year-old software engineer, suggested that those who purchased their homes prior to the implementation of the initiative should be allowed to have their loans worked into the scheme.
“This scheme is good, as it encourages younger people to buy homes sooner,” he said.
Chang Kim Loon, Secretary General at the Home Buyers Association, said the scheme ensures adequate, affordable homes and encourages home ownership.
“However, the homes should be fairly located, with proper infrastructure and public transport,” he said.
Kwan Foh Kwai, President of the Malaysian Master Builders Association, "estimated that homes costing RM220,000 will have an average area of 850 sq ft."
Cheaw Wen Guey, a Malacca Multimedia University Research Officer who earns around RM2,100 a month, said he would be comfortable in a home in the outskirts of Kuala Lumpur, provided there was easy access to public transport.
“There should also be other amenities like supermarkets located nearby,” said the.
“For those who earn over RM3,000, the loan amount can be reduced accordingly,” said Nick Ong, a 27 year-old IT consultant. “Likewise, (for) those who earn below RM3,000 (they) can still get the 100 percent loan. I think this is fair.”
Sindhu Kumar, a 27 year-old software engineer, suggested that those who purchased their homes prior to the implementation of the initiative should be allowed to have their loans worked into the scheme.
“This scheme is good, as it encourages younger people to buy homes sooner,” he said.
Chang Kim Loon, Secretary General at the Home Buyers Association, said the scheme ensures adequate, affordable homes and encourages home ownership.
“However, the homes should be fairly located, with proper infrastructure and public transport,” he said.
Kwan Foh Kwai, President of the Malaysian Master Builders Association, "estimated that homes costing RM220,000 will have an average area of 850 sq ft."
Friday, May 27, 2011
Demand On high end property remain strong??
The demand for high-end condominium and serviced residences in Kuala Lumpur remains strong, said Christopher Boyd, Executive Chairman at CB Richard Ellis (CBRE) (Malaysia).
“Take-up rates range from 65 percent-88 percent as of the end of the first quarter of 2011,” he said at the Eastern & Oriental Bhd’s “Invest in Malaysia, Invest in Kuala Lumpur” Forum.
He cited Soho@KLCC and M Suites serviced apartments as prime examples. Soho@KLCC reported 85 percent sales with its 300 condominiums having a selling price of between RM700 psf and RM850 psf. M Suites, located within the Ampang Hilir enclave reported 70 percent sales with 442 service apartments having an average price of RM850 psf.
According to a report by CBRE, the total supply of existing condos and serviced residences, which have an average price of RM350 psf or higher, in Kuala Lumpur rose four percent to 32,742 units since end-2010.
About 44 percent, or around 14,514 units, are located in the Golden Triangle, Ampang areas and the CBD, while 34 percent, or approximately 11,121 units, are located in Mont’Kiara and Sri Hastamas.
Approximately 38 percent of the available condominiums and serviced residences are listed from RM350 psf to RM499 psf, with an additional 38.6 percent listed from RM500 psf to RM799 psf.
Meanwhile, more than 24 percent were listed at RM800 sq ft and up, which is categorised as luxury residential units, with many located in the Suria KLCC shopping centre area.
Mr. Boyd said the average capital values for KLCC, Bangsar and Mont Kiara in Kuala Lumpur – the three main condominium markets – have remained stable since the global financial crisis in 2008.
A CBRE report last year said there were 2,156 transactions for luxury condominiums in KL with an average value per transaction of approximately RM1.09 million.
“Take-up rates range from 65 percent-88 percent as of the end of the first quarter of 2011,” he said at the Eastern & Oriental Bhd’s “Invest in Malaysia, Invest in Kuala Lumpur” Forum.
He cited Soho@KLCC and M Suites serviced apartments as prime examples. Soho@KLCC reported 85 percent sales with its 300 condominiums having a selling price of between RM700 psf and RM850 psf. M Suites, located within the Ampang Hilir enclave reported 70 percent sales with 442 service apartments having an average price of RM850 psf.
According to a report by CBRE, the total supply of existing condos and serviced residences, which have an average price of RM350 psf or higher, in Kuala Lumpur rose four percent to 32,742 units since end-2010.
About 44 percent, or around 14,514 units, are located in the Golden Triangle, Ampang areas and the CBD, while 34 percent, or approximately 11,121 units, are located in Mont’Kiara and Sri Hastamas.
Approximately 38 percent of the available condominiums and serviced residences are listed from RM350 psf to RM499 psf, with an additional 38.6 percent listed from RM500 psf to RM799 psf.
Meanwhile, more than 24 percent were listed at RM800 sq ft and up, which is categorised as luxury residential units, with many located in the Suria KLCC shopping centre area.
Mr. Boyd said the average capital values for KLCC, Bangsar and Mont Kiara in Kuala Lumpur – the three main condominium markets – have remained stable since the global financial crisis in 2008.
A CBRE report last year said there were 2,156 transactions for luxury condominiums in KL with an average value per transaction of approximately RM1.09 million.
Sunday, May 22, 2011
Review of Malaysia property by Gavin Tee
Gavin Tee: In my opinion, I would say that a major mass housing boom will not likely occur for the entire real estate industry. But there might be oversupply in big cities such as Klang Valley, Penang, Kota Kinabalu, Melaka and Johor. The effect is most visible in globalized areas such as KLCC, Bukit Bintang and the surrounding business districts.
Besides, I believe that tourist areas might also be affected by the boom.
My reasoning is that when the international real estate market and economy recover from the downturn, it will spur global trading and economic activities, which will result in more foreign investors investing in our local real estate market. This might lead to the housing boom.
However, this is only applicable to certain areas where the foreign investors are interested in and it is not an overall market boom. In fact, based on Malaysia’s history, it is rare that a general boom or general bust would strike our property market.
Are we in the early stage of the "Super Cycle"? I would say that our current market conditions do not depict such a scenario yet. Perhaps it is happening to the high-end condos but I still think that the signs are not strong.
Government policies and foreign investment guidelines are crucial factors in this matter. We will have a better view after the budget 2011 is released. Perhaps by March 2011, we will be able to attract more
foreign investors and if that happens, it might be the beginning of a "Super Cycle".
In addition, I believe that 2012-2013 would be a high peak for commercial properties, high-end condos and landed properties. I don’t think that the general secondary market will enjoy the benefit of the "super cycle". And, I don’t think there will be a slump after the cycle, especially for medium-cost houses. There might only be minor price adjustments for medium cost houses even if other types of properties are facing the boom.
Moreover, I foresee that institutional or international players (big players) will be more interested to invest in areas that are more globalized such as locations with high-end properties and commercial properties. These prime assets in the market will eventually be owned by a few giant corporations.
In the next few years, the rental market will be the leading real estate market. Unfortunately, in Malaysia, our management skills and knowledge are not up to international standards yet. So, rental management business could be one of the rising industries when the super cycle comes.
In addition to that, property consultant Gavin Tee has predicted the following:-
Note: Gavin Tee is founder and President of SwhengTee International Real Estate Investors Club, and has more than 20 years of experience in property & retail marketing in both the United States & Malaysian markets. He has written a book on Property Rental in Malaysia and is host of a Chinese TV show on real estate in Malaysia
Besides, I believe that tourist areas might also be affected by the boom.
My reasoning is that when the international real estate market and economy recover from the downturn, it will spur global trading and economic activities, which will result in more foreign investors investing in our local real estate market. This might lead to the housing boom.
However, this is only applicable to certain areas where the foreign investors are interested in and it is not an overall market boom. In fact, based on Malaysia’s history, it is rare that a general boom or general bust would strike our property market.
Are we in the early stage of the "Super Cycle"? I would say that our current market conditions do not depict such a scenario yet. Perhaps it is happening to the high-end condos but I still think that the signs are not strong.
Government policies and foreign investment guidelines are crucial factors in this matter. We will have a better view after the budget 2011 is released. Perhaps by March 2011, we will be able to attract more
foreign investors and if that happens, it might be the beginning of a "Super Cycle".
In addition, I believe that 2012-2013 would be a high peak for commercial properties, high-end condos and landed properties. I don’t think that the general secondary market will enjoy the benefit of the "super cycle". And, I don’t think there will be a slump after the cycle, especially for medium-cost houses. There might only be minor price adjustments for medium cost houses even if other types of properties are facing the boom.
Moreover, I foresee that institutional or international players (big players) will be more interested to invest in areas that are more globalized such as locations with high-end properties and commercial properties. These prime assets in the market will eventually be owned by a few giant corporations.
In the next few years, the rental market will be the leading real estate market. Unfortunately, in Malaysia, our management skills and knowledge are not up to international standards yet. So, rental management business could be one of the rising industries when the super cycle comes.
In addition to that, property consultant Gavin Tee has predicted the following:-
- Price psf of luxury condos in Malaysia might hit RM5K within the next 5 years
- Real estate market in Kuala Lumpur would mature and hit its highest point by 2020
- Toursim-related properties in Malaysia would become the most expensive by 2018
- Iskandar Malaysia would have the second highest property values after Kuala Lumpur by 2016
- Hotspots for the Klang Valley would include Bukit Bintang/Jalan Stonor, Maluri/Cochrane, Sentul, KLCC vicinity, U-Thant, Sungai Buloh, Ulu Klang/Melawati, and Bukit Jalil/Equine
- For the rest of Malaysia, the hot spots would include Kota Kinabalu, Penang, Malacca, Iskandar Malaysia, Cyberjaya, Kuantan, Ipoh, Muar and Klang
Note: Gavin Tee is founder and President of SwhengTee International Real Estate Investors Club, and has more than 20 years of experience in property & retail marketing in both the United States & Malaysian markets. He has written a book on Property Rental in Malaysia and is host of a Chinese TV show on real estate in Malaysia
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