KL high-end condos outlook cautious: Knight Frank

KUALA LUMPUR (Aug 5): The high-end condominium market segment in Kuala Lumpur is expected to be cautious with lower sales volume and modest price growth in the short to medium term, according to the Knight Frank Malaysia Real Estate Highlight 1H2015.

Knight Frank expected developers with niche high-end residential products to review their pricing and marketing strategies and widen their target catchment by marketing overseas, while those with large landbank will continue to focus on affordable and mass housing to drive sales.

Evidence of softening demand in the high-end condo segment is growing as buyers turn cautious amid an expected supply of about 3,725 units coming on-stream by 2H2015.

The cooling measures introduced by Bank Negara Malaysia have played its part – in 1H2015, the volume of transactions in the condo/apartment segment in KL dipped 18.9% to 1,694, from 2,088 in 4Q2014.

Knight Frank noted that the expectation of home buyers rushing to buy properties before the implementation of the Goods and Services Tax did not materialise.

“In KL, the volume of residential transactions declined sharply by 21.2% in 1Q2015 when compared to the previous quarter, likely attributed to the cautious economic and market sentiment coupled with stringent lending guidelines,” said Knight Frank.

Meanwhile, KL was ranked seventh in Asia Pacific and second in Southeast Asia in the inaugural Sustainable Cities Index 2015 by Arcadis.

“The index indicated that Kuala Lumpur performed best in terms of low property prices and good work-life balance,” said Knight Frank.

Moving forward, the upcoming mass rapid transit, light rail transit extension, the Malaysia-Singapore high speed rail link as well as rapid residential developments in the inner city are expected to help transform Kuala Lumpur into a sustainable and liveable city.