KUALA LUMPUR (July 26): There are clear signs of improvement in the property market and it is expected to pick up sometime in the second half of this year or the first half of next year, according to real estate consultancy Knight Frank Malaysia.
This follows the historic conclusion of Malaysia’s 2018 General Election coupled with the strong growth momentum of the economy, it said in a statement released with its Real Estate Highlights: 1st Half of 2018.
Knight Frank Malaysia managing director Sarkunan Subramaniam shares that the property market saw a gentle recovery during 1H2018 as more clarity in the policies of the newly elected government unfolded.
“I believe the rents of high-end condominiums will stabilise and prices will hold. However, office rents are expected to remain competitive due to oversupply in certain locations, with the exception of Penang, which has a robust office market with limited existing and incoming supply,” Sarkunan said.
According to the report, the office sector in Penang has registered slight improvements in both occupancy and rent levels in 1H2018.
The outlook of Penang’s office market is expected to remain resilient with no immediate incoming supply and increasing demand, especially from corporations as Penang has the highest approved manufacturing foreign direct investments in the country at RM8.5 billion in 2017.
“I believe foreign investors will be coming back in 1Q2019 as we are expected to have more transparent policies with the new government,” Sarkunan said.
He also foresees the industrial and logistics sector to grow as Malaysia continues to draw healthy levels of investment in the manufacturing and services sectors.
In the high-end condominium segment in Kuala Lumpur, Knight Frank Malaysia’s associate director of residential sales & leasing Kelvin Yip observed that potential buyers and investors are switching away from a “wait-and-see” approach and are genuinely seeking for bargains in the market.
Furthermore, “developers are getting more aggressive in promoting their products by conducting nationwide roadshows. Based on the current trend, we expect the residential market to record more transactions in 2H2018”, Yip shared.
He added that the rental market is believed to have bottomed out as more enquiries have been received recently.
He added that the capital city Kuala Lumpur will remain as a well-liked investment destination among foreigners as prices are still reasonable compared with other major Asian cities.
“Unlike cities such as Hong Kong and Singapore, where foreign buyers are subjected to additional buyer’s stamp duty, Malaysia’s residential market remains relatively investor friendly to foreign buyers,” Yip concluded.
Meanwhile, the KL fringe office market was resilient in 1H2018 with both rental and occupancy levels holding firm despite the oversupply of space in certain locations in the Klang Valley.