PETALING JAYA (July 19): Kuala Lumpur high-end condominium market price correction continues due to weaker demand and rental growth remains under pressure due to rising inventory in existing and newly built segments, said Knight Frank Malaysia’s report.
In its report titled “Real Estate Highlights - first half of 2021”, which was released today, the property consultancy firm said the overall interest in the residential sector for 2021 is likely to remain subdued until the health crisis is brought fully under control.
According to the report, a total of 1,990 condominium units valued at RM1.50 billion changed hands in the first quarter of 2021. The figures reflect a 18.5% and 29.6% increase in volume and value of transactions year-to-date (1Q2020: 1,680 units valued at RM1.16 billion) respectively.
As of 1H2021, the cumulative supply of high-end condominiums or residences in Kuala Lumpur stood at 1,777 units following the completion of six projects. Another eleven projects, scheduled for completion by 2H2021, will collectively contribute some 6,979 units to Kuala Lumpur’s cumulative high-end residential stock.
In the primary market, the average gross selling prices of new high-rise residences generally ranged between RM750 psf and RM960 psf. New developments in popular residential locales such as Bangsar, Mont’Kiara and Sri Hartamas continue to command good prices.
In the secondary market, the locality of Damansara Heights is the only exception where the selected schemes monitored registered higher average prices (on psf basis) when compared to 2H2020 while in the locality of Mont’ Kiara, the prices of sampled properties were relatively stable during the review period.
Elsewhere, in the other localities, the prices of high-end residential units remained under pressure, said the report.
The property consultancy firm noted that asking rents for selected schemes monitored in KL City, Ampang Hilir or U-Thant and Bangsar declined marginally. Meanwhile, in the localities of Damansara Heights and Mont' Kiara, the asking rentals remained in the positive territory.
Moving forward, the overall rental market is expected to remain under pressure due to weaker leasing demand. Tenants looking for affordable rental options continue to be spoilt for choice. It is worth mentioning that the country has relaxed its entry ban on certain categories of expatriates and their dependents as well as professional visit pass holders since September 21, 2020, said the report.
Pent-up demand from buyers who are looking for an upgrade
Knight Frank Malaysia managing director Sarkunan Subramaniam said there were fewer completions and launches in 1H2021 as the strict containment measures delayed construction works, project delivery and completion of real estate transactions.
“In the secondary market, no property viewings and on-site surveys have been allowed since June,” he noted.
Nevertheless, Knight Frank Malaysia deputy managing director Keith Ooi observed that there appears to be pent-up demand in the housing market evident by the short burst of recovery in market activity when movement restrictions were temporarily lifted.
“The economy is still in its recessive phase and market confidence is expected to return gradually by early 2022 as buyers and financiers are all on cautiously optimistic mode. The property market is widely expected to start recovering on the back of a more positive outlook (following recent acceleration in vaccine drive) and strong interest from domestic investors shifting from the stock market to safer and less volatile alternative investment products,” Ooi added.
Meanwhile, Sarkunan also highlighted that the general buyer focus has now shifted from investment towards creating a haven to live, relax and work in comfort due to the ‘Stay at Home’ orders amid the various phases of MCO.
“Thus, potential buyers and investors who have the financial capability may be enticed to enter the housing market - to buy a home for their own stay, for an upgrade, for investment etc. - taking advantage of the price discount, attractive deals, stamp duty exemption as well as the current low interest-rate regime.
Furthermore, the Covid-19 pandemic has also fuelled demand for residential properties especially new landed housing outside the city – in established and upcoming suburbs with good connectivity where prices are more affordable and competitive. With the potential shift to hybrid work arrangements post pandemic, buyers are seeking ideal living spaces with a higher emphasis on functionality and comfort.,” he added.
To recap, several key property-related policies and incentives have been announced under the various stimulus packages such as the extension of the Home Ownership Campaign (HOC) until 31 December 2021 as part of the PEMERKASA+ Package and reintroduction of the 6-month moratorium on bank loans for all individuals and SMEs under the PEMULIH Package.
Other accommodative policies include the current record low-interest-rate environment with OPR remaining at 1.75%, the exemption of Real Property Gains Tax (RPGT) for up to three residential properties for Malaysian individuals until the end of 2021 and the uplift of a 70% margin of financing limit for the third housing loan onwards during the HOC period.
To date, an estimated 34,354 residential units worth RM25.65 billion were sold from 1 June 2020 to 28 February 2021 under the HOC.
Get the latest news @ www.EdgeProp.my
Subscribe to our Telegram channel for the latest stories and updates
TOP PICKS BY EDGEPROP
Garden Hills Residences @ Taman Jaya
Nilai, Negeri Sembilan