C&C Real Property Index: Downturn slows sales of bungalows

Sales of bungalows in the Klang Valley, including those in prime areas, have slowed in the secondary market in line with the slight drop in sales and rents of landed homes in the Klang Valley since October last year. The economic downturn and the anticipated recession this year have made potential purchasers more cautious in purchasing big-ticket items.

“There’s still demand for rented homes in high-end areas like Damansara Heights and Bangsar, but expatriates are no longer spending as much as before for accommodation, so owners have to reduce their rents accordingly. As for sales, although transactions are slow, there are some owners who want to sell as they anticipate an impending recession but, on the other hand, there are also those who are able to hold on,” says Carol Foong, a real estate agent with UPC Properties Sdn Bhd.

In Bangsar and Damansara Heights, Foong estimates that rents have dropped 10%, while sales have dipped slightly in Bangsar and Damansara Heights. However, since the new year, there have been more enquiries coming in, she adds.

“Transactions are slow now but it’ll probably pick up as many people are looking for a good bargain,” says Edmond Tan, principal of Edmond Tan & Co.

Despite the slowdown, demand remains strong for bungalows in high-end prime areas such as Damansara Heights and U-Thant, Ampang. U-Thant is a hot area because it’s where the embassies are located, and is a mature residential enclave in the city centre, he adds. “In Damansara Heights, there is a limited supply of bungalows there. Most owners here are holding on,” he says.

However, there are buyers who prefer to wait until 2H2009, hoping that prices will drop further, says an agent with Chester Properties. He observes that bungalows with asking rents of RM10,000 and above are difficult to let, while bungalows with price tags of RM5 million and above are also not attracting sales.

 



This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 750, April 13-19, 2009.