City&Country: Auction-- Prices picking up in most of Klang Valley

Auction sales of most Klang Valley properties, including those once thought to be in undesirable areas, are picking up.

In the prime areas, says licensed auctioneer M Mogan, people are buying properties “like nobody’s business and prices are going haywire”.

He adds that speculative activity has also increased in the real estate market.

Homebuyers could be motivated by the government’s My First Home Scheme, where those earning less than RM3,000 per month can obtain 100% financing from selected financial institutions for houses priced between RM100,000 and RM220,000 with a repayment period of 30 years.

Mogan cites Cheras, Damansara and Petaling Jaya as the hot spots that continue to attract buyers. “The reserved price of an auction property is usually based on its current valuation or market value,” he says.

Auction Data Sdn Bhd director Gary Chia says the number of bidders for auction properties in 1H2011 was much higher than in the same period last year while the number of transactions also improved.

He notes growing demand for properties in Balakong, Bangi and Rawang. “The sold prices for properties located in these areas are improving and the price trend for auction property transactions is close to normal market value.

“The auction transaction value of properties in prime areas may even exceed the market value due to their limited supply there,” says Chia.

In May and June 2011, a total of 5,216 and 5,580 properties were up for auction respectively in Malaysia. Some 2,903 properties went under the hammer in the Klang Valley in May and 2,865 units in June. Landed residential properties in the Klang Valley accounted for 760 units in May and 759 units in June.

Licensed auctioneer Mohamad Nordin Osman notes  more demand for properties in Bukit Beruntung, Klang and Rawang in the auction market, saying that he has seen higher take-ups in these areas since January.

The considerations for auction properties are the same as for new properties and properties on the secondary market, say auctioneers.

“In the auction market, you need to look at several things — the type of property, the location and the land title. Shah Alam, Subang Jaya, Gombak and Petaling Jaya are doing well. People will ‘fight’ to acquire these properties,” says Mohamad Nordin.

City & Country conducted a survey of landed properties priced from RM250,000 that were up for auction in the Klang Valley in May and June 2011. Among the notable ones was a 1,540 sq ft intermediate 2-storey terraced house in Wangsa Maju that was sold for RM480,000 — some RM110,000 above its reserve price of RM370,000.

Another notable sale was that of a 12,386 sq ft, 3-storey detached house with a sub-basement level in Ampang Hilir, which was auctioned for RM5.6 million. Its reserve price was RM5.4 million.
A 2,100 sq ft, 2-storey corner terraced house with extra land in Taman Puchong Prima, Puchong, did not receive any bids and is still on the market with a reserve price of RM450,000.

Another property that did not receive any bids is a 2,982 sq ft, 2-storey semi-detached house in Taman Pinggiran Batu Caves, Batu Caves, that is priced at RM710,000.

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 872, Aug 22-28, 2011

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