Growth amidst a slowdown

WHILE many continue to be cautious about the property market due to the weak market sentiment over the past two years and while lending guidelines remain tight, investors may be encouraged to know that there are some condominiums selling below RM500,000 that saw double-digit capital growth last year on the secondary market.

Where are these non-landed properties that enjoyed strong growth even in a slowdown?

According to the National Property Information Centre’s (Napic) analysis of its data, there are 13 areas in Selangor with condos priced below RM500,000 in the sub-sale market that enjoyed an annual capital appreciation of over 10% in 2015.

Napic has categorised condominiums as high-rise residential developments with strata titles, joint management bodies and facilities such as a gym, swimming pool and multipurpose hall, among others.

The Top 10 condominiums (as defined by Napic) which were tagged less than RM500,000 in Selangor and enjoyed the highest price growth year-on-year (y-o-y) last year were shortlisted from Napic’s list. Among them were condos in Bukit Antarabangsa in Ulu Klang, Seksyen 7 and 9 in Shah Alam, Seksyen 10 in Kota Damansara and Kampung Pasir Bahru in Puchong.

Bukit Antarabangsa

Interestingly, the four condos which recorded the highest y-o-y price growth ranging from 13.6% to 18.4% were all in Bukit Antarabangsa, namely Puncak Athenaeum, Kyoto Garden, Oakleaf Park and Wangsa Heights. These are mainly old condominiums which are between 15 to 30 years old.

Real estate agent and currently Axis REIT Managers Bhd head of investments Siva Shanker tells TheEdgeProperty.com that the properties in Bukit Antarabangsa have been overlooked by investors for the past few years.

However he cautioned that, “The pricing of below RM500,000 may seem like a bargain for buyers, but the negative perception of Bukit Antarabangsa may cap price growth”.

Located in Ulu Klang, Bukit Antarabangsa was once regarded as an elite residential area with hill views. However, the collapse of Highland Towers in 1993 and subsequent landslides in 1999 and 2008 have affected demand for properties in this hillside enclave.

“The challenge is to get rid of the perception of the high erosion risk of the hilly area and to regain buyers’ confidence in this place. Once the negative perception wears off, we may see even more
spectacular growth here,” says Siva.

Oregeon Property Consultancy Sdn Bhd managing director Wong Wen Chet notes that the lack of new housing supply has pushed up prices in the Ulu Klang area.

“Most homeowners here are owner-occupiers. The lack of amenities and public transport here are also why the area has failed to attract investors,” he explains.

Meanwhile JS Valuers Research and Consultancy Sdn Bhd director Chan Wai Seen says Bukit Antarabangsa is a highly popular residential area for homebuyers due to its proximity to highways and the Kuala Lumpur city centre.

Bukit Antarabangsa is accessible via the Kuala Lumpur Middle Ring Road 2 (MRR2), Karak Highway, the Shah Alam Expressway (KESAS), and Duta–Ulu Klang Expressway (DUKE). It is about 12km to 15km away from the Kuala Lumpur city centre.

“The vast greenery and hilly terrain offer attractive views and serenity. However, if there are no clear development guidelines and measures to ensure soil stability in the neighbourhood, landslides will still be a concern among buyers,” he adds.

TheEdgeProperty.com data shows that the current average asking price for condos in Ulu Klang is about RM255,867 or RM303 psf.

According to listings in TheEdgeProperty.com, the average asking price for Puncak Athenaeum is about RM380,000 or RM215.30 psf; Oakleaf Park is about RM245,000 or RM274.87 psf; Wangsa Heights is about RM363,000 or RM202.68 psf; and Kyoto Garden is about RM350,000 or RM240.88 psf.

Ampang and Shah Alam continue to rise

Ukay Perdana and Taman Bukit Indah in Ampang as well as Seksyen 7 and 9 in Shah Alam are also home to condos with double-digit growth ranging from 10.6% to 11.7% last year.

The condos which enjoyed good capital appreciation include Kristal View Condominium in Seksyen 7 and Kemuncak Condominium in Seksyen 9, Shah Alam. Over in Ampang, Spring Ville condo in Ukay Perdana and Emerald Hill in Taman Bukit Indah were among the top performers.

Chan notes that condos which are located within established areas with a high population density such as Ampang will attract homebuyers.

Both Ukay Perdana and Taman Bukit Indah are mature townships, about 12km to 14km away from KLCC.

TheEdgeProperty.com’s analysis of current listings shows that the condos in the Ampang area have an average asking price of RM487,580 or RM442 psf.

According to recent listings, the average asking price for Spring Ville in Ukay Perdana is RM253,444 or RM345.98 psf, while for Emerald Hill it is about RM462,500 or RM371.56 psf.

On Shah Alam’s growing potential, Wong from Oregeon Property says the industrial activities in Shah Alam have not only created more job opportunities but are also spurring growth of the local population, which in turn raises demand for homes.

Seksyen 7 and 9 are located 7km to 13km away from the Hicom Industrial Estate and within 20km from industrial areas which are scattered around Shah Alam and Setia Alam.

“More highways are connecting the residential areas in Shah Alam and the improved accessibility is encouraging more people to work and live here,” Wong explains. Based on listings on TheEdgeProperty.com, the average asking price for Kemuncak Condominium is about RM435,833 or RM300.09 psf while Kristal View is asking for RM510,000 or RM443.94 psf. In general, the average asking price for condos in Shah Alam is about RM409,846 or RM468 psf.

Besides Shah Alam, Wong foresees places with industrial parks to become popular townships, such as areas close to the Rawang Integrated Industrial Park, the Kundang Industrial Park and Sungai Buloh Industrial Park.

Puchong and Kota Damansara still the darling of investors

Another interesting finding in the Top 10 list of double-digit growth condos in Selangor is that there are only two condos that have access to light rail transit (LRT) or mass rapid transit (MRT) stations. They are Koi Tropika in Puchong and De Rozelle Condominium in Seksyen 10, Kota Damansara.

Hence, for these two condos, besides their low entry cost, the rail transport infrastructure could have impacted price growth here, says City Crest Realtors principal Darren Khor.

“From the investor’s perspective, Puchong and Kota Damansara in general have great potential as these two places are located along the public rail transport alignment,” he adds.

Khor believes once the LRT/MRT lines are fully operational, the projects along the lines will enjoy capital appreciation of 20% to 30%.

The Ampang LRT Line extension’s four stations in Puchong — IOI Puchong Jaya, Pusat Bandar Puchong, Taman Perindustrian Puchong and Bandar Puteri Puchong — have commenced operation as of end-March this year. Koi Tropika is located at Kampung Pasir Bahru Puchong next to Bandar Puteri Puchong and close to the Taman Perindustrian Puchong and Bandar Puteri Puchong LRT stations.

Based on TheEdgeProperty.com listings, the current average asking price for Koi Tropika is RM375,102 or RM373.91 psf.

In general, condos in Puchong are asking for an average of RM480,955 or RM414 psf.

Meanwhile, Seksyen 10 in Kota Damansara has access to the Surian and Kota Damansara MRT stations. Kota Damansara has become a property investment hotspot especially with the upcoming MRT Sungai Buloh-Kajang Line, which is slated to start operations by the end of this year.

According to TheEdgeProperty.com, the average asking price for condos in Kota Damansara is about RM567,026 or RM566 psf.

The average asking price for De Rozelle Condominium is RM415,938 or RM409.68 psf. It is located about 5km to 6km away from the Surian and Kota Damansara MRT stations.

Chan from JS Valuers says projects which are located near to LRT and MRT stations or close to universities and higher learning institutions will provide sustainable rental income for investors.

“However, the market is currently undergoing consolidation hence they may not show significant increases in pricing. Investors have to wait until the infrastructure is completed and for consumer sentiment to improve before the next price uptrend,” he explains.

Do not ask your BFF about the value of your home. Go to The Edge Reference Price to find out.

This story first appeared in TheEdgeProperty.com pullout on June 10, 2016, which comes with The Edge Financial Daily every Friday. Download TheEdgeProperty.com here for free.