Kuala Lumpur’s property market holds steady in most areas

PETALING JAYA: There were no major surprises when it comes to reviewing the property market’s performance for 1H2009. The global economic slowdown brought growth from a gallop to a slow walk but Kuala Lumpur’s property market held steady in most areas, albeit with more dips than spikes.

According to the National Property Information Centre’s (of the Valuation and Property Services Department of the Ministry of Finance) Property Market Report for 1H2009, there were 9,381 transactions totalling RM4.9 million. The residential sub-sector dominated with 78.3% of total market volume. The commercial sub-sector came in at second with an 18.8% market share. By type, condominiums/apartments formed the largest portion of the residential transactions while shops dominated commercial transactions. In terms of pricing, most of the residential, commercial and industrial property transactions where within the RM250,000 to RM500,000 bracket.

Downward figures were recorded across all property sub-sectors except for a 5.3% growth for the commercial sub-sector in 1H 2009.

There were also fewer transactions recorded in 1H 2009 compared with 1H 2008. There were three purpose-built office transactions recorded during 1H2009 (worth RM92.06 million) compared with nine in 1H2008. The three were Wisma Manulife RB in Bukit Damansara, Plaza Magnum in Jalan Pudu and Menara Chan in Jalan Ampang.

Meanwhile, prices for landed residential properties were mixed. In Setapak, prices increased thanks to the opening of the Duta-Ulu Kelang Expressway (DUKE). Prime areas remained sturdy. One-storey terraced homes in Taman Tan Yew Lai and Taman Setapak saw increases of 12.5% and 9.8% respectively.

Two-storey cluster houses in Setapak Jaya and Taman Datuk Senu recorded gains of more then 14%. Two-storey terraced houses in Desa Sri Hartamas firmed up at 6%, recording prices as high as RM900,000. In Taman Tun Dr Ismail (TTDI), prices firmed at RM705,000.

On the other hand, 1-storey terraced houses in Bukit Anggerik, Cheras, recorded a dip of 5%. In Bandar Baru Seri Petaling, 2-storey medium-cost units and 2½-storey terraced houses declined by 10% and 4.8% respectively.

Apart from low-costs flats, prices also declined in the high-rise residential property sub-sector. Flats, apartments and condominiums experienced decreases ranging from 2.4% to 19.1%. Among those that fetched lower prices were flats in Taman Shamelin Perkasa, Taman Segar and Rampai Court, down by 4.9% to 7.5%.

Apartments in Menara Manjalara, Setapak Ria and Genting Court succumbed to declines of 2.4% to 7.6%. As for condominiums, OBD Garden recorded the highest decline of 19.1%. Other two-digit contractions included Desa Villa Condo, Case Desa Condominium, The Residence and Tivoli villas. On a positive note, there were price increases in Villa Puteri, The Saffron and Kiara Park of between 4% and 9.4%.

The prices of shops in the commercial sub-sector, meanwhile, are on an uptrend. Two-storey shops in Happy Garden saw increases of 27% while those at Jalan Pudu increased by 9.1%, fetching between RM630,000 and RM800,000. Three-storey shops in Taman Sri Rampai and Desa Melawati experienced gains of 21% and 25% respectively, thanks to the DUKE opening earlier this year. Notable increases of 16% were recorded in Bandar Baru Seri Petaling at RM1.45 million. Shops in TTDI firmed at a high of RM2.3 million.

Overall, the rental market was stable in Kuala Lumpur. Rents for one-storey terraced homes ranged from RM600 to RM700 per month. Rentals in Taman Bunga Raya remained unchanged at RM1,500 per month, thanks to demand from Universiti Tunku Abdul Rahman students. Two-storey terraced houses in Taman Setiawangsa stablised at a high range of between RM1,400 and RM1,600 per month. Marginal increases were noted in Kepong at 2.3% to 3%.

Rental gains were recorded for high-rise units in KL’s city centre. Low-cost flats in Bandar Baru Sentul and Taman Miharja recorded gains of 5.3%. Similarly, apartments in the city centre, namely Palm Court, Warisan City View, Pangsapuri Melur and Pangsapuri Mawar recorded growth of 11.1% to 17.6%. Condominuims, on the other hand, maintained last year’s rental levels.

Ground floor shop rentals were stable in the commercial sub-sector. Jalan Tuanku Abdul Rahman and Jalan Masjid India continue to obtain premium rentals of between RM20,000 and RM25,000 per month. There was sustained demand in Bangsar Baru, Desa Sri Hartamas and Lucky Garden, with rentals from RM6,000 to RM 15,000 per month.

Rentals were also stable in the retailing sub-sector. Suria KLCC topped the list with rentals of between RM592 and RM753 per sq metre (psm) for its lower ground floor units. The KL Pavilion recorded rentals of RM65 to as high as RM990 psm for its first floor units.

There were also stable figures for the office sub-sector, with rentals of Petronas Twin Towers remaining unchanged at RM97 to RM129 psm.

The residential overhang situation in Kuala Lumpur improved as numbers reduced from 2,532 units in 2H2008 to 1,107 in 1H2009, down by 56.3%. The overhang value was reduced by 64.2% to RM338.03 million. Unsold units under construction, however, increased from 3,276 units in 2H2008, to 4,286 -- up by 30.8%. For unsold units which are still not constructed, the figure grew by 42.9% from 844 units in 2H2008 to 1,206 in 1H 2009. Most of the unsold units were serviced apartments and condominium/apartments.

For the shop sub-sector, the overhang figure increased from zero in 1H2008 to 80 units in 1H 2009 with a total value of RM64.93 million. A similar pattern was witnessed for unsold under construction shops, from zero in 1H2008 to 294 units in 1H2009. Conversely, the figure for unsold and not constructed shops went down from 50 units in 2H 2008 to 11 in 1H 2009. There was no overhang in the industrial sub-sector.

The retail sub-sector strengthened in 1H2009 with the absence of new completions and an improvement in take-up. Overall, occupancy of shopping complexes stood at 84.7%, up from 83.9% in 2H2008 as more space was taken up (about 170 608 sq ft).

Office space saw occupancy firming up from 82.4% in 2H2008 to 84.4%, thanks to the approximately 2.13 million sq ft take-up rate recorded in 1H2009.

The leisure sub-sector didn’t fare well in 1H2009. Three- to five-star hotels registered an overall occupancy rate of 61.9%, lower than the 67.6% and 70.5% registered in 1H and 2H 2008 respectively. Nevertheless, the overall occupancy was higher than the national average of 54.8%.

Construction activity was sluggish across the sub-sectors compared with 2H 2008, with the exception of the office sub-sector. For the residential sub-sector, completions, starts and new planning supply were down. Similarly, the shop sub-sector did not witness any completions, while starts and new planned supply were fewer.

There were, however, more completions and starts in the industrial sub-sector. There was no industrial building plan that was approved in the review period. The retail sub-sector was equally quiet with the absence of completions, starts and new planned supply. Conversely, two purpose-built office buildings were completed in 1H2009 while one obtained building plan approval, but there were zero starts.