TAMAN Tun Dr Ismail and Bangsar are two hot freehold addresses in Kuala Lumpur, especially for landed residential property.
Despite having been around for a long time, these two established townships have remained sexy to investors and owner-occupiers, due in part to their strategic location, connectivity and a scarcity of land in both addresses.
According to TheEdgeProperty.com data, terraced houses of two storeys and above in TTDI were transacted at an average of RM1.58 million in 4Q2015. Currently, listings on TheEdgeProperty.com have prices averaging RM1.75 million.
It must be noted, however, that plot sizes, built-up areas and the condition of the houses could vary and all these considerations would impact on pricing.
Over at Lucky Garden in Bangsar, TheEdgeProperty.com’s data shows the average transacted price in 4Q2015 for 1-storey linked homes to be at RM1.07 million. Current listings have put the average price at RM1.3 million.
Now rewind to a quarter of a century ago, to 1991 – that would be the year when the 30-year-olds today were just five years old. Did you know that 2-storey terraced TTDI houses back then were changing hands for around RM230,000? And that 1-storey linked houses in Bangsar went for an average of only RM158,000 each?
Retiree C Selvanantham and his wife, for instance, are currently staying in a 2-storey linked house in TTDI which he bought from the developer in the early 1980s for RM169,000.
TTDI then was not exactly a very attractive address. Selvanantham recalled how coming up with the down payment was not easy but as we now know, his foresight has paid off handsomely.
Over in Bangsar, in 1984, a medical specialist paid RM150,000 for a 1-storey linked house on the secondary market. In 1997, he sold it for a whopping RM375,000! But he reinvested the gains in a semi-detached house in Damansara Heights. What a great investment move that was!
According to TheEdgeProperty.com, semi-detached houses of two storeys and above in Damansara Heights are listed at an average of RM4.77 million while the average transacted price was RM5.04 million in 4Q2015.
In the last 25 years, average prices of
2-storey terraced houses in TTDI have expanded about six times while that of 1-storey linked homes in Bangsar have grown eight times!
True to market expectations, rentals, on the other hand, have only managed to grow mildly, putting pressure on yields. This is nothing new for landed property which is sought after for its capital appreciation as opposed to yields.
There should not be any doubt that property located in a good location is more resilient to market downturns. While it will not be spared from prices going south, expect the bounce back to be quicker and sharper.
This is clear from the property prices recorded over the years (see chart). Prices in both TTDI and Bangsar have not only survived the two market downturns in the last quarter century, but went on to set new benchmarks.
Unless something drastic occurs at an established address, prices can be expected to hold and move up higher when positive sentiments return.
Au Foong Yee is the managing director of The Edge Communications and The Edge Property. She was formerly the executive editor of Property and Retailing at The Edge Malaysia. She can be contacted at [email protected]
This story first appeared in TheEdgeProperty.com pullout on May 6, 2016, which comes with The Edge Financial Daily every Friday. Download TheEdgeProperty.com here for free.