THERE is good news and bad news on the Klang Valley property front.
As in previous years since the 1997 financial crisis, the residential sector is expected to be the pillar for this year's property market, a C H Williams Talhar & Wong International Property 2003 report says.
The bad news is that the US-Iraq standoff is casting a pall over the market, so this year's overall property outlook will be difficult to predict, says C H Williams Talhar & Wong deputy managing director Goh Tian Sui.
How long is this period of uncertainty going to last? As it is, a couple of prospective purchasers of Desa Park City are saying that they would like to wait until March 17 (the deadline for Iraq to disarm), before making a decision.
While having said that, the fact that more than 15 per cent of the 160 units launched at Desa Park City were sold in two days is really not bad at all, Goh says.
The strata-title park homes were priced between RM400,000 and RM600,000.
So while it is difficult to predict what the direction the property will take, what is certain is that residential sector will be the top performer when compared to other sectors in the industry, says Goh.
Bandar Utama's two-and-a-half storey will be launched on March 15. That costs about RM588,000, so let's see.
As for the overall residential market, it will be a buyer's market as developers, eager to please, are incorporating extras such as auto gate, built-in, air conditioners, and smart home features.
New locations, because of competition, will require developers to be more innovative. This is expected to continue this year, Goh says.
The introduction of new features and innovative products bodes well for the future of the country's property industry. There may be some overbuilding, though, due to over confidence by some developers.
So there needs to be some caution here, he says.
Some of the new mega housing schemes include Sunway Kayangan, Bandar Botanic Klang, Bandar Puteri Klang, Bukit Bandaraya Shah Alam and Kota Damansara.
Be it wider roads, a home within a park-like environment, developers are trying hard to create demand with terraced landed properties being the most popular.
Some of the new launches in existing housing schemes include Kota Damansara, Bukit Rimau, Bukit Jelutong, TTDI Jaya Shah Alam, Putra Heights, USJ and Ara Damansara. These townships are in Selangor.
The recovery of bungalow prices in prime residential locations of Bangsar, Damansara Heights and Kenny Hills in Kuala Lumpur to pre-crisis levels also bodes well for the residential sub-sector. The report also says that prices have somewhat stabilised in other locations.
As for Kuala Lumpur addresses, high-end properties in selected locations were in demand and developers responded by offering innovative products such as Desa Park City, Bangsar Hill and Tijani.
In terms of types of housing, the report says that double-storey terraced remains the most popular while semi-detached and detached houses segment in Petaling Jaya, Subang Jaya and Shah Alam recording slight price increases.
Vacant bungalow lots in good locations are also popular among the upgrading market. Land scarcity has also resulted in a concentration of high-rise.
And now for the bad news. While residential sector stays on the ball, the other sectors retail and office, commercial and industrial and hotels will not be all that exciting. They were not last year, and they are not expected to resuscitate this year.
Office and retail
The surplus will take some time to clear. There are exceptions, however. In Kuala Lumpur, three new buildings with a cumulative supply of 95,410 sq metres (m) entered the market last year: TH Perdana (35,670 sq m), Maju Junction (33,400 sq m) and Selbourne City (26,300 sq m), bringing the total supply to 4.7 million sq m of office space.
This additional stock has not adversely affected the occupancy rate. The public sector and other establishments took up a large portion of the new space. There are also those that have upgraded into newer buildings.
Three new buildings are expected to be completed this year bringing another 75,760 sq m into the market. These are Menara Marinara, Yayasan Tun Razak and a yet to be named building at Jalan Raja Laut.
The Petaling Jaya/Subang Jaya office premises as at 2002 stands at about 748,000sq m, unchanged from previous 2001. The take-up rate of retail space in Selangor improved last year. Rentals remained stabilised, due to lingering oversupply situation.
Commercial and industrial
There is not much improvement in demand for commercial and industrial properties in Selangor except for properties in prime locations. Buildings remained unoccupied despite low rental levels. The situation is expected to persist throughout this year, what with the various global uncertainties. There was little activity in Kuala Lumpur's industrial scene.
Owners in prime areas like Jalan Tuanku Abdul Rahman, Bangsar Baru (Telawi), Desa Hartamas, Brickfields and Jalan Ipoh to continue to hold on to their properties. Shop houses in less-happening places are expected to have high vacancy rates. In Selangor, demand and prices for modern shop houses and shop offices in prime locations remained stable.