KUALA LUMPUR: The Klang Valley market for landed residential is expected to experience a slowdown in 2015.
Despite that, prices of landed residential properties are unlikely to decrease, especially medium-priced houses where demand is most acute.
Annual growth of landed property in the Klang Valley for 2015 is forecast at 1.5%.
“This value is actually very much below the nation’s population growth of 2.8% in the Klang Valley.
Hence, supply of landed property was lower than the demand, which in turn put more pressure on the pricing,” said CH Williams Talhar & Wong managing director Foo Gee Jen (pic).
“Most new launches at new growth areas like Semenyih are now packaged very small, where developers are launching 150-200 units in each phase instead of 500-1000 units.
“Developers are trying to create more excitement by doing so, as well as ensuring that all units are sold out,” he added.
During the Property Market Report 2015 launch here yesterday, Foo mentioned that the volume of property sale will decrease, due to weak sentiments of buyers.
The impact of goods and services tax (GST) will be minimal, as there will be a 3.5% to 4% increase in residential property prices, stemming from the increase in operational and labour costs.
Apart from that, the trend of high-rise residential property is moving from condominiums to serviced residences, which made up 54% of high-rise residential property in 2014.
The average occupancy rate of high-rise residential property in Kuala Lumpur remained stable in 2014 at 69%.
The completion of new high-rise residential developments in 2015 is expected to decrease the average occupancy rate in 2015 and lower the rental yield. This in turn creates a more competitive rental market, that is favourable to tenants.
Meanwhile, in the office sector, Kuala Lumpur is expected to be the first major city to hit the 100 million-sq-ft mark by the end of this year.
Average prime rents for grade A offices are also expected to stabilise in 2015 as 4.83 million sq ft of office space will be completed this year.
On the other hand, retail malls will be facing heavy competition from new players and increased difficulties in maintaining occupancy rate.
The average rental rate in prime retail malls remained healthy at RM22 per sq ft in 2014, with an average occupancy rate at 85%.
Consumers are expected to be cautious on their purchases after the implementation of GST.
Thus, sales on big items will likely be affected, with overall retail sales expected to be resilient.
“The retail sector will face many challenges due to the large supply of retail space.
Hence, mall owners have to be innovative by bringing new experiences to their mall.
Going to a shopping mall is no longer about buying items or to eat, consumers want a different experience each time they visit a shopping mall,” said Foo.