Higher value in auctioned units

More being auctioned: Leslie says the number of units being auctioned has risen since the onset of GST.

NG Chan Mau & Co Sdn Bhd, one of the largest auction houses in the country, says the number of auctioned units rose 1.22% to 29,385 units in 2017 compared to 29,030 in 2016.

In ringgit terms, the value rose about 21% to RM12.93bil from RM10.7bil a year ago.

Ng Chan Mau’s business director Tom Low Chee Hian says: “The value of the properties being auctioned off has increased. There is an increase of 300 auctioned units but a rise in value of about RM2bil.”

“Developers have been building more high-cost units compared to lower priced ones. So naturally there will be more high-end products entering the auction market,” says Low, who does his own research on auctions.

Low expects the number of auctioned units to rise this year with those priced RM300,000 and below more in demand because “this segment of housing” is in short supply.

The types of properties being auctioned have also broadened considerably of late to include bungalows, semi-detached units, double-storey terraced units, high-rise condominiums that cost millions of ringgit and serviced apartments in different parts of the city and Petaling Jaya, judging from the classified advertisements and auction websites.

“There are more newly completed medium to high-end condominium units entering the market but I don’t have the numbers. Some investors could have bought multiple units and are now unable to keep up with mortgage payments,” says Low.

Several years ago, most of the auctioned units comprise low-cost apartments and flats located in Bukit Beruntung, Bukit Sentosa, Kundang and Taman Tasik Puteri near Rawang.

Independent agent Leslie Low, an agent specialising in auctions, is of the view that the number of units being auctioned has risen since the implementation of the Goods & Services Tax in 2015.

Leslie says the number of units from foreign banks have also risen. This could not be verified with foreign banks based in Kuala Lumpur.

Leslie concurs with another source who declines to be named that newly completed units are entering the auction platform, particularly from Johor.

“These buyers bought the units without coming to Malaysia. They used a foreign-based bank which has operations here and the initial downpayment was made via the locally-based foreign bank. Because these units were bought on developers interest bearing scheme, instalment only begins on completion of the project,” Leslie says.

Other than Iskandar Malaysia in Johor, Leslie is also seeing high-rise residential units from Jalan Segambut Dalam which developers sold off as Mont’Kiara.

He says local buyers may try to hold on to their purchases by updating their mortgage payments but not foreigners.

Leslie observes that small offices, home offices (SoHos) are generally purchased by young first-time buyers. Developers built shoebox units of 400-500 sq ft to bring the absolute price down on these commercial properties.

Had it been a regular three-bedroom unit, the absolute price would be higher. Although the absolute price is lower, on a per square foot basis, it is still high, Leslie says.

The SoHo dilemma is particularly obvious in Cyberjaya.

The situation is not favourable for Iskandar’s Malaysia high priced condominiums units and Cyberjaya for its SoHo market, Leslie says, adding that although Hartamas has a lot of shoebox units, there is demand for them. — By Thean Lee Cheng