PETALING JAYA: The Kuala Lumpur luxury condominium segment is expected to see improvements this year, on the back of renewed confidence and improving market sentiment.
Property consultancy Knight Frank noted that a total of 216 condominium and apartment units changed hands in Kuala Lumpur in the first quarter of this year.
Despite being marginally lower when compared to the 238 transacted units in the fourth quarter of last year, the property consultancy said there was an uptick in enquiries from potential buyers due to renewed confidence in the new government.
“The recent echo of improving sentiments coupled with strong growth momentum of the economy and rebound of oil prices among others, show that there is a window of opportunities for recovery in the property market, including the high end segment,” Knight Frank said in its Real Estate Highlights report for the first half of 2018.
“Malaysia is expected to return to the radar of investors after the market stabilises with more clarity in the policies of the newly-elected government.”
Knight Frank said the three-month tax holiday period, effective June 1, is also positive for the property market.
“The zero-rating of the goods and services tax (GST) is expected to boost the commercial sub-sector as buyers purchasing commercial properties during the tax holiday period pay 0% GST.
“Thus, we expect to see more activities in this market segment.
“As for the housing sector which is already GST exempted, there will not be significant price movement in the short term.
“In the primary market, with more developers going on countrywide roadshows to promote recently-launched products and to clear existing property stock by offering rebates and better promotional packages, we expect sales to pick up albeit slowly.”
The property consultancy said the rental market, which is believed to have already bottomed out, is also receiving more enquiries.
During the first half of 2018, Knight Frank said rentals of most high-end condominium/serviced apartment schemes in the various localities under its review, continued to hold steady.
“Asking rentals in Bangsar, however, were noted to be generally lower.
“Within the Kuala Lumpur city centre, amid the tight leasing market, owners with weaker holding power are turning to the online marketplace and hospitality service operators such as Airbnb, to offer their accommodation for short-term stay at higher yields.”
It added that the mismatch of supply and demand within the Kuala Lumpur city centre continues to put pressure on secondary pricing.
“Meanwhile, asking prices in other localities under review remained stable. In the locality of Ampang Hilir/U-Thant, the launched price of Impression U-Thant starts from RM1.3mil (or around RM1,700 per sq ft).
“The pricing on per sq ft basis is higher compared to other existing projects in the vicinity as the units offered are smaller in size and semi-furnished.”
“Inspirasi Mont’Kiara was launched at RM776 per sq ft onwards while units at Damansara Fifty6 commanded an average pricing of RM830 per sq ft.”
In the secondary market, Knight Frank said the transacted prices of mid-to-large sized condominiums/serviced apartments (1,300 sq ft to 3,400 sq ft) in selected locations such as The Troika and Pavilion Residence remained resilient, averaging at RM1,200 per sq ft and RM1,700 per sq ft respectively.
According to the National Property Information Centre, the number of unsold completed residential units – including serviced apartments and small office home offices (SoHos) – totalled 34,532 worth RM22.26bil as at the first quarter of this year.
This represented an increase of 55.72% in the number of unsold units compared to a year ago, when unsold units totalled 22,175, inclusive of serviced apartments and SoHos, which are built on land zoned as commercial but have a residential element to them.