Malaysia’s prime condo market remains cautious in the face of economic headwinds, with prices remaining broadly flat.
New research from Knight Frank reveals that asking prices and rentals in “most locations” were generally flat in the second half of 2015.
The figures arrive as the Malaysian economy continued to moderate in 2015, amid domestic and external headwinds, growing 4.7 per cent in the third quarter of the year. For the whole year of 2015, the country’s economy is expected to have expanded by 4.5 per cent to 5.5 per cent.
According to Knight Frank’s research, private consumption decelerated from 8.8 per cent (Q1 2015) to 6.4 per cent (Q2 2015) and is expected to moderate further, as households continue to be concerned over the state of the economy amid uncertainties arising from implementation of the Goods & Services Tax (GST), further weakening of the local currency and softer labour market conditions.
Despite the sluggish high end residential market, though, several notable projects were previewed and launched during the six months.
The cumulative supply of high-end condominiums in Kuala Lumpur now stands at 42,749 units, following the completion of 3,139 units. In terms of distribution, Mont’ Kiara / Sri Hartamas contribute about 48 per cent (1,508 units), followed by KL City with 35.5 per cent (1,113 units). The remaining units are located in Ampang Hilir / U-Thant area (518 units or 16.5 per cent).
“In KL City, high-end condominiums with small to mid-unit sizing ranging from about 600 sq ft to 1,300 sq ft in selected schemes such as ViPod Residences, Marc Serviced Residence and Pavilion Residences, were transacted in excess of RM1,700 per sq ft in 1H2015,” notes Knight Frank. “Meanwhile, prices of larger units in The Troika, Quadro and One KL, sized above 2,200 sq ft, ranged from about RM1,100 to RM1,300 per sq ft. In the primary market, prices of luxury branded serviced residences range from RM2,000 to RM3,000 per sq ft.”
Buyers and investors, though, still have a “wait and see” approach, prompting developers to offer incentives for home ownership. Sales dropped 6.3 per cent quarter-on-quarter in the three months to September 2015, with the existing stringent lending guidelines continuing to impact deals.Google+