Notwithstanding the largely negative global economic conditions, Malaysia managed to register 4.4 per cent economic growth for Q3 2011.
Likewise, the country’s property market has been experiencing growth to date. According to CB Richard Ellis (Malaysia) Sdn Bhd, capital values of high-end condominiums are expected to hold at the current price levels, supported mainly by local investors.
Furthermore, attractive financing packages and continuing low borrowing costs (with effective lending rate of between 4.20 per cent and 4.40 per cent) are still supporting developer sales. The recent quarter witnessed several launches of high- end condominiums.
Among these, phase 1 of Verdana Condominium at Kiara North is priced at an average of RM580psf, Mirage and The Face at KLCC at an average of RM1,200psf and RM1,300psf respectively, serviced apartments at Sunway Velocity at an average of RM700psf, and The Greens at Taman Tun Dr Ismail at RM720psf.
Take-up rates of units priced below RM1 million have been encouraging. Phase 1 of Verdana Condominium reportedly sold over 60 per cent of the total 298 units while The Greens’ 165 launched units were fully sold.
Meanwhile, the subsale market has recorded marginal price increases while the rent of high-end residences remained stable since early 2011, averaging RM3.50psf in KL.
Selling prices of the units are between RM3.3 million and RM4.4 million, or RM900psf.
The average monthly rental value of high-end condominiums in KL is stable at RM3.50psf but new completions are expected to keep the rate competitive.
The DTZ Fair Value Index, published in mid-2011 on a score of 65 for Asia Pacific where well over 80 per cent of the markets remain at or above fair value, has classified KL as “warm” market.
A more recent report by Knight Frank’s Global House Price Index maintained its confidence on KL, predicting a modest growth (less than five per cent) despite the backdrop of mounting pressures on the global economy with no clear solutions to resolve the Eurozone debt crisis.
Malaysia is ranked 11th ahead of neighbours Singapore at 13th and Indonesia at 16th, with a 6.6 per cent year-on-year increase. Hong Kong, which ranks at the top of house price increases, registered 19.3 per cent growth.
These numbers are expected to see a weaker phase of growth, but luxury properties are envisaged to be better insulated throughout the phase as affluent purchasers continue to take advantage of the low mortgage rates introduced earlier as a stimulus measure against the late 2008 global financial crisis.
There’s also expectation that the latest measure introduced by Singapore – the imposition of additional buyer’s stamp duty on foreigners and permanent residents buying properties there – would benefit developers in Iskandar Malaysia, Johor.
Foreigners and companies will now have to pay an extra 10 per cent stamp duty on residential property purchases in the island republic.
Johor Real Estate and Housing Developers’ Association branch chairman Simon Heng said foreigners buying properties in Singapore for investment might look elsewhere in the region.
It looks like the Malaysian property market has its votes of confidence.
This article was written by Ali Zara
Source: The Expat February 2012
This article has been edited for ExpatGomalaysia.com
Get your free subscription and free delivery of The Expat Magazine.