The Malaysian property market is expected to be healthy this year with annual average growth of 10 to 15 percent in terms of residential prices. Moreover, the government will be clamping down on red tape to enable faster real estate transactions, says Deputy Finance Minister I Datuk Donald Lim Siang Chai. Overall, property prices are reasonable and the increases are limited to certain areas only. If the cost of property spikes, the ministry will implement cooling measures, like increasing the real property gains tax (RPGT) at a moderate pace.
That bodes well for Greater Kuala Lumpur. Official statistics at the beginning of this year pointed to a prediction that about 10 million people would populate the Greater Kuala Lumpur area by 2020. Corroborating this was a report last month by IP Global indicating Kuala Lumpur to be the top destination for property investors across Asia-Pacific that were seeking to diversify their portfolios with affordable properties, mostly due to Malaysia’s economic stability amidst financial crises in Europe and the United States.
In addition, DTZ Research’s Property Times for Kuala Lumpur’s fourth quarter of 2011 revealed prices and rentals of high-end condominiums in the capital were stable in that quarter, with the average capital value and rental value remained steady at RM626 (SG$257.03) per square foot, or RM3.50 (SG$1.44) per square foot per month.
On a wider scope, IP Global reported prices of Kuala Lumpur properties have seen a hike of 25 percent since 2009, compared to 44 percent in Singapore. As the average price in Malaysia is RM747 (SG$306.72) per square foot — compared to SG$2,800 per square foot in Singapore — apartments in Kuala Lumpur in particular correspondingly tend to be larger, with sizes ranging from 600 to 3,000 square feet compared to 500 to 2,500 square feet in Singapore.
IP Global’s CEO Tim Murphy pegged areas of Sungai Besi and Mont Kiara as hotspots for expatriates and white collar renters, “Because they offer a quick commute into KLCC, and price per square foot can be up to 33 percent cheaper than in comparable KLCC properties.”
Murphy’s reasoning behind the bankability of Sungai Besi and Mont Kiara is attributable to the redevelopment of the 162-hectare Sungai Besi Airport into a multi-billion dollar residential and commercial zone slated for the next decade as well as to the LRT expansion plans in the latter district.
In the residential sector, Lim added that, “the house price index rose 6.6 percent to 156.9 points during the fourth quarter of 2011. In line with that, the All House Price Index hit RM217,297 in the same quarter … Kuala Lumpur continued to record the highest prices for all houses at RM487,219, followed by Selangor at RM327,237. The average price for terrace houses in Kuala Lumpur is RM527,113 and in Selangor, RM325,951.” In the commercial sub-sector, he explained that 40 newly constructed office buildings entered the market last year, with occupancy rates for purpose-built offices standing at more than 80 percent while take-up spaces surpassed 250,000 square metres in 2011.
The staff that will likely work in all those new offices are often most interested in new residential developments too, such as the ones in Sungai Besi and Mont Kiara. Recently completed was Phase 2 of SENI Mont’ Kiara (Block Picasso) by Ireka Development Management Sdn Bhd, with final release units available being three- and four-bedrooms that enjoy panoramas of the city and resort landscaping. Stretching over 8.8 acres (3.5 hectares), more than half of the SENI Mont’ Kiara site features 605 luxurious residential units over two 40-storey high-rise blocks and two 12-storey low-rise blocks. 2.3 acres of the grounds will integrate sculpture gardens, water features, Jacuzzis, two Olympic-length swimming pools and a broad range of recreational facilities.
Not far off from Mont Kiara is the exciting large-scale development of Naza TTDI’s KL Metropolis, which will include residential and office towers as well as a retail centre in its Phase 1 set for completion in 2015. Overall, KL Metropolis spans an area of 75.5 acres (31 hectares) and is slated to be Malaysia’s largest exhibition centre as well as Kuala Lumpur’s latest international trade district by housing the new Matrade Centre.
Emerging closer to Sungai Besi and the city centre is Sunway Velocity, an integrated development by Sunway Integrated Properties Sdn Bhd (SIP) intended to breathe new life into the vicinity of Cheras. Managing Director at SIP Ho Hon Sang said that the developer expects to utilise Sunway Velocity as an, “urban regeneration initiative that will improve the area’s social aspects and liveability.”