Patchay Urban Research (we) see property prices will continue to rise to around RM2,000 psf level.
(Currently, Just very few condo projects in KLCC are priced at this level, sub-sale transactions at this price levels are very very very low, condo priced below RM1.0 mil still relatively okay. Active transacted KLCC condo/serviced apartments include MARC, MERITZ, MAYTOWER, and other offering smaller sizes.)Suburban areas will continue to play catch up but we know certain suburban areas will hit the climax of more than RM1,500 psf once things like MRT is done.
(when will it happened? 2016? KL suburbs like Mid Valley's neighbour KL Eco City newly launches will be around RM1100psf, Kota Damansara around 500psf, PJ Sect 17/ sect 13 around 500psf to 800psf, all are relatively smaller in sizes, hence to ensure affordability in prices. Believe more 300sf size units will be introduced in near future maybe if 1,500psf = RM450k each? However, still one factor to boost up property price - that is inflation.) Another simple illustration is that time will tell when things like Louis Vuitton will hit the suburban markets, such as in Petaling Jaya. Thus, we see good potential for suburban homes, suburban work and suburban lifestyle.
We also think KL middle-high-end properties will continue to enjoy good yield based on cost of entry is still relatively low compared to say future 2015 prices.
(at the time being, low entry cost to buy property due to low interests (BLR-x.X%), new units entitled to discounts from developer, absorption legal fees and stamp duty in some cases by developers to boost the sales, however, it is not that low entry cost to buy a sub-sale property with no all kinds of fees absorpted. In future, we don't know how the market will performance- be good or be bad? maybe also future new units will be marketed as zero down and plus cash received by buyers as the entry cost/benefits?)However, we expect the Malaysian yield to gradually reduce to adjust to our average neighbours level (currently our KL yield is very high compared to our ASEAN neighbours)
(yields of condominium/apartment is being reduced now, coz everyone is asking more for value, however, rental wise, some are slightly increase, some are slightly down, and even some are stagnant, conclusion is maintain. Those who bought their units in the past are currently still enjoy good yields.) This is also more realistic to re-equilibrium to an average Malaysian purchasing power. At the same time, the continued growth in urban population (due to the young population who seek to work in KL) will act as a base support for the supply-demand market.
(have to check the historical trends of KL population vs selangor population, coz dunno kl population is actually increasing or decresing?)We also understand that many more Measures will be taken by the Authorities (namely the Govt) to smoothen our real estate and construction industries. Things like better real estate laws, foreign ownerships, strata and land issues, public housing and lower income housing gap, infrastructure issues, REITs, new construction methods, new guidelines for quality structures, green building, etc etc. The implications will be Good but it depends on how fast we can get things done. Overall it will be Good thus leading to appreciation of properties.
(uncertainty of govet policy is also a matter. until now 100% loans for property >RM220k still has yet been finalised.)In coming years, Malaysian properties will be gradually "internationalised". The last puzzle that is the MRT (and other public transport) could enhance connectivity and commercial productivity. In conjunction with ETP plans, more creative and branded real estate products will also be hitting our shores soon. We also noted that the Govt will try to push for the majority population (Bumis) to lead the next property cycle. EPF, Petronas, Khazanah, LTH, PHBB, PNB, etc all want a share of our property market.
As long as our interest rates remained relatively at low levels, the up-cycle could continue. We see a pick up in demands for high-end Grade A commercial and residential properties. At the same time, we acknowledge the under-served lower-middle working class. We think there would be more new players coming into the market to serve the growing working class with very affordable but small sized homes.
(might be GLC company that will build their so called affordable home to nearby future MRT stations such as kajang, cheras, sg buloh, however we might be surprised if government will instruct those glc companies to build affrodable home in KL city centre area. hehehehe)All these will lead continued excitement in the sector. But again, the success of ETP will hold the key to the sustainability of our real estate. And yeah, don't forget about external factors as well such as property bubble in China in coming years could adversely affect us.
(this might be affected us? high end? mid end? or low end?)
Feb 2 2011, 01:55 PM, updated 15y ago
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