DTZ: A more cautious market next year 

By Wong Mei Kay of theedgeproperty.com 
Thursday, 10 November 2011 18:35   

KUALA LUMPUR: A more cautious Kuala Lumpur property market can be expected next year following the current global market turmoil, said property consultancy DTZ in its Kuala Lumpur 3Q 2011 Property Times report.

Looking forward in the residential sector, DTZ expects demand for luxury residential units to be slow. "There is an increased possibility of downside risk with increased wariness on the buyers' end which is fueled by fears of the uncertain market conditions and tightening credit of banks," it said.

Significant project completions in the third quarter (3Q) have placed pressure on rental rates, especially on high-end condominium units. Nevertheless, DTZ's data showed overall high-end condo rents in Kuala Lumpur remaining stable at RM3.50 psf, while the average capital value of high-end condos in Kuala Lumpur is hovering at RM626 psf, with Kuala Lumpur City Centre (KLCC) properties averaging at RM902 psf.

Although there is new pressure to sell newly completed units by investors, there is still selective demand for new launches. Developers have also been marketing smaller units as SoHos in mixed developments to appeal to younger buyers.

The outlook for the office market next year is more "somber" considering the projected completions in 2012, said DTZ.

Rental demand for office space in 3Q had slowed with most of the transactions being for relocation purposes. With oil and gas as well as the professional services sector driving the leasing demand for office space, rents had remained stable with prime gross rental rates at RM6.22 psf while average vacancy rate during the review period was at 13.10%.

There has been no change in capital values with prices for good quality surburban offices sold at RM600 to RM700 psf while prime offices are fetching an average of RM807 psf.

Current total stock stood at 61.74 million sq ft with a total 1.4 million sq ft to be completed by the year end, including the D'tiara Amanaraya Corp Tower, Crest Tower and Lot E@KL Sentral.

A total of 7.4 million sq ft of projected completions is expected in 2012 and "...with external headwinds, the overall net absorption rate could further slow down in 4Q which will not provide comfort to a market that is expecting 2012 to be a pontenial tipping point", said DTZ.

The investment market in 3Q2011 had picked up in terms of value and activity sparked by strong deals as well as those seeking homes for own occupation. Total investment value increased by 39% from 2Q 2011 to RM1,349 million. Geographically, most of properties sold are located in and around Kuala Lumpur. Looking forward the investment market looks set to be dominated by local investors as a result of foreign investor's cautiousness, said DTZ.

An optimistic outlook is seen in the retail sector due to a stronger ringgit, low disposal income, low unemployment rate and a strong tourism industry. Retail sales are forecasted to expand from RM182.44 billion to RM279.83 billion by 2015 despite a slip in the Consumer Sentiment Index (CSI), down 1.7 points from the previous quarter, signalling a more prudent and selective consumer spending plans.

Average occupancy rate registered a slight increase to 91% in the city and 88% outside of Kuala Lumpur. However, slow leasing rates had been experienced in newly completed centres while a total of 860,000 sq ft of net lettable area has been added in the last quarter, bringing the total stock in Klang Valley up to 45.8 million sq ft. Rental growth is expected to be moderate due to more projected new completions in the near future.

Some said, let the game be fair. The work smart and work hard to increase their income. And later can buy their house.

We might need not worry about the smart one.

But what happen with the work hard but not so smart with no opportunity?

Let said in a family, you have 2 kids , one smart  and the other not so smart and not so hard working. You as a parent sure will appear to help regardless smart or no smart right? or you just do nothing?
It has being  a lot of talks about how bad the capitalism system. The so call rich guy getting richer and poor remain poorer.

Sometime, the richer 1% control beyond 80% wealth.

We all know. Good location condo all sapu by rich guy. One person can buy up to 5 condo before launching. This condo later rented out with overprice rent or intend to sell overprice. It no tenant demand/ no buyer rather keep in vacant. Indirectly cause the so call demand > supply in our market. Classic economy theory.

On the education, I don't think the printing degree happened. It is just the world have changed but the education system in malaysia remain the same.  Evident , young junior seem  know lots of  things. I can never know this and that back them.

Our work environment have changed. I can see foreigner being recruited to replace local. World have 7 billion now. Competition more intense.

Some leadership need to come out to alter a good national policy to defense this 20's / 30'. These youngster is also malaysian and they deserve a place that they can call home. After all a home  is one of basic need & the education the only ways can more malaysian into high income nation. Let us support control property speculation.

If this property price keep go up and sudden burst. Resulted underwater property like USA. More poor 20's/30' people suffer and create anger among them.

It is low moral for the rich push up the housing demand and causing the 20's / 30's to suffer. & the stupid  govt do nothing.

Don't let our children / grand-children balme us. For how is a man benefited if he gain the whole world and he  lose his soul?

i salute you and cant agree more     

the so called "rich" are just using the "taking risk" as an excuse to cover their GREED.

when there's social unrest, big one, we shall see who has the most to lose.

I feel its better to teach our children to live within their means/affordability. We have to set a good example. To take an uncalculated risk and then to lose all your saving on an unaffordable property is much worse than not having your own house.

I feel its better to teach our children to live within their means/affordability. We have to set a good example. To take an uncalculated risk and then to lose all your saving on an unaffordable property is much worse than not having your own house.

I feel its better to teach our children to live within their means/affordability. We have to set a good example. To take an uncalculated risk and then to lose all your saving on an unaffordable property is much worse than not having your own house.

no risk no gain, later your children become complain king when they grow up 

I feel its better to teach our children to live within their means/affordability. We have to set a good example. To take an uncalculated risk and then to lose all your saving on an unaffordable property is much worse than not having your own house.

Bank Negara to enforce limit on credit cards starting Jan 1, more people will stop buying, how can the econmy be good?

http://thestar.com.my/news/story.asp?file=...1&if_height=661

what does credit card limit got to do with house price?     

i have 45k credit limit and utang less than 1k does that mean with that much limit i can go and laverage?     

what does credit card limit got to do with house price?     

i have 45k credit limit and utang less than 1k does that mean with that much limit i can go and laverage?     

The BNM cc limit will causing the domestic demand slower ( as less money spend on the multiple effect). if 1k spend the circulation effect is 10 x the 1 k. Remember  might be hundred thousand crad holder effected.

But, I think the message bring out by BNM is  the debts level is rather serious now

1)  interest rate will move higher ?
2)  hay , banker do your part? or
3)  educate the public smart spending?

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Educate the governance to clear off their debt first la. RM500b. What you owe the bank is just that small little puny money compared to how our government mismanage our funds. They did the wrong thing from the very beginning, what's the point of limiting middle class and lower class earner CREDIT capability? you think your credit and my credit capability combine actually play that much impact to the property market?

They target the wrong group of ppl from the very beginning. The group of ppl which they should target are those who are buying homes like vegetables. Setup a rule, each person can only have 2 HOME! that would stop the buying. If they do not do the right thing and continue practising the wrong thing. it's sad to say we will never move. 20% DP for 3rd home? Ppl are buying home without going through banks.