good description! i especially agree with the bolded part - maresia gdp is now smaller than singapore - it cannot withstand global crises.

now, what happens when prop demand slows in the face of new prices too high, ample subsale supply and debt levels reach max for majority of investors?

developers will be forced to slow or stop launching. that's when their cashflow gets hit. those with healthy balance sheets and a good landbank can go on - sell land, swaps, leasing, etc. those with crap balance sheets, weak cashflow and high debt/equity ratio made continuously worse by dwindling stock price will come under severe strain. that's when some of them will be forced to abandon projects or get acquired by some other biggie. or bailout by gomen with taxpayer's money. affected prop buyers, esp housebuyers with epf money will be the ultimate and biggest losers. we've seen all these, no?

This post has been edited by AVFAN: Jul 26 2011, 06:11 PM

KLCC area condos only 10% occupied. So poor..

http://www.themalaysianinsider.com/busines...patch-says-dtz/

KL property may enter uncertain patch says DTZ
By Lee Wei LianJuly 26, 2011

The sun sets near the Petronas Twin Towers © and Kuala Lumpur Tower (L) in this file photo of 2009. Global real estate consultancy DTZ in a report released July 26, 2011 pointed out that some developments in the prestigious KLCC area are only 10 per cent occupied. – Reuters picKUALA LUMPUR, July 26 – Declining affordability is expected to impact the local property market with some developments in the prestigious KLCC area only 10 per cent occupied said global real estate consultancy DTZ in a report released today.

The report said that a recent survey of completed projects around the KLCC area revealed that occupancy ranged from a low of about 10 per cent to a high of 80 per cent, with an average of 56 per cent and said that occupancy levels are an issue that investors should be wary of.

“With prices and affordability moving in different directions, the market may enter into an uncertain patch before settling into a more discernible trend,” said DTZ in its report. “Demand will continue to be relatively selective, with strong latent demand building up for more affordable properties in the more established suburbs.”

The retail market meanwhile is expected to be impacted from more sluggish consumer sentiment as high inflation eats away at household disposable income.

“Occupancy rate of retail centres is stable but leasing up rate of newly completed centres are becoming more challenging, exhibiting a tougher retail environment across even established neighbourhoods,” said DTZ in a press release that accompanied its property report.

“It is hoped that in the short term, the tourism sector will provide more support, with higher targeted arrivals, whether in its various forms such as medical, sport,education or business.”

While Malaysia does not have a housing affordability index, a rough calculation shows the average price of a KL residential property is now about RM485,000, or roughly nine times the average urban household annual income of RM54,000 and a possible sign that the market is experiencing a bubble.

The Demographia International Housing Affordability Survey rates markets whose property prices are 5.1 times median income or more, as “severely unaffordable”.

The National House Buyers Association (HBA) had warned in May that an entire generation of young adults risk being locked out of the property market due to runaway house prices.

Prices of residential properties in and around the Klang Valley had increased by up to 30 per cent last year thanks to a combination of low interest rates and ample liquidity.

The gains chalked up by the property market last year are unlikely to be repeated however as buyer sentiment could be hit by anti-speculation measures introduced last year and an ample supply of new units coming into the market.

A large number of properties were launched in 2008 and 2009 under easy financing campaigns like the 5/95 and 10/90 schemes offered by developers and these projects will be coming online between the third quarter of this year and the first quarter of next year and the new supply could put the brakes on prices.

The DTZ report noted that capital values in the city have been relatively stable at an average of RM603 per sq ft with KLCC properties averaging RM910 per sq ft.

It also noted that the supply of completed homes in the KLCC area is already turning it into a tenant’s market.

“There is also ample supply of units available in the secondary market with owners now able to transact freely unlike when the projects are under construction,” said DTZ.

that's why it's utmost important to buy from 'reliable' developer in these trying periods and make sure they would not abandon the projects.
good luck to those who have vested in abu, ah kau dan samy sdn bhd.

low accupancy or high vacancy rate is a fact that new condo buyers shld not take it lightly....this phenomenon not just limited in KLCC but spreading across KV.

this figure published in their report in 1Q 2011. don't you see ranging from 10% to 80%. average about 50-60% in general. Still some condos are achieving good occupancy rate.

---

Added on July 26, 2011, 8:33 pmCity&Country: Large condos may be a thing of the past
Tags: Bukit Kiara Properties , Ireka Corp Bhd , Sunrise Bhd , Sunway City Bhd


By Wong King Wai of The Edge Malaysia
Sunday, 24 July 2011 00:00

Developers are moving towards building condominiums with smaller units, which means there will be a limited supply of large condos in Mont’Kiara in the future, a scenario for investors to consider.
Several developers in the high-end, high-rise residential enclave, such as Sunrise Bhd (now a subsidiary of UEM Land Holdings Bhd), Bukit Kiara Properties (BKP), Ireka Corp Bhd and Sunway City Bhd, have chosen to build condos with an average size of 2,000 sq ft and above.
“We launched 10 Mont’Kiara and 11 Mont’Kiara a few years ago when we saw demand for larger condos, especially among expatriate families of a minimum of two adults and three children,” says Anne Tong, Sunrise’s general manager for branding and community development.
The seven-acre freehold 10 Mont’Kiara, which was completed in 2009, offers 332 units in two 43-storey towers. The typical units are between 3,478 and 4,090 sq ft in size. Tenants living in 10 Mont’Kiara are mostly professionals working for MNCs in mainly the oil and gas, banking and mining sectors. Their nationalities vary from American, British, French and Australian to Indian, Swiss and Canadian.
To help owners who have bought Sunrise products, a new division — hospitality and corporate marketing (HCM) — was created in 2009 to help owners lease out their units at no extra cost to them.
“We try to assist our existing customers in generating yield, prompting revenue growth and occupancy of their properties through medium and long-term leasing as well as resale consultations for optimal property value,” Anne says.
HCM basically acts on behalf of the owners, dealing with real estate agents and even helping with viewings. It also ensures that rents are fair and there is no undercutting in order to create a stable rental market for Sunrise products. The owners only meet the tenants when it is time to sign the tenancy agreement.
“We work with the agencies, real estate agents, embassies and corporations directly to help owners find tenants and potential tenants find accommodation,” Anne explains.
Some 400 owners have listed with HCM for rent and resale so far.
Currently, 176 of 10 Mont’Kiara’s 332 condos are occupied. Of this number, 94 are rented out while the remaining units are occupied by the owners. Rents are between RM10,000 and RM15,000 or RM3.20 and RM3.70 psf, depending on whether the units are partly or fully furnished. Gross rental yields, according to Anne, are between 5% and 6%.
The other condo projects by Sunrise with large units are 11 Mont’Kiara and 28 Mont’Kiara. The former, which has been completed and will be handed over next month, sits on 5.3 acres. It features five 43-storey towers with a total of 339 units whose built-ups range from 2,707 to 4,695 sq ft.
The latter, which comprises two 40-storey towers and is still under construction, sits on 4.87 acres. It has 460 units with the typical ones being between 2,535 and 3,000 sq ft in size. Slated for completion in 2013, 28 Mont’Kiara has a gross development value of RM998 million.
According to Anne, 28 Mont’Kiara is Sunrise’s last project in Mont’Kiara that will feature large units. “Moving forward, Sunrise will be building smaller units catering to young professionals.”
Sunrise will launch its latest development — 20 Mont’Kiara — in 2H2011. Situated near Plaza Mont’Kiara, this mixed-use development will feature a hotel, SoHos, luxury serviced residences, business suites and boutique retail outlets. It sits on six acres of freehold land and has an estimated GDV of RM1 billion. The built-up of the serviced residences is between 850 and 2,000 sq ft.
Sunrise is synonymous with the development of Mont’Kiara, having completed at least 14 condominium and three commercial projects in the area. Over the years, it has introduced numerous services to its residents, including a free community shuttle service, a toll-free customer call centre, mobile security patrol, public road CCTV system and night guard dog teams. It also organises regular social and recreational activities for its residents. The developer has also regularly come out tops in product quality in The Edge Top Property Developers Awards.
With the merger of Sunrise with UEM Land, the expanded group is focused on continuing Sunrise’s strong brand name in the area “by delivering sustainable community living and appreciating value to stakeholders”, says Datuk Wan Abdullah Wan Ibrahim, UEM Land’s managing director and CEO. “UEM Land recognises Sunrise’s reputation and expertise in the area of upmarket high-rise residential and commercial developments. We will ensure that continuous value-creation initiatives are implemented in Mont’Kiara.”
With regard to concerns about traffic congestion, Wan Abdullah says, “The residents of Mont’Kiara are now enjoying smoother traffic flow with the opening of the Jalan Duta-Kiara Bridge as an alternative route to and from Jalan Duta. In addition, we will be mobilising our newly formed Sunrise auxiliary police to assist in traffic management during peak hours.”
In BKP’s Hijauan Kiara, which was handed over in 2008, the unit sizes range from 2,090 to 3,732 sq ft.
BKP's Hijauan Kiara, completed in 2008, was built to cater to the demand for larger sized units
“We built Hijauan Kiara with large built-ups because of the demand for such sizes at the time in Mont’Kiara,” says N K Tong, BKP’s group managing director. “We also wanted to have a very low density and exclusive project after our Aman Kiara development. Thus, large built-ups came to mind.”
Aman Kiara, BKP’s maiden project, is an exclusive gated and guarded precinct of 19 bungalows and 12 duplex condovillas and was launched in 2002.
To help the owners rent out their Hijauan Kiara condos, BKP is working with several exclusive real estate agencies. “We are offering ourselves as the go-between to real estate agents and homeowners at no cost to them,” says N K.
Current rents at Hijauan Kiara average RM3.50 psf for unfurnished units. The number of tenants has increased steadily over the years and some 80% of the units are occupied now.
Hijauan Kiara has 188 units, with no more than two per floor and each unit with its own lift lobby. The 5.4-acre project was launched in 2005.
Ireka Corp’s SENI Mont’Kiara, which offers units with built-ups that start at 2,347 sq ft, is still under development. Phase 1 was handed over in May this year while Phase 2 may be completed and handed over by the end of this year. “The large units are in response to our buyers and a market that wanted more luxurious and larger condos in Mont’Kiara,” says Ireka Corp’s president and CEO Lai Voon Hon.
Ireka also provides leasing and sub-sales assistance to its condo owners via a partnership with real estate agency One Real Estate Sdn Bhd. The agency also helps customise accommodation according to the needs and budgets of tenants.
Its Tiffani by i-ZEN offers smaller units of 1,235 sq ft onwards. Rents are between RM2 psf and RM5 psf. The project has two towers — one 28 storeys and the other 29 storeys — with a total of 399 units and sits on 3.6 acres.
SENI Mont’Kiara sits on 8.83 acres and features two 40-storey towers and two 12-storey towers offering a total of 605 units.
Meanwhile, SunCity’s Sunway Vivaldi will be handed over to owners in 3Q2011, according to senior manager for marketing and sales Vincent Eyu. Unit sizes start from 2,573 sq ft.
“We built large units to cater to growing demand for such homes. Many people are moving out of bungalows to condos for security and maintenance reasons.”
He reveals that SunCity works with real estate agency Nova Realty, which provides leasing services to the condo owners. Sunway Vivaldi comprises three 20-storey towers and three 9-storey towers with a total of 228 units. It sits on 7.7 acres.


This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 864, June 27-July 3, 2011


This post has been edited by kh8668: Jul 26 2011, 08:33 PM

is average 50-60% a good indicator for ppl to invest their hard earned money in condo?

is the condo occupancy trend going up or down...you shld know better

like i said below....pls continue your salesman talk as i am benefitting from it

Long article, but pls do not miss that part!

This post has been edited by AVFAN: Jul 26 2011, 08:50 PM

Affordability index is a good indicator used in key mkts like HK, SG and Aust.....sadly MY mkt yet to reach that status

the absence of prop indicators eg affordability index, median price, vacancy indec, etc serve good opportunity for some vested parties to dupe newbie investors.....sedih tapi benar!

LOL...depend on your luck.

by the way, you already make a lot. as long as you do not dispose any your properties, you will make more.

I am not DIRECT salesman anyway, just kepoh kepoh here coz a lot of information I can get from here.

---

Added on July 26, 2011, 8:53 pmNine times? it should be more, just time matter.

and we don't know how the calculation base. LOL

This post has been edited by kh8668: Jul 26 2011, 08:56 PM

i am waiting for the right time to dispose and invest....every exit shld follow immediately with another entry....this is my investment rule.

you are no diff with SAs when you keep promoting new devs....

coz new developments entry costs lower nowadays and better designs and promising than tropics...kekekeke

new dev like PJ Icon City is 'good' entry cost, izzit? TMS including me will love ppl like you....

ohh, you also a buyer from TMS Icon City? kekeke

i see it as a good buy (not goodbye) as long as the buyers can afford.

sadly, my pocket is not deep enuff to buy Icon City.....

that'y I said before buy within your limits lo....

I am predicting next year many flippers will get drown looking at the current buying trend... most young investors targeting new dev due to inflated subsale prop which are far ahead of valuation

new development should get quotation of building from QS..kekekeke....costs to build higher, what to do?

even nowadays do some renovations also "pang pang pang seng"

all project offer low entry cost as low as Rm 1000 for the Rm350+K condo, medium class people (or low) able to buy......they might not
think about repayment after handling over, simply think to investment for $$$......if cash flow not strong all gone.

because they thought that.. they may able to accumulate $$ in 3 yrs time to sustain for anything happen... it is not hard to predict...

i agreed once crash everything gone...