Source: https://m.facebook.com/story.php?story_fbid...mibextid=q5o4bk

This was too good an article for me not to share. Credits to Propcafe.

PROPCAFE GPT: Can you share some experiences related to the KLCC property rental market article earlier?

The latest exprience of PROPCAFE in KLCC property was related to one of the properties (near to 10 yrs old building) in a strategic location. Thanks to its low number of unit per floor and density, the small 1+1 room unit able to rent out around rm3800-4300 before the pandemic. The rental dropped significantly due the airbnb activities then Covid MCO period. The management then decided to ban the airbnb activities via the AGM which helped to stablise the rental. Unfortunately, pandemic has made most expats exit our country. This property then brought in many local tenants with lower budget. Due to its location and low density (& privacy), it was well received by local professional from other states. So many agents see great opportunity from this desperare period (landlords) to market it (previously not easy to see avg. or bad agencies or agents get the mandate from landlords here) with the rental price RM2200-2800. This particular unit was rented out at RM2,500 (painful as it dropped from rm4000). With this RM2k+ level, so many KLCC agents wannabe started to come in and the standard of services also declined significantly. Many landlords there have no choice but to entertain this type of agents who have many second or third tier customers, of course with their low ball approach to fish the customers in superb location like this.

Anyway, the extension of tenancy sees the rent moved up to RM2800 when MCO was lifted and life slowly went back to normal. Too bad, the agents continued to try their "pasar malam" way of marketing i.e. cheap and volume game to squeeze desperate landlords and close more deals i.e. to bring in sub-standard & lower quality of tenant to the building. Eventually that tenancy ended recently and of course the agent continued trying to convince the landlord to stick the rent around rm2500-2800 level and provided the same stories by showing all the lowly priced advertisement from the two property portals which clearly filled with the advertisements by two to three agencies with low ball prices. Having said that, there were few geniune agencies with much better prices but their advertisements were pushed to the lower pages in portals.

One should know the game well in property advertisement there!Just few calls could demystify their stories easily and proved not many units were available in the market. Although landlord still receive many inquiries from agents, again mostly were those who want to have a quick deal with low price. Often, no return calls after landlord stated down his price. The landlord decided to stick with the agent who at least tried to set the reasonable rental price in the portal (not those in the first page for sure). After 2.5 weeks from the day it was available, the good agent closed the deal after her first viewing arrangement with the price of RM3600. The tenancy started 1.5 weeks time. It is still not back to its peak back then but it is considered a decent deal as the price has moved from RM2500 (MCO) to RM3600 that translated to 44% improvement from the low.

The moral of the story is KLCC landlords need to be alerted and find out the actual liquidity of the property. The property portal could be misleading and the agencies do it with their own purpose and strategy. While landlords could not do much about the portal and advertisement, landlords can still make test calls on the low price advertisement. The trick is one must also check more and talk to agents who posted higher price too (often they ll share you with the liqudity close to the market). Remember, no agents love to post high price and get less enquiries. 😁 So they will be more trustworthy.

Hope the above case helps! To KLCC property owners - HAVE FAITH! You can always turn the tide! 💪

PROPCAFE GTP: Why KLCC Property's Rental Market Recovery Lagging Behind Other Areas?

It is all about Supply & Demand, Airbnb Operation, Unprofessional Agents, and Ignorance of Landlord.

1. Supply & Demand: KLCC tenant market's demand and supply are yet to reach the right equilibrium point as the supply keep coming in (though much less than 5-7yrs ago) and demand was dropping last two years. "Tthanks" to Covid (Expats number went down significantly), Need for Office (WFH or hybrid becomes norm), City Office Movement (from KLCC to PJ, TRX, and future Merdeka 118) and lastly FDI and economy is not recovering fast enough to bring in more MNCs, better city jobs, and foreigners to KLCC. Policies that attract foreigners like MM2H also altered and became less friendly.

2. Airbnb Operation: While the opening up of countries help tourists arrival and airbnb activities, most of the investors (while waiting for the return of expat) turn to airbnb to reduce their "pain" on installment. Tenants who look for long term lease do not feel comfortable with the chaotic lobby, parties, constant noise pollution, and mis-behaviour of guests in common facilities. Not to say the facilities' wear & tear issues becomes more serious that affect the attractiveness of the property. Tenants become less willing to folk out higher budget for it and they may also want shorter tenancy period to keep their choices open.

3. Unprofessional Agents: COVID/ MCO was the nightmare to KLCC property owners. No expats, no airbnb, and relatively higher maintenance fees & installment. The collapse of demand of KLCC property made the rental fall drasticly which became so affordable (some are cheaper than Cheras, Puchong etc). Because or this, agents bring in more lower tier tenants into this market. While the rent of most of the other areas have moved up 30-40pc from the low, KLCC properties is still struggling to push up 20pc level. Agents are still giving the same comments/ reasons to landlord i.e no expat, plenty supplies and hope for quick deals with low pricing. Many landlords are furious that agents who comtinue to advettise their units at low price and fish the enquiries. Many times, the units either not available or "rented" out when test calls are made. With airbnb back in business to fill up more units, agents should help KLCC to go back to its proper level (easily compare the rent in other areas). Agents should not unethically low ball the landlord and create artificial cheap rental market out there.

4. Ignorant Landlord: KLCC property owners need to be patient and not too panic to simply accept all prices as long as it can rent out. Please in mind that low budget tenant may not be the type of tenant you want to have (trouble x 3 when they move out). If you see the matured market like Desa Parkcity and Mont Kiara, the financially strong owners make the market more solid and sustainable. More so, it bounce back immediately after MCO. So, landlords pls do not just check the listing in two big property portals because there are many "fishing" advertisement. If you are uncomfortable with the quoted low rental, just make few calls to the low ball agents and find out more (for viewing and confirm the rental). You will find many are "bullshit". So, moral of the story is you cannot be lazy when comes to investment, just do more homework and get the right agent to make more investment more worthwhile. When majority of landlords do it cohensively, the property rental market in KLCC surely will come back to a very reasonable level soon!


This post has been edited by Cavatzu: Feb 27 2023, 02:31 PM

KLCC market is the easiest way to lose money.

The bigger question is what happens to the surrounding areas sold on proximity to KLCC like Ampang, Kampung Baru and Wangsa Maju. Ampang has been a very good test case.

This post has been edited by Cavatzu: Feb 27 2023, 05:12 PM

Let me continue to get cheap rent please 😂

Buyer should be more happy with more launches and hence the over-supply creation. Later buyers can go shopping for completed properties and cheaper price (if this is true) without worry about project being abandon or sakit. If dont want to buy, keep hopping to rent cheap with every new projects vp-ed. Owners will fight to rent out their units cheap and fast if they cannot tahan, and evetually some may go to lelong.

Singapore: we tax speculators into submission
Malaysia: we build until you're too full to digest

"So, moral of the story is you cannot be lazy when comes to investment"

I agreed on this, many investor just too lazy to do extra work to get more return

"KLCC Property owners"

Dapat tenant also complain, tak dapat tenant also complain.

because the type of tenants (expat) they want tak dapat....

Expat all escape from Malaysia...
No jobs opportunity left...

Better go Singapore 😁

Those stayed...
All goes to Mont Kiara areas

As i always say for every 10 condos built for expats, there's only 1 expat.

We’re no Singapore nor Thailand and even Cambodia or Vietnam has more expats. Nor do you have the wage levels of the Middle East to make the conservative lifestyle worth it.

The only thing we have going is relatively affordable housing and an environment for retirees if you don’t like partying. They have recently destroyed this with their MM2H debacle.

This post has been edited by Cavatzu: Mar 1 2023, 08:02 AM

Greedy people around...

Keep building & flooding the market... For these people...

One failed to understand...
Expats focus is really not on Malaysia as whole....

They better off in neighbouring Singapore or even Thailand...
Ours really not competitive...

Property market still soft even after economy opening full force

Thailand yes.. but Singapore's cost of living is way too high for retirement.. not all expats are rich.. especially when you're not working during retirement

All my friends including myself see very brisk rental demand in our properties with good increase in rental. Property market os anything but soft for decent to well located properties.

It's just your location price and target market.

Very fortunate that you are seeing an uptick though perhaps not even at the levels it was pre-Covid. As a comparison do you know how overheated the rental market is in Singapore or Australia. They are at historical highs! Like 30% above previous peaks. Wealthy Malaysians - you really are better off parking your money elsewhere.

Singapore one mostly those working expats...
Thailand more towards retired expats 😁

Heck some Malaysian also considering to retire in Thailand 👌

Probably yes...
Location of the property do play major roles....

For expats market really gone already...
For Family locals... Just okay... Need to do really deep background checks.... Many bad cases....

Australia seems good

China told their students that their degrees won’t be recognized if they stayed on shore indefinitely driving this huge surge. This is on top of relatively high demand from new migrants coming in etc.

Malaysia does not really have demand levers beyond being cheaper than everyone else and that there is a substantial Chinese population which appeals to East Asians.

This post has been edited by Cavatzu: Mar 1 2023, 04:19 PM