Re: Other parts of Malaysia - KL
Rental rise seen for high-rise luxury residential properties
Posted on | March 9, 2013
By THE STAR
PRICES of luxury high-rise residential properties within the Klang Valley are set to see an increase in rentals this year, but are unlikely to reach levels that were achieved before the global financial crisis hit in 2008, say experts.
Malaysian Institute of Estate Agents (MIEA) president Nixon Paul says he is optimistic about the outlook for high-end residential condominiums this year.
“Rental values have dropped from its high (in 2008) but have since stabilised and are slowly on its way up. We see a slow and gradual move upwards but not a dramatic increase,” he tells StarBizWeek.
Nixon says after the financial crisis hit in 2008, rentals of high-end residential condominiums “took a beating.”
“The slowdown in Europe and the US caused by the financial crisis at the time caused many expatriates to pull out and there was also an oversupply of condominiums then.
“But things are more stable now in Europe and the US. Furthermore, various Government initiatives under the Economic Transformation Programme are helping to attract foreign investment. The oil and gas sector is also responsible for attracting a lot of expatriates,” he says.
MIEA deputy president Siva Shanker is also optimistic about the high-end residential sector this year.
“Barring any unforeseen circumstances in Europe, the US and China, we’re looking at fairly reasonable growth in both rents and occupancy rates of high-end condominiums in areas like KLCC, Mont’Kiara, Bangsar and Ampang.”
Siva recalls that after the global financial crisis hit in 2008, many companies in Europe and the US started having financial difficulties and either pulled back their employees or reduced the quantum of their employees’ housing loans – which had an adverse impact on the local high-end condominium market.
“Because many companies were restructuring around the world, there was a drop in high-end rental market. Rents came down by between 30% and 35%. It also did not help that we had a huge oversupply situation. Developers were building but the expatriates were returning back to their home countries.”
At this point, occupancy rates dropped while vacancies rose, says Siva.
He says that many expatriates that remained in the country moved to cheaper apartments.
“High-rise condominiums within the KLCC area suffered the most. There was a lot of supply that came in between 2007 and 2008. Many investors bought them and some developers promised expected rentals of RM20,000 a month!
“But in the last couple of years, we are seeing a recovery. Many expatriates are coming back. We haven’t recovered to the pre-financial crisis days but condominiums within the KLCC area is doing well. We believe these apartments have an occupancy rate of 80% or more, presently.
Nixon meanwhile says it was difficult to determine current rental rates of high-end condominiums as there were “too many variables.”
“Rental rates depend on a lot of factors. Are the units fully or partly finished? Is it on a higher or lower floor? Does it have a great view? There are a lot of variables,” he says.
According to C.H. Williams Talhar & Wong’s property report card for Klang valley in the first half of 2012, the overall luxury condominium market during the period faced a competitive market environment.
“These could be due to the tightening lending guidelines introduced by Bank Negara as well as the reinstatement of Real Property Gains Tax as of Jan 1, 2012. On the demand side, the sales rate was stable.”
As at the first half of 2012, it said the total supply of luxury condominium in Kuala Lumpur increased by 2.2% from 21,771 units (137 developments) in 2011 to 22,268 units (140 developments).
“Generally, the average occupancy rate for existing luxury condominium in KL has been on a downtrend since 2008 except for the Kenny Hills area. In the first half of 2012, the average occupancy rate further decreased by about 5% to 61.6%.
“Both condominiums and serviced residences experienced the downtrend registering occupancy rates at 63.2% and 59.5% respectively.”
It said prices of luxury condominiums in KL have remained stable as compared to 2011.
“In the first half of 2012, two new launches were announced. However, sales prices in KLCC area are estimated to range between RM800 per sq ft and RM1,600 per sq ft. The Pavilion Banyan Tree maintained sales prices at an average RM2,000 per sq ft.
“In terms of rental levels, the average asking rental levels of luxury condominiums have remained stable, ranging from RM5 per sq ft to RM6.50 per sq ft monthly in KLCC and Ampang Hilir / U-Thant. Other areas such as Bangsar and Mont Kiara are asking about RM4 per sq ft to RM6 per sq ft per month.”
- Malaysia Real Estate News
You might also like
Dijaya’s condo named best high-rise project
By THE STAR PETALING JAYA: Dijaya Corp Bhd's golf-fronted luxury condominium development, Tropicana...
Open for preview – Hijauan on Cavangh, Singapore. Low rise luxury apartments. A prestigious developement by SDB Asia Pte Ltd
Open for preview - Hijauan on Cavangh, Singapore. Low rise luxury apartments. A prestigious developement...
For Sale – Hijauan on Cavangh, Singapore. Low rise luxury apartments. Freehold. A prestigious developement by SDB Asia Pte Ltd
For Sale - Hijauan on Cavangh, Singapore. Low rise luxury apartments. Freehold. A prestigious developement...
Rehda: Residential property prices on the rise
By BUSINESS TIMES It is still a good time to buy property as the market is heading upwards, says Real...
Thumblated Related Post
Category: Condominium/Apartment, Kuala Lumpur
Search
Custom Search
.
Categories
Select CategoryAdvertisements Commercial Foreign Industrial ResidentialForeign News SingaporeMiscProperty Market News Commercial Properties Condominium/Apartment Exhibitions/Trade Shows Hospitality Industrial Properties Land Mixed Development Office Space REIT/Property Investment Residential Properties Shopping MallsState Johor Kedah Kelantan Kuala Lumpur Malacca Negeri Sembilan Pahang Penang Perak Putrajaya/Cyberjaya Sabah Sarawak Selangor TerengganuUncategorized
Archives
Select Month March 2013 February 2013 January 2013 December 2012 November 2012 October 2012 September 2012 August 2012 July 2012 June 2012 May 2012 April 2012 March 2012 February 2012 January 2012 December 2011 November 2011 October 2011 September 2011 August 2011 July 2011 June 2011 May 2011 April 2011 March 2011 February 2011 January 2011 December 2010 November 2010 October 2010 September 2010 August 2010 July 2010 June 2010 May 2010 April 2010 March 2010 February 2010 January 2010 December 2009 November 2009 October 2009 September 2009 August 2009 July 2009 June 2009 May 2009 April 2009 March 2009 February 2009 January 2009 December 2008 November 2008 October 2008 September 2008 August 2008 July 2008 June 2008 May 2008 April 2008 March 2008 February 2008 January 2008 December 2007 November 2007 October 2007 September 2007 August 2007 July 2007 June 2007 May 2007 April 2007 March 2007 October 2001
