Home in on Malaysia

Source : Sunday Times - 26 Apr 2009

An over-supply plus gloomy market sentiment are adding up to a rare buying opportunity for investors in Kuala Lumpur, particularly in the prime KL City Centre (KLCC) area.

Dr Lee Ville, president of ERA Malaysia, said: ‘In my personal view, the property market sentiment (of KL) is at its lowest since 2004.

‘This sentiment has sparked a price drop in the KLCC and Mont Kiara locality.’

He gave an example of Kiaraville, a development in Mont Kiara.

‘It was launched in 2005 at RM380 (S$158) per sq ft (psf) and today, there are some units being sold…as low as RM500 psf.’

At the peak, transactions of the property were in the region of RM600 psf, he said.

Mr Ivan Hoh, executive director of PropNex International, said: ‘We are seeing a slowdown in property prices in KL’s prime areas…we have seen a 15 per cent drop from last year.’

He added that ‘many Singaporeans like to buy in areas like Bangsar, Damansara, Mont Kiara, Bukit Bintang and KLCC area’.

‘As this is the capital city of Malaysia, rental yields are better than in other states.

‘Yields in the current market are about 5 per cent to 7 per cent, depending on the selling price of the property,’ Mr Hoh said.

TA Properties’ Idaman Residence, a luxury condominium in KLCC priced from RM950 psf, has units for sale.

Prices for its Idaman Villas, double-storey semi-detached units in the Damansara region with a built-up area of 3,692 sq ft or more each, start from RM500 psf.

Dr Ville said: ‘With current market sentiment, KL properties are at their most affordable and attractive.’

Penang market

Penang is a frequently overlooked but promising state for property investment. Its capital George Town, together with Malacca, received a Unesco World Heritage Site listing last year.

Mr See Kok Loong, director of Metro Homes, said home prices at Seberang Prai, which is on the mainland of Peninsular Malaysia, ‘have been low for many years’ due to ample land and lower purchasing power.

He said a standard terrace house on the mainland could cost between RM200,000 and RM250,000 whereas on the island, ‘where the prime area’ is, terrace houses could cost above RM500,000.

Dr Ville said: ‘There are high-end luxury condominiums along Gurney Drive such as Silverton, Regency, Millennium and 11 Gurney.

‘These fetch anywhere between RM450 psf and RM550 psf.’

Knight Frank Research said gross yields of upper-middle and high-end condominium units in Penang range between 4.5 and 6.5 per cent.

Property giant SP Setia is launching the third phase of Setia Vista - 29 two-storey terrace units with a built-up area of 1,700 sq ft each. Prices start from RM618,880.

Dr Ville said: ‘It is a great place to live or retire. After all, prices remain relatively cheap compared to the rest of our Asian neighbours.’