/// West Malaysia Property News
Penthouse Prices in KL Hit Record
Levels
Secondary Property to Be Cheaper Says,
Property Agents
property sector, it is often
overlooked and prices
of secondary properties
have remained stable
throughout the years
without any extreme
fluctuations.
Property Hunter Expo, secondary market listings
Banyan Tree in Kuala Lumpur
Penthouse prices in Kuala
Lumpur have hit record
levels, with the latest unit
carrying a price tag of RM38
million or around RM3,200
psf.
This 11,984 sq ft penthouse
can be found at Four
Seasons Place Kuala
Lumpur. There are two such
units, and the owner intends
to keep one while the other
is being sold to an Asian
investor.
Notably, market watchers
are waiting to see if such
price can be matched or
surpassed by the next
project in Kuala Lumpur.
According to Foo Gee Jen,
C.H. Williams Talhar &
Wong’s managing director, it
could take three to five years
or even longer for Kuala
Lumpur to see a project
offer penthouses priced
above RM38 million.
Nonetheless, a number
of luxury projects have
emerged in Kuala Lumpur,
such as Harrods Hotel
& Residences, which is
being jointly developed by
Tradewinds Corp Bhd and
Qatar Holding LLC, and
Banyan Tree Residences
developed by Pavilion Kuala
Lumpur and Banyan Tree
Holdings.
Foo revealed that the builtup areas in these projects
range between 4,000 sq ft
and 6,000 sq ft.
While they are smaller
compared to that in Four
Seasons Place’s, the units at
the two projects carry higher
psf prices.
“Banyan Tree and Harrods
are selling their penthouses
at more than RM3,300 psf.
With different services and
finishings, it is possible for
the price to hit RM4,000 psf.
We will have to wait and see
if any developer can match
that,” noted Foo.
Assuming an average
price of RM3,300 psf, the
penthouses at Harrods
and Banyan Tree will cost
from RM14 million to RM21
million each.
At RM4,000 psf, the
penthouses will cost
between RM16 million and
RM24 million.
Tighter borrowing rules
and the government’s
curbs on property
speculation is set to
cause an influx into the
secondary home market
and lower prices, said
the Malaysian Institute of
Estate Agents (MIEA)..
According to the Penang
chapter of the property
agents body, prices in
the secondary market
previously owned houses
in matured locations and
established residential
areas could fall by as
much as 15 per cent.
“This year, we will see
an emerging market of
properties being put
up for sale by investors
who had been buying up
new properties under
the Developers Interest
Bearing Scheme (DIBS) in
2011,” said MIEA Penang
committee member
Michael Geh in a press
conference.
Referring to these
properties as “post-DIBS
properties”, Geh said
these units will probably
make up 30 per cent of
the secondary market in
the property sector.
DIBS is a structure under
which developers paid
for interest payments
prior to the completion
of the property. It will be
discontinued as part of
measures announced in
Budget 2014.
There are two main
drivers of the property
62
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sector: the primary
market, which are new
property launches by
developers with only 30
per cent market share,
and the secondary market
with 70 per cent market
share.
With the influx of
post-DIBS properties
from investors anxious
to dispose of their
investments, Geh said this
will increase the number
of units up for sale in the
secondary market.
Coupled with the
tightening credit
regulations making it
harder for home buyers
to get housing loans, he
said the prices of these
secondary properties will
drop by about 15 per cent
compared to last year.
Paradoxically, cheaper
housing need not
mean an increase in
transactions.
“We also expect to see a
decrease of transactions
by 15 per cent for the
first half of this year due
to the credit restrictions
in which home buyers
couldn’t get loans to
purchase homes,” he said.
This year, the secondary
market in Penang is
expected to offer up to
20,000 units of housing
within a price range
of RM50,000 and RM3
million per unit.
Though the market is the
main driving force of the
Geh, in announcing an
upcoming Malaysian
Secondary Property
Exhibition (MASPEX)
Penang 2014, said the
supply of secondary
properties is between
14,000 to 20,000 units
each year with an 80 per
cent sales rate.
“The property sector has
been on a slow downward
slide in the past one and
a half years and we are
now in the midst of the
slow downturn,” he said.
This is evidenced by
the secondary property
transactions, which
decreased in the last
three years.
In 2012, a total 15,964
unit worth a total RM5.26
billion were transacted
which was lower than
in 2011, where a total
16,939 units worth a total
RM4.9 billion were sold.
“Last year, between
January and June, a total
7,087 secondary property
units worth a total
RM2.63 billion, were sold,”
Geh revealed, saying this
could mean the whole
2013 transactions of the
secondary market could
be around 14,000 units,
lower than in 2012.
Geh said many home
buyers overlooked the
secondary market and
are often drawn into
checking out the primary
market only to turn away
disappointed as many
new project launches are
above affordable range.