While the high-end property market is fixated on Kuala Lumpur City Centre (KLCC) condominium units selling for over a million or two, there is an even greater buying interest for units around half a million Ringgit.
Apparently, condominium units priced at RM500,000 within KLCC are gaining increasing interest from local and foreign buyers, especially in the secondary market. Such units are usually below 1,000sq ft of built-up space. Thus, the main selling points include a desirable location and “brand” prestige.
According to Reapfield Properties (K.L.) Sdn Bhd sales division head William Goh, condominium units around RM500,000 attract a good mix of local as well as foreign buyers.
“The majority of local buyers would buy them for their own use. Maybe about 20 to 30 percent of local buyers are buying for capital appreciation or rental returns.
“Foreign buyers buy them for investment and also for their own needs. Many foreigners working here buy properties to take advantage of the expected trend of the Ringgit’s appreciation as well as capital appreciation. The abolition of the Property Gains Tax has taken away a big barrier for the purchase of property by foreigners.”
Properties available for sale for RM500,000 around the KLCC area easily cost RM1,000 per sq ft depending on project and view. For example, the Park View development at Jalan P. Ramlee has units with smaller built-up space from 535sq ft to 660sq ft.
At Marc Residence in Jalan Pinang, smaller units include those that span 493sq ft to 636sq ft. And at Seri Bukit Ceylon (Somerset) in the Bukit Bintang area, there are 640sq ft compact units.
The built-up space gets larger in locations further away from the city centre, such as:
* Mont’ Kiara Bayu, 1,000sq ft
* Casa Kiara in Mont’ Kiara, 1,268 sq ft
* Bangsar Indah, 1,500 sq ft
* Hartamas Regency, 1,467 sq ft
* Bangsar Bayu Angkasa, 1,500 sq ft
Popular areas
Foreigners favour certain locations within the Klang Valley:
* KLCC area
* Ampang Hilir/U Thant, embassy row
* Ukay Heights, near international school
* Mont’ Kiara, near international school
* Damansara
Several factors attract foreigners, namely:
* Condominium facilities
* Proximity to an international school
* Easy access
* Proximity to work place
* Existence of an expatriate community
* Freehold tenure although some buyers do not mind
Similarly, for local buyers, other popular locations include:
* KL Sentral
* Mid-Valley
* Hartamas
* Bukit Tunku (Kenny Hills)
* Bangsar
These locations are more upper middle-class areas with condominium developments at the RM500,000 price range. Local buyers look for an upmarket image or a prestigious address, promixity to town and commercial centre.
Also, locals now look for bigger built-up space. But at this price range, one would tend to look at developments further away from the KLCC area for a bigger unit.
Goh believes it is still a good time to buy. “Prices are expected to continue on an upward trend supported by strong local and foreign demand. The price trend from last year is expected to continue this year. Many properties that seemed expensive at one time, like in 2006, are now deemed reasonable, this is in view of the increase in material costs and overall development cost.”
Watch out
Goh advises that buyers will need to watch out for sellers trying to sell their units within the RM500,000 price range, when it should be in a lower price category.
This is because of the lower quality of the building material, facilities, property concept and branding.
Condominium units selling at RM500,000 are considered medium-range properties, due to an increasing number of new condominium units exceeding RM1 million in price. Historically, medium-range properties do not drop drastically in price when the market is on a downturn. - By The Star
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