If you visited the Luxury Properties Exhibition 2008 at the Kuala Lumpur Convention Centre last March, you would probably walk away wondering what happened to all the real luxury properties in Malaysia. Around 34 developers were at the exhibition showcasing their products but the majority of what was being offered would hardly qualify as luxury properties.
Instead, exhibition visitors were enticed with properties in Templer Park, Bukit Gambang (near Kuantan) and Malacca, all outside Kuala Lumpur. There were also UK land, bungalow lots in Kuching (East Malaysia) and even oil palm plantation lots for sale.
Possibly one of the more interesting projects on display were properties in the Iskandar Development Region (IDR) in South Johor. Nusajaya has double-storey terrace houses going from RM256,000 while Danga Bay has a wide offering of villas and apartment units. However, investors have to bear in mind that the success of the IDR is still largely dependent on prevailing bi-lateral relationship between Johor state and Singapore. Cross-border traffic is also a long-standing issue which has yet to be resolved.
As for Kuala Lumpur properties showcased at the exhibition, some of them are located at Selayang, Sentul and Puchong – hardly prime residential areas.
An exception would be Anggun at Damansara Heights, a small freehold development with only six three-storey bungalows for sale. The smallest built-up area is 5,964 sq ft and the starting price is RM5.8 million. This works out to about RM972 per sq ft which is average for this exclusive neighbourhood. At the time of writing, four bungalows have already been booked.
Another interesting KL project showcased at the exhibition is Damai 206, an upmarket low-rise condominium block located off Jalan Ampang, the so-called Embassy Row. There are only 18 premium designer suites for sale with two units on every floor, with apartments coming in either 3,106 or 3,112 sq ft configurations.
Meanwhile, developer KH Land has launched the misleadingly named Kenny Heights Estate, which is actually located in Sri Hartamas, within earshot of a nearby mosque. While its location is good, with Kenny Hills and Mont Kiara as adjacent neighbours, it is not quite an upmarket neighbourhood by itself. But foreign investors, most of them Singaporeans and Hong Kongers, are undaunted. They snapped up 35 of the 49 units on sale. All the units are four-storey bungalows with a private 36-foot swimming pool. The smallest unit is 5,332 sq ft selling at RM4,798,800. This works out to about RM900 per sq ft for the freehold strata titled units.
At the rate prices for luxury properties in Malaysia are soaring, it would seem developers are building with just foreign buyers in mind, seeing as the average gross monthly income of Malaysians is RM3,686, according to the recently-released Household Income Survey 2007 report.
This may not be an ideal strategy, however, as “Very few locals would pay more than RM15,000 to rent a property in Malaysia,” Jenny Liew, a local property agent, told us. “Only expatriates who are top executives have housing allowances that can match such rentals but this is a very small segment of the market. There are only so many chief exceutives in town."
Further, foreign investors may be taken in by the hype played up by industry players that Malaysia’s property prices are "cheap" compared to Singapore or Hong Kong. Investors have to realise that at some point in time, they would have to let out their properties or sell them on the local market and if they are only looking at other foreign tenants or buyers, the market may be very small and competitive.
According to John Ching, director of CK-Ten (www.ckten.com.my), a company which assist foreigners under the Malaysia My Second Home (MM2H) scheme, "Foreigners coming in under the MM2H scheme usually buy condominium units, bungalows or land to build their dream homes. Condominium units are usually in the RM300,000 to RM1 million region while bungalows are usually in the RM800,000 to RM3 million range. Europeans tend to favour landed properties in the suburbs while Asians like Japanese or Koreans will look at condominium units within the city."
For the moment, however, the higher property prices back home and the favourable monetary exchange rates against the local ringgit, is enough incentive for the foreign investor to go into the Malaysian market.
Elsewhere at the popular Mont Kiara residential enclave, more new projects are being launched. Kiara 9, adjacent to the Garden International School is offering 16 exclusive 3 1/2-storey garden villas and 192 units in a 41-storey condominium tower. The villas with a built-up area of 4,450 sq ft has prices starting from RM3.7 million.
For the condominium units, built-up area starts from 1,661 sq ft and prices from RM998,600. That works out to about RM600 per sq ft before discount. The developer is offering a 15 per cent discount for early birds. At the time of writing, 90 units have been taken up. The only setback for this project is that they have only one access road which can become clogged with traffic during school hours. They are currently negotiating with the authorities for a second access road but there is no confirmation as yet. The developer is Mitrajaya Homes and this is their first foray in the Mont Kiara area.
Just next door to Kiara 9 is another new project called One Kiara which features a futuristic twin-tower design. Chris Low, director of Monday-Off Development, and a first-time developer says, "We intend to make One Kiara an iconic landmark and we are not sparing any expenses in terms of design. There will be features like an Olympic-size swimming pool and even two service lifts when the industry-standard is only one lift." The other plus point for One Kiara is that there have already planned for two separate entrances to their property to avoid traffic congestion during school hours. The launch is not due until mid-year but prices are expected to be in the region of RM700 per sq ft.
by Pete Wong (www.property-report.com)
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