Mismatch in supply and demand widens
Optimism in the Kuala Lumpur residential market, including the high-end segment, remains cautious due to a mismatch in product offering and pricing affordability, according to Knight Frank Malaysia’s new Real Estate Highlights report.
The transaction volume of the city’s high-end condominiums and serviced apartments, or those in the pricing range of more than MYR1 million (USD243,000), amounted to 745 units in 2018, the highest figure since 2015. However, the pace of growth has not been commensurate with incoming supply, with 7,197 units due to be completed in the second half of 2019 alone.
Pressured by low sentiment for high-end homes, prices of new launches in this segment remained flattish during the first half, Knight Frank researchers noted. Home buyers were also spoiled for choice in the secondary market, with the average transacted price of high-end homes dropping 1.6 percent in the first half of 2019 when compared to 2018.
High-end condos and serviced apartments launched in H1 2019 were generally smaller in scale compared to last year and located on pockets of land, observed Knight Frank Malaysia managing director Sarkunan Subramaniam.
“Many developers are participating in the HOC (Home Ownership Campaign) as it presents a good opportunity for them to clear their existing inventories and is positive for the residential market,” said Sarkunan in a statement.
The HOC, extended to December, endows the residential market with such incentives as minimum discounts of 10 percent on the property price; a stamp duty exemption on property sales and purchase agreements for properties priced up to MYR1 million; and stamp duty exemption for loan agreements up to MYR2.5 million.
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