The Q4 outlook
> Local property landscape and what to expect
GENERALLY, things have been chugging along as usual one could say but look harder and you will notice that retailers, property developers included, have been coming up with all sorts of clever bargains and promotions to spur consumer spending. The economy is sluggish some say, and why not especially with many receiving the golden handshake sooner than expected and some being laid off.
According to a recent report from the Malaysian statistics department, Malaysia’s Leading Index (LI), which monitors the country’s economic performance in advance, showed a decrease. It also stated that our Coincident Index (CI), which measures current economic activity, also declined. Overall, Malaysia’s Consumer Price Index (CPI) has risen by 1.5%. Prices of most things have shot up – the people are cautious, hence, the economic growth in Q4 is expected to trudge along at an even slower pace. With that, we explore how the upcoming sloth-like scene will affect the property and real estate market, if it hasn’t already.
VIEWS AND COMMENTS According to the grapevine on the property scene, interest will remain high, but there will be doubts when it comes to the actual buying. The property market in Kuala Lumpur is anticipated to be subdued. One website stated that although the numbers are holding up, there is not much action, transaction-wise. Apparently, buyers with intention to sell claim they have not much choice as prices in wellconnected areas are not attractive, unless they sell and move out of KL.
SOME SOCIO-ECONOMIC ADVANTAGES THAT MAKE MALAYSIA ATTRACTIVE TO FOREIGN HOUSE PURCHASERS.
1. Relatively low living costs compared to other developed countries. 2. Tourist friendly environment that is welcoming to all nationalities. 3. English is widely used in
communication in general. 4. Infrastructure, transportation and global connectivity is relatively good. 5. Peaceful and safe place to live in.
However, according to Knight Frank, Malaysia, the Malaysian market offers the best market value for global real estate investors. It records the highest yields and the least volatility across the markets in the Asia Pacific. The global real estate consultancy firm’s Malaysian office managing director Sarkunan Subramaniam suggested that buyers and sellers look at the step up on the local transport infrastructure development which increases mobility and improves connectivity throughout Greater KL. While Sarkunan viewed this development as giving the city an edge, many expect the new MRT and LRT stations to transform area dynamics and more.
Malaysia Property Incorporated general manager Veena Loh, however, felt that local real estate
6. Free from natural disasters. 7. Healthcare and hospitals provide modern and up-to-date services. 8. Variety of food caters to global
tastes. 9. Availability of international and private schools and higher education institutions. 10. Housing and property ownership schemes open to foreigners. agents need to get familiar with cross-border property investment knowledge and embrace globalisation. In this light, we take a look at some developers who have actually taken it in their stride to develop projects and market their developments abroad.
FOREIGN INTEREST Many developers are seen to be reaching out to foreign buyers and consumers of the higher-income bracket. An example is Sunsuria Berhad which teamed up with Taiwan-based Welcome Global Co Ltd. The partnership will see the rise of a Korean-themed integrated project being developed on an 8.48-acre plot in Sepang, Selangor. Called Sunsuria Provence Village in Sunsuria City, the project will offer serviced apartments, a wedding house with a themed garden, a Korean-inspired shopping mall and a boutique hotel. There is also I-Bhd, the developer of 8KiaPeng@KLCC which reports that a large percentage of its buyers are foreigners from China, Hong Kong and Singapore.
Similarly, another developer which has managed to attract foreign investors and high-end property buyers is the developer of The Ritz-Carlton Residences, located in Jalan Sultan Ismail. Its developer Wangsa Tegap Sdn Bhd, a wholly-owned subsidiary of Berjaya Corporation Berhad, recently held a media sneak preview of its luxury suites that come in three design concepts under the globally renowned and awardwinning Peter Silling & Associates label.
The soon-to-be launched residences have already received a 30% take-up by Taiwanese buyers. According to Wangsa Tegap director Datuk Francis Ng, the company hopes for a 50/50 take-up of foreign and local buyers. Structure-wise, the project is already completed. Minor interior touch ups and systems are being addressed as this article is written.
In the southern regions of the country, it makes sense for Singaporeans to invest in property. An online website also reported that the mainland Chinese are huge investors of Malaysian property, followed by Indonesians and Indian nationals.
CONCLUSION No doubt, times may require Malaysians to tighten their belts. However, for the foreigner whose local currency is strong, the cost of living in Malaysia is awfully cheap.
However, overall, an online property research portal claimed that growth in the country’s construction sector is set to moderate over the coming years, decelerating into 2017. But like all things that go up must come down and vice versa, the transport segment will bring hope and drive overall growth, while the nonresidential segment will leverage on this growth.
The above is not the best piece of news yet still, property investors long in the industry will tell you the coming period makes good a time to buy. What more with news reports claiming foreign investors have returned to Bursa.
While unaffordability remains an issue for majority of the locals, prices have somewhat moderated slowly but surely. People are also starting to look at property again and looking at it with more realistic expectation plus with a fine-toothed comb. Developers are said to have begun to put in more effort in listening to what the people want, adding value to what is on the table. The situation has also led people to become more acceptable to living further from the city for the sake of lower housing prices, or living in smaller built-up living spaces.
On the whole, while some developers tap into the foreign market to attract buyers, others delve into providing more affordable homes and some offer more attractive rebates and promotions. Overall, the market is still expected to be sluggish.
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