KL sees fewer launches
> For the quarter ended March 31, KL only saw 10 launches, compared with 12 a year ago
PETALING JAYA: The number of new residential projects and units launched in Kuala Lumpur was lower in the first quarter of this year (Q1 2018) compared with the corresponding period last year.
According to Henry Butcher Research, Q1 2018 only saw 10 launches compared with 12 launches a year ago, adding 5,746 units to the capital’s housing pool compared with 7,499 units added a year ago.
While this could be due to the uncertainty of the looming general election then, the property consultancy firm noted that there were more affordable offerings launched during the period, reflecting developers’ more cautious attitude within the context of a sluggish market.
March was the most active month during both periods as developers held back launches until after Chinese New Year. In March this year, there were six new launches, compared with five in the whole of Q1 2017. February was the least active month with only one launch.
“Of the 10 projects launched in Q1 2018, the focus appeared to have shifted away from soho types, compared with Q1 2017. Instead, developers focused their attention on apartments/flats with three such developments launched compared with just one in Q1 2017,” said Henry Butcher Research in the June 2018 issue of its Herald bulletin.
Three serviced residence projects were launched in Q1 2018 compared with four in Q1 2017 while four condominium projects were launched in Q1 2018 compared with five in Q1 2017. No landed residential projects were launched in both periods due to limited land 9% 15% 22% 18% 12% 12% 3% 9%
and high land costs.
“Looking at unit sizes, we note that most of the projects launched have built-up areas of between 801 sq ft and 1,000 sq ft, with six projects in Q1 2018 offering units of such sizes and seven projects in Q1 2017,” it said.
This is followed by units sized between 1,001 sq ft and 1,200 sq ft with four projects offering such units in Q1 2018; a similar trend was observed a year ago. However, there were no small-sized units launched in Q1 2018 whereas three projects offered units sized below 600 sq ft in Q1 2017.
In terms of pricing, five out of the 10 projects launched in Q1 2018 had units priced between RM401,000 and RM600,000 while four projects had units priced above RM1 million and three projects had units priced between RM601,000 and RM800,000. 11%
There were two projects offering units priced below the RM400,000 threshold and four projects with units priced between RM801,000 and RM1 million.
“On further analysis, we note that there were four projects priced below RM500 psf compared with only one project in Q1 2017. There were also four projects priced between RM751 and RM1,000 psf followed by two projects priced between RM501 and RM750 psf.
“This trend differs from Q1 2017 where the focus was mainly within the price range of RM501 to RM750 psf (five projects) and RM751 to RM1,000 psf (six projects) followed by the RM1,001 to RM1,500 psf band (two projects),” said Henry Butcher Research.
In terms of location, it noted that established areas like Cheras, Segambut, Wangsa Maju and Dutamas saw one new launch each in Q1 2018 while Setapak continued its wave of rejuvenation with two launches during the quarter.
Other areas where new projects were launched include Taman Desa, Bukit Jalil and Damansara Heights, which saw a trend of steady development to meet the demands of buyers and investors keen on these areas.
“Based on our data, Setapak marks the location of two new affordable developments in Kuala Lumpur in Q1 2018 with a price range of RM300 to RM500 psf followed by Segambut (one project, priced at RM350 to RM400 psf) and Jalan Kuching (one project, priced at RM450 to RM500 psf),” it said.
The more expensive developments were mainly located in Taman Desa, Bukit Jalil, Dutamas and Damansara Heights. These projects were priced between RM700 and RM1,000 psf.
Henry Butcher Research said Q1 2018 seemed to reflect a more cautious stance taken by developers and with the change of government, there could initially be a period of uncertainty as investors stay on the sidelines and await new policy directions.
“The cancellation of the HSR and MRT3 projects signalled a shift in priorities under the new administration and this could very well change the trajectory of the property market.
“In the longer term, a more transparent, just and clean government would enhance investors’ confidence in the economy and country, and bring about more positive vibes to the property market,” it said.