Rebecca Foster | Feb 12, 2013 | Comments 0
Market prices of high-end condominiums in Kuala Lumpur are expected to remain stable this year
Developers in Kuala Lumpur are expected to delay the launch of high-end condominiums until market confidence improves, revealed property management firm Jones Lang LaSalle. According to research, developers are more likely to focus on the mid-market by building smaller units which have lower prices.
Developers are also expected to provide financial incentives such as interest bearing schemes, free legal fees on Sale and Purchase Agreements and loan agreements, according to Jones Lang LaSalle's report.
Market prices of high-end condominiums are expected to remain stable with some nominal upside in 2013, according to the report. Rentals are anticipated to be generally stable despite downward pressure from fresh supply.
Jones Lang LaSalle also expects that higher quality condominiums launched in the short term will command a premium on capital values and rental rates. Premiums registered by capital values are anticipated to be greater than those registered by rental rates, as the influx of new supply in the coming 24 months is expected to outstrip demand.
Q42012 saw the completion of three projects in Kuala Lumpur and the launch of one high-end project, according to Jones Lang LaSalle.
Rental rates remained stable in Q4 last year while sale volumes were slow. Yields remained steady at 5 percent.
The number of high-end launches continued to decelerate as developers concentrated on mid-range condominiums, according to the report.
Amphil Corporation Sdn Bhd achieved a 21 percent sales rate with its Rimbun development after launching the project in Q42012. Selling prices ranged from RM950 (US$306) to RM1,100 (US$355) per sq ft.
Market stock in Kuala Lumpur increased to 22,904 units from 21,393 units in Q3 last year upon the completion of 1,511 units within three projects including Amarin Wickham, St Mary Residences and Regalia @ Sultan Ismail.
In Q42012 the average capital value was recorded at RM 7,147 (US$2,306) per sqm and the average gross rent was recorded at RM416 (US$134) per sqm per year, according to research.
The steady market conditions resulted in an average yield of five percent.
Filed Under: Malaysia • News • News by Country
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