Despite the subdued property market, more high-end condominiums were launched in the second half of 2016, with notable launches including Sentral Suites, The Estate, Setia Sky Seputeh, Alya Kuala Lumpur (Senada Residences) and Aira Residences, reported Malay Mail Online citing a Knight Frank Malaysia report.
“There were noticeably more launches and previews during the review period compared to the first half of 2016,” said Knight Frank.
In fact, seven high-end condominium projects – KL Trillion, Three28 Tun Razak, Le Nouvel, Setia Sky Residences (Divina Tower), KL Eco City, Serai Bukit Bandaraya and Nadi Bangsar – were completed during the period, bringing the excess number of such units to 46,047 as at end-2016.
The property consultancy expects 3,185 more units to enter the market by the first half of 2017 with the completion of seven more projects.
Knight Frank Malaysia managing director Sarkunan Subramaniam said the sales of said units have been affected by various factors including the weakening ringgit as well as the reluctance of banks to approve loans.
“2016 was a challenging year with both high-end condominium and office market subdued. This year, homebuyers will continue to face financing difficulties with banks holding out loans,” he said, adding that loan interest rates may increase, which in turn may affect investor’s returns.
Meanwhile, Knight Frank believes Putrajaya’s decision to raise the stamp duty rate for properties worth over RM1 million is a double-edged sword.
“Whilst this announcement is expected to further dampen the high end condominium segment in 2018, it may boost sales of million ringgit homes before 2018.”
After 2018, more developers are expected to price their products below RM1 million by offering smaller built-up and lesser furnishing, it said.
Looking ahead, Sarkunan is optimistic that the property market would pick-up by end-2017, following possible general elections.
“The hotel and logistic sectors are foreseen to do better, as investors look for better yields in this sector to diversify their portfolio.”
The retail property sector, however, is expected to face problems this year due to public sentiments on the increasing cost of living.
Image sourced from Getty Images
Diane Foo Eu Lynn, Senior Content Specialist at PropertyGuru, edited this story. To contact her about this or other stories email diane@propertyguru.com.my
