Category: Media Room - Page 3

Oct 06

Suburban lifestyle option for first-time housebuyers

By koizumi Media Room

Half a decade ago, few people knew where Puncak Alam was, and those who did thought it was on the other side of the world. City & Country took a drive there one recent morning, and along the way, saw gleaming modern buildings giving way to plantation land and kampung houses.

This article first appeared in theedgemarkets.com. View source here.

Formerly an oil palm estate under the Federal Land Development Authority (Felda) in a locality commonly known as Bukit Cherakah, Puncak Alam has become more vibrant and modern as new developments mushroom. Connectivity has improved by leaps and bounds and more amenities and facilities have been added.

Puncak Alam is a 14,000-acre township in the Kuala Selangor district that has the capacity for a population of 350,000, according to information provided by property agents.

It was developed by Bukit Cherakah Development Sdn Bhd in the late 1990s, but Puncak Alam Housing Sdn Bhd took over as the principal developer of the township in 2001.

Subsequently, Puncak Alam Housing parcelled out parts of the land for joint ventures with other developers, which resulted in numerous sub-townships. Currently, Puncak Alam comprises mainly the residential component, with a small portion for commercial and industrial purposes.

According to Landserve Sdn Bhd executive director Tan Kim Seng, Puncak Alam is bounded by undeveloped land, with the Kuala Lumpur-Kuala Selangor Expressway (Latar) and Bandar Tasik Puteri in the north, Jalan Sungai Buloh and Guthrie Corridor Expressway (GCE) in the east, Jalan Bukit Cherakah and Kampung Bukit Kapar in the south, and West Coast Expressway (WCE) in the west.

There is a wide range of amenities such as shopping destinations (Tesco and Econsave with Jaya Grocer in Eco Grandeur), primary and secondary schools (Sekolah Kebangsaan Puncak Alam and Sekolah Menengah Kebangsaan Puncak Alam), recreational facilities (Bukit Cherakah Forest Reserve and Puncak Alam Golf Driving Range) and shops, clinics, petrol stations and banks.

The township is strategically located northwest of the Klang Valley and easily accessible from all major conurbations, says MacReal International Sdn Bhd associate director Gan Boon How.

It is linked to the North-South Expressway, which is connected to GCE via Jalan Batu Arang, and Latar via Jalan Bukit Cherakah. From Kepong, Klang and Shah Alam, it is connected via Jalan Sungai Buloh, Jalan Bukit Cherakah and Persiaran Mokhtar Dahari respectively.

Two upcoming expressways that will connect to it are WCE and Damansara-Shah Alam Highway (DASH).

WCE will connect Puncak Alam to Klang and Banting in the south and Kuala Selangor and Taiping in the north. DASH will be the main link between GCE, New Klang Valley Expressway (NKVE), Damansara-Puchong Expressway (LDP) and Penchala Link. It will also be the main link between the township and Damansara, providing swift access to Petaling Jaya and Kuala Lumpur.

The most prominent landmark in Puncak Alam is the Universiti Teknologi MARA (UiTM) Puncak Alam campus, completed in 2009. A teaching hospital will be completed soon.

Nawawi Tie Leung managing director Eddy Wong says the university acted as a catalyst for development. It brought in other developers, which introduced new concepts such as integrated developments with gated and guarded facilities, lush landscaping and generous open spaces.

“These are targeted at the mid-range to higher-end segments of the market. Previously, developments there were predominantly of the lower-end to mid-range segments,” he says.

Value for money

With UiTM and other tertiary institutions such as Universiti Selangor and Malaysia-Japan Technical University serving as a catalyst, Puncak Alam has become a hot spot for own stay or investment, according to Tan and Gan.

“Generally, Puncak Alam has a sustainable rental market driven by demand from UiTM students and staff,” Tan says.

Gan says the asking rent is 30 sen to RM1.50 psf for a landed home and 50 sen to RM1 psf for a high-rise unit.

Tan notes that the township has commendable infrastructure, which includes a modern network of roads and highways that puts Puncak Alam within a 40-minute drive of Shah Alam, Klang and Kepong.

Wong concurs: “The improvement in infrastructure and connectivity adds to the appeal, as it does not seem too far away anymore.”

Property consultants believe the low property price in Puncak Alam is the main attraction for homebuyers and investors.

“The types and prices of the properties offered are good enough and value-for-money compared with major cities within the Klang Valley,” says Gan.

Suburban lifestyle

Puncak Alam has a good reputation among homebuyers, especially first-time purchasers looking for a suburban lifestyle, as there are ample facilities there, says Gan. “The property price is still reasonable and cheaper compared with those in urban areas in the Klang Valley.”

He observes that the developers that have projects there generally target young married couples, the middle 40% (M40) and bottom 40% (B40) income group. “Within this township, buyers can still get a big house with an affordable price tag.”

Another target group is staff from UiTM, some of whom prefer to stay in gated and guarded landed developments.

He also notes that there are retirees looking to buy in the area, owing mainly to the location, which is still relatively peaceful but yet not lacking in facilities and amenities.

Wong says the township attracts families with young children who are looking for affordable landed housing that is not too far away from the Kuala Lumpur city centre. “With property prices in Kuala Lumpur and Petaling Jaya beyond the reach of most of the younger generation, there is no choice but to look farther afield, especially for those who prefer landed housing.”

He notes that this area is now more accessible and appealing, with the completion of Latar and GCE. “The trade-off is perhaps the choice between a landed property there and a smaller apartment closer to the city centre.”

Meanwhile, Tan observes that properties such as 2-storey terraced houses and apartments in gated and guarded communities are seeing the most demand in Puncak Alam.

In the past decade, Gan points out, the improvement in infrastructure and amenities in the township has attracted many developers and the area is more vibrant now.

Developers with projects in the township include Eco World Development Group Bhd (EcoWorld) with Eco Grandeur; Worldwide Holdings Bhd with Puncak Bestari, Puncak Bestari 2 and Daunan Worldwide; and LBS Bina Group with LBS Alam Perdana. Others are IJM Land Bhd with Shah Alam 2 and Ambang Suria; Oriental Interest Bhd (OIB) with Myra Alam; MKH Bhd with Hillpark @ Shah Alam North and Pelangi Seri Alam; Guppyunip Group with Puncak Alam Jaya; and Perfect Eagle Development Sdn Bhd with Aquila.

Tan says: “These developers have transformed the area by introducing numerous types of houses with modern designs. This has gradually attracted medium-scale industrial developments and users to move to Puncak Alam. It is a corridor for growth, and we expect more homebuyers will consider buying and living there.”

Gan concurs. “It has become a new growth area that is destined for bigger things, and this is evident in the growing presence of property developers there.”

“Puncak Alam, together with Sungai Buloh, provides a viable alternative to home seekers looking for landed housing that is affordable and located not too far away from Kuala Lumpur or Petaling Jaya,” says Wong.

Tan notes that, over the years, the secondary market has seen a growth in prices. For example, a 2-storey terraced house with a land area of 1,400 sq ft was transacted at RM490,000 this year versus RM410,000 in 2014, representing a 19.5% increase over a period of six years.

Last year, a 2-storey semi-detached house with a land area of 1,916 sq ft was transacted for RM475,000, an increase of about 8% from the RM440,000 recorded in 2015.

In addition, an apartment with a built-up of 680 sq ft saw a 27.3% increase in price from RM110,000 in 2015 to RM140,000 this year.

Need for mall and hospital

Wong says that while there is an absence of a shopping mall in Puncak Alam, Tesco, Econsave and convenience stores are available.

Gan says the nearest malls are probably Setia City Mall, Star Avenue Lifestyle Mall, 1 Utama Shopping Centre and IPC Shopping Centre, which are 20km to 30km away.

“Students and residents need to travel quite a distance to malls. Current or future developers in the township can look into developing a shopping centre for the residents. It will also attract more potential buyers or investors to the area,” he says.

Gan also notes that there is a lack of medical facilities. The nearest are Hospital Shah Alam and Hospital Sungai Buloh, which are 27km and 31km away respectively. “More people would be attracted to the township if a new hospital were to be constructed,” says Gan.

Tan agrees. “Given its growing population, it is about time for Puncak Alam to have a hospital.”

He also observes that the population in the township has increased significantly over the decades. “Traffic can be heavy, with bottlenecks seen at Persiaran Mokhtar Dahari. We believe DASH and WCE will resolve this.”

What the future holds

Despite the challenges, the future of Puncak Alam is positive and promising, say property experts.

“Given the improvement in road connectivity and amenities, Puncak Alam will become a more desirable residential address,” says Tan.

Gan agrees: “It has the potential to become a township for young families. Meanwhile, the new developments that possess commercial and industrial components will be able to attract industry players, and that will create more job opportunities and spur the local economy. Soon, the area will see an increase in population, and an improvement in living standards and the environment.”

As for Wong, he says, “A preference for landed housing will continue to be a top priority in the purchase consideration for most Malaysians, apart from the price point of the property, the location and its accessibility. Puncak Alam ticks all the boxes in this regard.”

Aug 28

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Hunting for properties with good rental yield

By koizumi Media Room

When investing in property, both rental income and capital appreciation must be taken into account. For long-term investments, assets that can generate consistent and good revenue stand out.

This article first appeared in theedgemarkets.com. View source here.

Nawawi Tie Leung Property Consultants director and regional head of research and consulting Saleha Yusoff believes that moving forward, investors will diversify their assets not only to include those with room for value appreciation, but also quality assets that can bring in stable cash flow.

“More investors are putting greater weightage on rental yields while continuing to hunt for property bargain buys,” she tells EdgeProp.my.

According to Savills Malaysia managing director Datuk Paul Khong, Malaysian residential property investments have always been more focused on capital appreciation as rental yields are usually low at about 4% per annum which could hardly cover housing loan repayments.

Although property prices have retracted a little today, the current price levels are still higher than those in the period from 2010 to 2012, he says.

On the other hand, rental rates have generally moved sideways, leading to lower gross rental yields.

Saleha: Rental housing demand could be maintained as more people are delaying their house purchase decision and opting to rent instead. (Photos by Low Yen Yeing/EdgeProp.my)

Nonetheless, he notes that when looking for bargains in the current slow market, investors are counting on properties that offer medium to long-term capital appreciation and good rental yields.

Although average rental returns overall are generally low, there are exceptions especially among high-rise homes in some of the Klang Valley condominiums and serviced apartments listed on EdgeProp.(see table).

Where and what to look for?

For those scouting for properties with good rental yield, what should they be looking for?

Khong from Savills shares:

Khong: When looking for bargains in the current slow market, investors are counting on properties that offer medium to long-term capital appreciation and good rental yields. (Savills Malaysia)

First, go for areas which are popular among expats, single professionals and yuppies, such as Damansara Heights, Bangsar, Mont’Kiara, Sri Hartamas, Desa ParkCity, Taman Tun Dr Ismail (TTDI) and some areas in Petaling Jaya.

Secondly, check out the more affordable locations that are close to workplaces that attract working crowds and young families. These locations include Cheras, Puchong, Bandar Bukit Jalil, SS2 of Petaling Jaya and UEP Subang Jaya (USJ), to name a few.

Thirdly, look at areas close to colleges or universities such as Section 17 Shah Alam, Bandar Sungai Long and Setapak, for tertiary student-driven rental demand.

Khong suggests choosing matured and populated residential areas with ample facilities and amenities; while proximity to the city centre is a plus point, as it means being near to job centres and entertainment hubs.

Other draw factors are international schools nearby and good connectivity such as highways, public bus and rail services.

Nawawi’s Saleha concurs and says the housing rental market at established and matured areas close to public transportation and comprehensive amenities tend to stay resilient in times of uncertainty, compared to other areas.

Khong stresses that understanding the supply in an area is important, because in certain new and developing areas, rents could possibly be impacted if there is large incoming supply.

Apart from the location factor, Saleha reminds investors to look for the right unit sizes, well-managed properties and safe neighbourhoods.

Also one should not forget that purchase price is an important factor in determining rental yield. With buyers having a bigger say in the current market, it is a good time to start hunting for bargains in 2H2020 and into 2021, Khong opines.

Will rental rates drop?

The Covid-19 outbreak and the ensuing Movement Control Order have left many struggling with pay cuts and job losses. Not only have mall and office landlords offered rent relief to their tenants, some residential landlords have also been cutting rents to aid their existing tenants or attract new tenants.

How then would the housing rental market fare in the future?

Saleha believes that the Covid-19 pandemic and the weak local and global economy will affect rental rate growth in commercial and residential properties.

“However, the housing rental demand could be retained as more people are delaying house buying decisions and opting to rent instead.

“This is because housing affordability is still an issue in Malaysia. The Department of Statistics Malaysia (DOSM) in May 2020 projected that the unemployment rate would range between 3.5% and 5.5% in 2020 owing to Covid-19, showing that more are losing income. We expect more people will opt to rent instead of buying a home,” she adds.

According to DOSM, the unemployment rate rose to 5.3% in May 2020, before dropping to 4.9% in June 2020 which is still the highest rate in 30 years.

Khong also believes that rental rates will be impacted in the short term, but rental demand is expected to remain fairly stable as the need for space is still strong in the Klang Valley where housing tenants mainly comprise students, single professionals, young couples as well as young families who have yet to buy their own homes.

“Nonetheless, there could be rent compression towards 2H2020 due to the tough business environment and market conditions.

“Landlords are slightly more accommodative now in terms of rent to retain their existing tenants. Many are giving rental discounts since the Covid-19 lockdown periods,” he highlights.

Potential sustainable – Desa ParkCity

As more vertical homes come up in Desa ParkCity, the rental market of the upmarket township has become more vibrant in the recent few years, attracting expats and young families.

Savills Malaysia managing director Datuk Paul Khong likes the self-contained township for its with various amenities and the proximity to Kuala Lumpur city centre.

Although the general high-end rental market is expected to be impacted by the economic slowdown, Khong believes that Desa ParkCity’s rental demand would be sustainable in the medium to long term, thanks to its location, brand positioning and master planning.

He notes that Desa ParkCity’s rental pattern has been rather stable in the last five years, primarily due to the limited supply in the township as the developer ParkCity Holdings is able to control the supply by dictating the new launches into the market.

“In other prime areas, multiple landowners in a single location will continue to build and cause an influx of new supply which affect rental trends in the vicinity,” he shares.

Located close to matured areas such as Kepong, Petaling Jaya and Mont’Kiara, a variety of markets, shopping malls, banks, hospitals and commercial hubs are available nearby.

Jul 28

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Cover Story: Buying properties in a low interest rate environment

By koizumi Media Room

The overnight policy rate (OPR) is currently at a record low of 1.75%. In May last year, Bank Negara Malaysia cut the OPR to 3% — the first revision in more than a year at the time. Before that, the OPR had been kept at 3.25% since January 2018.

This article first appeared in theedgemarkets.com. View source here.

The central bank subsequently announced more OPR reductions, and with the latest 25-basis-point cut on July 7, the rate has been reduced by a total of 125bps so far this year.

Hong Leong Investment Bank Research (HLIB Research) does not discount another 25bps cut to 1.50% as early as Bank Negara’s next monetary policy committee meeting in September, as economic activity is expected to remain weak and inflation prospects modest.

“Despite expectations of gradual improvement in Malaysia’s growth prospects, the pace and strength of the recovery remain subject to downside risks emanating from domestic and external factors,” it says in a report.

HLIB Research adds that policy measures implemented domestically to mitigate the negative impact of Covid-19 will lapse in October, putting downside risks on the economy, while sluggish and uncertain growth could lead to further job losses and deter investment.

A standstill

Many have said that now is the best time to buy a property because of the low-interest rate and willingness of developers and property owners to sell their properties at lower prices to maintain cash flow.

Photo by Low Yen Yeing/EDGEPROP.my

Nevertheless, the Movement Control Order (MCO) and the subsequent Conditional MCO that was imposed to contain the Covid-19 pandemic have hit the economy significantly. Businesses are closing down and many employers are cutting their employees’ salaries to keep their companies afloat.

How badly has the property market been affected during the MCO period?

Activity in terms of new launches and transactions is expected to be slow in the residential market in 2020 amid the economic headwinds and job insecurity. Developers are focusing on clearing their inventories instead of new launches.

Nawawi Tie Leung managing director Eddy Wong tells City & Country that the larger concern on everyone’s mind is the Covid-19 pandemic, its impact on the global economy and the impending recession with its attendant problems such as distressed companies and job losses, which will affect homebuyers’ sentiment.

“This is against the backdrop of the property market being in an oversupply situation even before the pandemic,” he says.

There are fears that there will be another round of MCO if the Covid-19 situation cannot be controlled. If that happens, it will further dampen economic and job recovery. The chain of effects may result in more fire sales.

Property consultants generally do not expect to see fire sales for now — at least not until after September — due to the six-month loan moratorium announced by Bank Negara that provides financial relief to many people.

While the number of fire sales in the property market is not high at the moment, CBRE|WTW managing director Foo Gee Jen observes that there may be isolated cases of more desperate sellers mainly because they are experiencing cash flow problem.

“Lately, sellers have been more receptive to offers by prospective buyers. Similarly, in the capital market, the Securities Commission Malaysia commented that there has been no escalation in redemptions of unit trusts so far. This could be interpreted as the market being in contemplation and in a ‘wait and see’ mode,” he says.

Photo by Low Yen Yeing/EDGEPROP.my

“The prudent lending by banks in the past could have helped to ensure property owners, by and large, possess holding power. In fact, guidelines by Bank Negara advocate more flexibility and leniency among banks in loan restructuring and refinancing. This bodes well for keeping default risk down, and if the situation turns bad, we expect the market will be resilient enough not to crash but experience a soft landing.”

Wong notes that the fire sales will most probably come from property owners who may have overstretched themselves by buying several properties during the good times and are now finding it difficult to sell or rent out the properties. There are also those who have lost their jobs and can no longer afford to service the loans.

“The OPR cut will assist some of these owners, bringing some respite to those affected by job or salary cuts. This is on the assumption that the housing loan interest rate is floating, which means it moves in line with the prevailing interest rate and is not a fixed rate housing loan,” he says.

Lower OPR and buying properties

With the lower OPR, property consultants reckon that now is a good time to buy a property, as a low interest rate means lower barriers to financing and owning a property. They believe the residential sector will remain a buyer’s market moving forward, with further discounts, rebates and promotions from developers.

It is important for buyers to be selective and look out for properties with good location, connectivity and amenities. As for investors, they need to make sure that the property can be rented out easily, or they have sufficient cash flow to cover the mortgage.

Foo says in the past five years, sales in the primary market and overall transaction volumes in the residential market generally moved in tandem with the loan approval rate for residential purchases (see chart).

“In 2019, these three indicators shared an upward trend. In the present scenario, low interest rates and the expected further cut in OPR would incentivise residential purchases for those who are financially sound,” he explains.

If and when Bank Negara adjusts the OPR upwards, it would also mean that the economy is recovering, and the higher inflation rate would then translate into higher property prices. Wong says the adjustment of interest rates depends on several factors, such as the recovery of the economy, the outlook for inflation, business confidence and the ringgit exchange rate.

“Given that the impact of the pandemic is global, we think the recovery may take a little while longer to gather momentum … but it is definitely a good time to buy as developers will be offering discounts and rebates to persuade homebuyers to buy in the current market,” Wong says.

“It is no doubt a buyer’s market and those who are considering buying a property should capitalise on the current depressed market and seize the opportunity to secure a good buy. This is probably a once-in-a-lifetime opportunity that should not be missed.”

Foo notes that the fundamental cause and implications of the Covid-19 crisis are different from the Asian and global financial crises, and that past trends may not be relevant in this unprecedented event.

“Monetary adjustments are the prerogative of Bank Negara, bearing in mind the central bank also manages inflation and currency. The general expectation is for more cuts in the OPR in the near future before we could see an upturn in the economy,” he says.

“[A higher effective lending rate] will increase the mortgage repayment for non-fixed rate loans, while the cost of borrowing for new applicants will increase. It is one of the factors driving up house prices over time.”

For residential property loans, the effective lending rate is calculated by adding the base rate (BR) and the spread rate. As the BR is based on the banks’ benchmark cost of funds and the statutory reserve requirement, banks can revise the BR at any time, even when there is no change to the OPR. Meanwhile, the spread rate is determined by the borrower’s credit risk and liquidity as well as the banks’ operating cost and profit margin.

Foo has calculated the differences in terms of monthly repayment, total loan payable, total interest payable and ratio of interest to principal depending on the effective lending rate (see table). The illustration is based on a property valued at RM500,000, with a total amount financed of RM450,000 (10% or RM50,000 for down payment) for 35 years.

At an effective lending rate at 3.75%, the monthly repayment of the home loan is RM1,925.57. At the end of the loan tenure, the buyer would have paid RM808,741 in total, with 44% being interest charges.

Meanwhile, if the loan were at an effective lending rate of 3.25%, the monthly repayment would be RM1,795.22. After 35 years, the total loan paid would be RM753,992, of which 40% is for interest payment.

“In every crisis, there will be opportunities to pick up good assets. Property is a hedge against inflation and Malaysian properties have lived up to that expectation in the past. The principle of real estate such as location and quality will continue to be the main determinants of property value,” Foo points out.

“For homeowners, do your research and buy within your affordability, and for investors, stick to the basics of yields and returns. As we adapt to the new norm of social distancing, it is time to rethink our idea of ‘home’ with regard to safety and privacy.”

Jul 27

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New norm in workplace putting pressure on office rentals growth

By koizumi Media Room

PETALING JAYA (July 27): Despite office rents generally remaining stable, the resizing measures taken by some companies due to Covid-19 pandemic are likely to result in downward pressure on rentals and occupancy rates in the short-term, said Nawawi Tie Leung Property Consultants.

This article first appeared in edgeprop.my. View source here.

In its 2Q2020 market report entitled “Investors remain vigilant in the midst of Economic Recovery Plan”, the consultancy firm expected the Business Continuity Plan measures such as remote working arrangement, split teams and de-densification requirements, to be the new norms in the workplace.

“A shift in the workspace strategy could lead to redesigning of office layout as well as space planning in future. While office space is still necessary for most organisations, the resizing measures taken by some companies and reduction in office demand are likely to result in downward pressure on rentals and occupancy rates in the short-term,” Nawawi Tie Leung reckoned.

Although the government has relaxed the containment measures since May, 2020, by allowing most non-essential sectors to operate. Majority of the businesses remained cautious in resuming operations at full capacity, given the strict standard operating procedures.

However, the movement has yet to be seen now as most of the tenancy agreements have been committed before the Movement Control Order (MCO), which was implemented on March 18, 2020.

According to the report, office occupancy in the second quarter remained stable in Golden Triangle and KL Sentral with minimal tenant movement. The average office occupancy rate in Kuala Lumpur remained at 78.1%, with unchanged capital values and yields in the second quarter.

The monthly office rent in Golden Triangle also maintained at RM7.05 psf per month. However, KL Sentral office rents have dropped slightly from RM7.12 psf per month to RM7.2 psf per month.

“Given the current market conditions, companies’ wait-and-see attitude and desire to avoid capital expenditure, will be challenging for office landlords to fill up vacancies,” the consultant firm noted.

Meanwhile, the MCO also caused hiccups in the construction sector resulting in delayed shopping malls completion.

“TRX’s The Exchange mall has announced delayed opening to 2022 as opposed to late 2021 planned earlier. Datum Jelatek and Setia City Mall (expansion), scheduled to complete in 2020, are still under construction,” the report showed.

In the first half of 2020, Nawawi Tie Leung said only two new malls were added to the Klang Valley retail market. These include Malakat Mall in Cyberjaya and Tropicana Gardens Mall in the suburb of Kota Damansara, with an aggregate net lettable area of 1.35 million sq ft.

The consultancy firm also observed that retail malls also not spared from the Covid-19 pandemic due to stagnant consumers’ sentiment as majority of the salary earners worried about their job security.

The unemployment rate spiked to 5% in April. The same month saw 168,300 more people unemployed compared to 610,500 recorded in March.

“Retail sales will likely record a consecutive contraction in Q2 2020 as shoppers’ traffic remains passive. However, the retail industry is only expected to recover in the third quarter with forecasted marginal growth of 2.%. Retail Group Malaysia forecasted a negative growth of 5.5% for the entirety of 2020,” Nawawi Tie Leung concluded.

Jul 27

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More homes are expected to be offloaded post moratorium period

By koizumi Media Room

PETALING JAYA (July 27): Despite government incentives in economic packages and economic recovery plans, Nawawi Tie Leung Property Consultants anticipated that more residential properties are expected to be offloaded in the market as loan moratorium period ceases in end-September.

This article first appeared in edgeprop.my. View source here.

In its 2Q2020 market report entitled “Investors remain vigilant in the midst of Economic Recovery Plan”, the consultancy firm reckoned that there will be heightened risk of loan defaults as unemployment is on the rise and without significant economic improvement.

“In the coming months, with the expectation of no extension on the moratorium or extension given only to selected recipients, more properties are expected to be offloaded in the market. There might be downside pressure on prices, which provides opportunities for prospective buyers to purchase properties at a bargain,” the report said.

Nevertheless, Nawawi Tie Leung believed that the potential homebuyers are likely to adopt a wait-and-see approach before they proceed with their purchase to secure the best deals, coupled with concern on the economic and political uncertainties.

Reviewing the residential market in the second quarter, the report showed that there was no completion or new launch recorded in the city centre since the first quarter of the year due to Movement Control Order (MCO) which was implemented since March 18, 2020, to curb the spread of Covid-19.

However, about 1,919 units are slated for completion in the second half 2020. These projects are 8 Conlay Tower A (564 units), Eaton Residences (632 units) and The Colony by Infinitum (723 units).

According to the report, transaction prices and rents for high-end condominiums dipped marginally by -0.6% and -0.7% q-o-q, respectively at RM1,015 psf and RM3.72 psf per month in the second quarter.

The government has unveiled property incentives under the Economic Recovery Plan in order to stimulate the stagnant property market and buyers’ sentiment. Among the key incentives are the reintroduction of Home Ownership Campaign (HOC), which offering exemption of stamp duty for properties priced between RM300,000 and RM2.5 million, lifting of the 70% loan-to-value for the third property valued at RM600,000 and above, and exemption of Real Property Gains Tax (RPGT) for Malaysians upon disposal of up to three residential properties per individual.

“Though the incentives are aimed at helping prospective buyers, some investors are still in the doldrums. Property investors with short-term rental properties targeting tourists are under pressure, and investors for long-term rental properties are worrying about the sustainability of tenants and finding new tenants.

“Nevertheless, during this uncertain period, demand for rental units is expected to remain steady, as some people might opt to rent than buy houses, leveraging on the potential downward rental adjustments and their financial instability,” Nawawi Tie Leung shared.

Jul 22

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Cover Story: The appeal of community living

By koizumi Media Room

As the cost of housing continues to rise in all major cities around the world, millennials are finding it increasingly challenging to buy and even rent. According to a JLL report titled “Co-living in Costly Cities — Asia Pacific”, published in 2019, with more people delaying marriage and starting a family, the housing needs of those in the mid-20s to early 30s age bracket have shifted.

“This is reducing the requirement for traditional residential space and increasing the demand for flexible lifestyle-based housing. This trend is supporting the development of co-living in all markets, even those like India where people marry young (relative to other markets),” says JLL.

Nawawi Tie Leung managing director Eddy Wong defines co-living as a concept in which people, mostly young professionals, live in rental accommodation with communal areas and a strong community living spirit.

This article first appeared in edgeprop.my. View source here.

A cheaper alternative and changing lifestyle

Khong believes co-living is gaining traction as it is a cheaper alternative to renting an entire apartment or house, which requires hefty deposits.

“Renting an entire apartment will cost at least 2+1 months of cash deposit payable upfront compared with renting a co-living space, where no large upfront deposit is required,” he says.

Eddy concurs, noting that the lack of housing affordability will also drive demand for co-living.

JLL compared the cost of renting a co-living room in Singapore with renting a room in the same apartment under a traditional one- to two-year lease. At first glance, the headline rent for the co-living room was 27% more than under the traditional rent model.

“However, after accounting for all expenses incurred by a tenant throughout a lease and considering things like the amortised lost value of furniture, exit cleaning costs and general maintenance, the real cost premium of living in a co-living (like-for-like) unit is around 5% in this scenario,” says JLL.

Without lease break costs or applicable agent fees, as well as the time saved on going through a traditional rental process, co-living can be cheaper than a traditional landlord-tenant model, notes JLL.

“Managing the process of moving in, moving out and the ongoing logistics of living under a tenant-landlord model that is intermediated by a property manager and an agent is highly inefficient and often frustrating. Dealing with a single company on all related issues, as well as peace of mind regarding relocation or moving out, creates huge upside for the tenant base,” says JLL.

According to Eddy, Cove co-living in Singapore advertises that its accommodation cost is lower than renting a studio apartment, owing to not having to furnish the unit or pay for utilities, housekeeping and WiFi, which are typically included in a co-living package.

“It is the housing version of a ‘plug-and-play’ concept, where you only need to move into the premises with your suitcase and everything else is already included in the package. There is also flexibility in terms of tenure as shorter tenancy periods are available for co-living. This would suit those who like to keep their options open while they contemplate and experience different lifestyle and living choices,” says Eddy.

Co-living also provides a community platform for more social interaction and convenience for the tenants.

“These collaborative spaces tend to promote better utilisation of personal assets while reducing inefficiencies wherever applicable. It may look to be more expensive than traditional leasing options but with co-living offering fitted and furnished options, it reduces additional costs and time spent in getting the space ready for use,” says Khong.

Eddy says while co-living started off as an affordable housing option, it has evolved into a lifestyle choice for those who enjoy being part of a larger community.

JLL notes that another factor is the changing lifestyle of the young, with millennials valuing experiences over ownership of things, and that service-based living is on the rise, from student housing to family rentals.

“Hotel operators and developers are picking up on this trend, and focusing more on ‘branded living’, as demand for the service-based aspect of residential takes priority. Even senior care homes are becoming more about the extras and lifestyle, contributing to an evolving set of living categories across the life spectrum,” says JLL.

Co-living in Malaysia

Co-living is still in its infancy in Malaysia but Eddy believes the concept will gain traction in tandem with the growing appeal of the sharing economy.

There are already a few co-living businesses in the local market. An early entrant was The Hatchery Place in USJ, Subang Jaya, founded by Elaine Wong and Kevin Yeoh in 2016 after the couple quit their corporate jobs the year before.

Finding working at home too distracting and not wanting to travel out of Subang Jaya, Elaine and Yeoh set up what they called a “creative house”, located just 15 minutes from their own home. Elaine took a room to use as her art studio, and Yeoh took another for his craft room, while the space downstairs was used for co-working.

“We converted the remaining two rooms into co-living rooms so we could have like-minded creative peers to not only work together but also share living spaces with us, as part of our intention to redesign our social circles,” says Elaine.

She believes that being intimately integrated in the community they have created makes The Hatchery Place different from the other operators in the market. The couple create activities for guests based on their own interests, including art and craft events, food and drink tasting, poetry nights, drum circles, and painting and woodworking workshops.

“Those who have stayed with us have become our lifelong friends, and the locals who co-worked with us have grown to become important allies in our creative endeavours. Many travellers return for month-long stays to focus on their projects,” says Elaine.

The Hatchery Place has housed more foreigners than locals, mainly digital nomads aged 23 to 45. The minimum stay is one week and rates start from RM385 a week.

“The average stay is three to four weeks. We have also had a number of 90-day stays and beyond,” says Elaine.

Operating on a larger scale is JL Coliving (JLCL), which was founded by Jessica Lee in 2018 and has two co-living premises in USJ 21 and The Mines in Seri Kembangan.

Lee came up with the idea for JLCL to address the issues of a lack of communication between housemates, safety and increasing isolation in modern society.

JLCL has 50 rooms in total with rates starting from RM650 a month. It offers a laundry room, meeting room, reading area, hot desks and a space for movies.

“The response has been good. We get a lot of positive feedback on our location and cleanliness. We have also received constructive feedback from our tenants such as having a kitchen. We currently provide only coffee, tea and snacks. Some of our tenants have also requested specific hotel essentials such as disposable dental care pack and shower cap, which we are looking to provide in the near future,” says Lee.

JLCL’s tenants are mostly between the ages of 17 and 30, and comprise mainly students and working adults.

“Sometimes we get digital nomads from other countries such as the UK, Russia, China and overseas tenants. Most are individual tenants as opposed to corporate tenants,” says Lee.

Property developers have also got in on the act. Tan & Tan Developments Bhd opened Co-Living @ Damai Residence in Ampang in January 2019 and UOA Group started Komune Living in Bangsar South in October 2019.

Damai Residence was initially designed as apartments to be sold but once the idea for co-living was conceived, the developer stopped selling the units. The fitting out of the interiors cost about RM4 million.

There are 174 private fully furnished rooms with single or double occupancy, and a choice of en-suite or shared bathrooms. Rent starts from RM1,000 a month, which includes all utilities, community events and use of all facilities.

Among the facilities are a shared kitchen and dining area, an entertainment zone, a gym and a communal lounge, while the co-working section offers a meeting room, a discussion area, an open office space and a printing and photocopy room.

According to Tan & Tan Developments CEO Tan Yee Seng, the concept has been very well accepted by both locals and foreigners.

Photo by Tan & Tan Developments

“We have received a lot of positive feedback from our tenants. They especially emphasise that this healthy community formed within the building is just like their family. The advantage of staying in Co-Living @ Damai Residence is that we have an on-site community team to provide assistance to the tenants. The team will also organise events and activities such as movie nights, cultural food gatherings and outdoor activities,” says Tan.

The average tenancy period is six months and the tenants are mainly between the ages of 24 and 35.

“We have tenants as young as 18 all the way to 63 years old. They are mostly professionals, interns and work-from-home (WFH) individuals. Currently, locals make up 30% of the tenants and foreigners, 70%. Since the inception of our co-living project, we have received tenants from 34 nations,” says Tan.

Komune Living, which opened its doors late last year, is managed by UOA Hospitality, UOA Group’s hospitality arm. It has 648 units of private studios and apartment-style rooms, with rates starting from RM1,900 a month.

Komune Living general manager Mark Chen says it has an average occupancy rate of over 70%.

“Guests appreciate the all-in, hassle-free living solution that we offer. Our price is inclusive of utilities, WiFi, daily breakfast and housekeeping twice a week. Our tenancy contract is more flexible compared with others that require a minimum stay of six to 12 months. The short duration commitment greatly influences guests’ decision to stay with us.

“Our communal facilities, such as the community lounge and kitchen and the 24/7 game base, provide our guests with a space to hang out instead of staying in their rooms. This makes Komune Living feel more like home. The familiarity and interaction are pull factors for them,” says Chen.

The average length of short stay was 2.5 to three nights during the promotional period of October to December 2019, while the average length of long stay is three months to a year.

“Our current guests’ demographics range from 25 to 45 years old and comprise corporate clients, online business owners, postgraduates and undergraduates, freelancers and working IT professionals.

“Our business is 60% short term and 40% extended stay. From October to December 2019, locals comprised 80% of our guests and foreigners, 20%. Foreigners, mainly from the Philippines, Indonesia, South Korea and Japan, outnumber locals in terms of long-stay guests,” says Chen.

He adds that the co-living concept attracts more individual guests (about a quarter are corporate guests) and most learnt about Komune Living via its online brand awareness campaign.

Photo by The Hatchery Place

What the future holds

The Hatchery Place’s Elaine believes the trend of co-living is catching on in Malaysia, which is a good thing.

“The Hatchery Place reflects us, so it has our personal touch. The more others start to create their own version of co-living, the more choices would be available to tailor to each person’s lifestyle needs. Co-living has become a movement to tackle the global issue of a growing sense of isolation and loneliness in our digitally connected world,” says Elaine.

JLCL’s Lee encountered scepticism from friends and others when explaining the concept of co-living.

“However, I certainly foresee more co-living spaces opening. There is a market for co-living; you just need to define your target market. That said, the cost of opening a co-living space will always be a factor. Expansion is the biggest challenge for me. This business needs a big investment to start. Nonetheless, I’m very positive and passionate about co-living,” she says.

Tan & Tan Developments’ Tan notes that flexibility, convenience and affordability are very important to people these days and there is opportunity for more co-living spaces as the trend of renting catches on.

Komune Living’s Chen says, “It’s a new way of living with a better quality of life, where the cost is reduced, allowing you a sense of ease.

“With the increasingly solitary lifestyle today, co-living’s appeal and acceptance will continue to grow and create new demand. This will lead to more co-living spaces opening in the future.”

Meanwhile, Nawawi Tie Leung’s Eddy feels that co-living can be a solution to the number of unsold properties in Malaysia as they can be repurposed into co-living spaces.

Savills Malaysia’s Khong says housing in Malaysia has yet to reach the extreme situation in major cities such as Hong Kong and Shanghai.

“Malaysia is still slightly behind in terms of actual co-living as it is still affordable to rent an apartment. Co-living spaces will flourish when living costs are high in KL and people find it hard to afford a sizeable place.

“However, there is still a niche demand for co-living. It attracts a certain category of people who are looking for a slightly luxurious fitted-out space to stay. It offers pure convenience, hassle-free, low-cost entry in terms of deposit and also a taste of communal living.”

Photo by JL Coliving

Co-living in the Covid-19 era

The Covid-19 pandemic has impacted economies worldwide and the co-living market segment has not been spared.

“The co-living sector operates in the hospitality space. The pandemic has meant upgraded levels of hygiene across the board — which is a good thing. Operators will therefore have to focus on cleanliness and hygiene in shared spaces and common areas,” says Khong.

Tan says Co-Living @ Damai Residence’s occupancy rate has dropped since the implementation of the Movement Control Order (MCO), mainly because some of its foreign tenants were recalled to their home countries.

“We started to gear up our marketing activities when the Conditional MCO was implemented. Currently, we are focusing mainly on digital marketing. Other marketing plans in the pipeline include event collaboration with different partners once the situation improves and holding events is permitted,” says Tan.

As for The Hatchery Place, Elaine says it has stopped taking bookings as it is now focused on serving the remaining co-living residents, who are staying put in the country because of closed borders.

She believes people need connection and interaction and it is possible that the restriction in movement may result in a desire to connect even more after the crisis.

“We are taking the current downtime to look into how to be more innovative, sustainable and responsible and create more opportunities when this ends. We are constantly reaching out to other co-living operators around the world to stay up to date with current trends, challenges and solutions,” says Elaine.

Nawawi Tie Leung’s Eddy believes the pandemic has not changed the factors that drive co-living demand such as shared accommodation and cost, community-centric living and lease flexibility.

“People still need a place to stay and we are basically social creatures, so the desire to be part of a community remains intact, albeit the interactions may change with perhaps some social distancing and health safety protocols in place. In fact, the lease flexibility part will be a big plus in this uncertain economic climate.

“Having experienced the WFH option, people are likely to want to spend more time working from their co-living home if they have good and reliable internet connection. In this regard, the co-living model will likely shift to incorporate workspaces in the common areas of the development or work desks within the units to cater for residents who desire to WFH, which will ultimately add to the appeal of co-living spaces,” he says.

He suggests that operators of co-living space offer greater flexibility in the contract to make it more accessible and affordable to those who may be impacted by the pandemic and economic downturn.

JLCL’s Lee says business has not been greatly affected by the pandemic. “In fact, our occupancy is much higher now than before the MCO. We will make sure that our tenants are tested and cleared before they move in. We put a lot of emphasis on [observing] the standard operating procedures [in using] the common facilities.”

Apr 09

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Will the housing market crash?

By koizumi Media Room

Kuala Lumpur (April 10): The Malaysian Housing Price Index (HPI) fell by 9.4% and 2.3% respectively, in 1998 and 1999 due to the Asian Financial Crisis, before returning to growth in 2000.

This article first appeared in edgeprop.my. View source here.

The Malaysian GDP sank 7.4% in 1998, but was trending up from 1999. The property market was swift to follow the recovery due to strong demand and rapid economic growth.

During the global financial crisis in 2008, house prices in Malaysia continued to steadily rise despite negative GDP growth.

This time around, Bank Negara Malaysia (BNM) expects GDP growth in 2020 to be between -2% and 0.5% while the World Bank had recently revised Malaysia’s GDP growth from 4.5% to -0.1%.

Getting out of the downturn this time around could be more difficult as it involves a major public health issue that is the Covid-19 pandemic, which has, together with other economic issues, impacted the economy not just in the country but globally.

Estimations on economic recovery range from months to years, and similarly, the property market would possibly enter into a down cycle before recovering.

How bad would the housing market be impacted? A pessimistic Nawawi Tie Leung Property Consultants director and regional head of research and consulting Saleha Yusoff estimates that the drop in house prices this time will be worse than that in 1998 at between -10% to -15%, with housing transaction volume declining at a similar rate to 1998’s downturn (at -30%).

“Buyers are not buying and developers are holding back new launches. Instead of slashing new launch prices and compressing their profit margin, developers might focus on clearing existing stock and delay new launches,” Saleha tells EdgeProp.my.

“For developers, striving to break even may be more realistic than trying to make profit by launching new projects,” she adds.

However, property consulting firm Firdaus and Associates Property Professionals Sdn Bhd founder and managing director Firdaus Musa does not foresee a meltdown in the property market similar to the one seen during the Asian Financial Crisis, which was caused by the collapse of the financial system.

This time, he feels that the drop in property transactions will come at a more gradual pace, depending, of course, on the overall economic situation.

Recovery might take some time

One thing’s for sure, don’t expect a recovery anytime soon. The Covid-19 outbreak has triggered the Movement Control Order (MCO) which has partially locked down the nation since March 18 as Malaysians are forced to stay at home, putting the brakes on property transactions.

However, Firdaus believes that once the MCO is lifted, there is potential for activities to restart but it will take a longer time for the market to be fully “reactivated”.

“It will only bounce back once the economy is back on track,” he says.

To strengthen household incomes and bolster cash flow of businesses amidst the virus outbreak, the government had announced the first stimulus package worth RM20 billion on Feb 27 and the second worth RM230 billion on March 27 with an additional RM10 billion announced on April 6.

The country’s economic situation post-MCO will depend somewhat on the effectiveness of the economic stimulus packages over the next few months. BNM had also announced a six-month moratorium on all bank loans except for credit cards from April 1 for small and medium enterprises (SMEs) and individuals.

Real Estate and Housing Developers’ Association (Rehda) president Datuk Soam Heng Choon says a recovery will depend on how fast the nation can get over the pandemic, as well as how fast the world economy could get back to normal.

“We need all major economies such as the US, the UK and China to be back up before the local economy could really recover,” he tells EdgeProp.my.

The current economic downturn will pose a serious challenge to Malaysia’s financial resilience and there will be those who would not be able to weather the storm.

“Before the property market can recover, we have to focus on restoring businesses, employment, increase purchasing power as well as discovering new economic opportunities,” he adds.

Good time for homebuyers

According to Firdaus, after the six-month loan moratorium provided by banks from April 1, there could probably be a surge in non-performing loans leading to panic sales that will see properties selling below market value.

As real estate is not listed as an essential service for the MCO period, sale galleries have been closed and no site visits and property viewings are allowed. Hence property sales have come to almost a standstill.

“Efforts to sell properties will resume aggressively after the MCO ends as the developers and real estate agents are hungry,” Firdaus notes.

This means that there could be bargain buying opportunities, especially from property owners and developers who have been greatly affected by the MCO period.

However, he warns that to gain returns on investment may take a long time, hence those who are looking to buy will need to have strong holding power.

“With better chances to bargain, I would say this is a good time to search for good homes for own-stay. For investors who can stand to wait for longer-than-normal capital appreciation and are able to accept slower rental growth, this would be a good time to increase their property portfolio,” he notes, adding that the current situation is also a chance for investors to review their goals and strategies.

Saleha concurs that this is a good time for people to buy for their own stay, but she also warns that it may be harder now to get loans from banks as financial institutions may not be very excited about giving out loans during the current low-interest rate environment. BNM had reduced the overnight policy rate by 25 basis points to 2.5% on March 3 for the first time in 10 years.

Property investors, on the other hand, may want to think twice before buying, considering the sluggish rental market and the economic uncertainties, she adds.

Nevertheless, Rehda’s Soam opines that property is still a relatively good asset to invest in, in view of the volatile stock market, low bond yields and low fixed deposit rates.

“Every kind of investment has been beaten down (in the current crisis). If you put money in the bank, you will be poorer in, let’s say, five years because of inflation. Hence, at this moment, one can choose to hedge his or her money with property.

“Besides, Malaysia is still a safe place to stay, and the weak ringgit makes our property attractive to foreign buyers,” he adds.

Five challenges faced by the property market in 2020

Uncertainty of virus containment

Containing the spread of the new highly contagious Covid-19 virus remains a huge challenge. While the government and the people are doing their parts to help curb the spread, there will be no light at the end of the tunnel until effective vaccines are created.

Gloomy economic outlook

While controlling the virus is now top of the agenda, there are still many risk factors clouding the scene, such as depressed oil prices, ongoing tensions between the US and China and domestic political turbulence, just to name a few.

Cautious spending

People tend to hold back on large ticket purchases amid worries of losing jobs and income. The cautious attitude will only be lifted after more clear signals on market recovery appear.

Existing overhang unsolved

Even before Covid-19 reared its head, the Malaysian property market was already in a prolonged slowdown. Property transaction volume and value declined over 2015 to 2017, before a marginal increase in 2018.

Adding to the slowdown is the issue of property overhang. According to data from the National Property Information Centre, there were 31,092 overhang residential units worth RM18.77 billion as at 3Q2019 compared with 10,897 units worth RM4.92 billion in 2015.

Strict lending policy

Bank Negara has cut overnight policy rate to 2.5% early March 2020, the lowest since May 2010, which will likely affect banks’ net interest margin. Furthermore, non-performing loans are expected even with the central bank’s six-month moratorium on loans. Hence banks may become even more selective with lending.

Feb 13

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2019’s most popular areas for homeseekers

By koizumi Media Room

Kuala Lumpur (February 14): 2019 was a busy year for the property market that began with the launch of the Home Ownership Campaign (HOC) to give the soft market a little push. Data also showed that property transactions increased in 1H2019 for the first time since 1H2015.

This article first appeared in edgeprop.my. View source here.

But where did potential homebuyers look at? EdgeProp.my has compiled a top-five list of the most searched areas in the Klang Valley for 2019 (from January to mid-December 2019) based on user search patterns on EdgeProp.my property portal.

Each area has its own merits but most of them are long established and matured neighbourhoods with mainly landed homes.

Homes in the Klang Valley (Kuala Lumpur and Selangor) comprised some 80% of the total searches recorded throughout the year. Let’s count down to the top spot!

5 Klang

In fifth place is one of the oldest towns in the country. The former state capital of Selangor is one of the leading searches on EdgeProp.my for potential homebuyers. This royal town is well-known for its shipping port, Port Klang, one of the busiest container ports in the world, as well as a haven of numerous multicultural food offerings.

There is no shortage of amenities here with both traditional shops and shopping centres such as GM Klang, AEON Bukit Tinggi and Klang Parade.

Connectivity-wise, Klang is served by major highways including the Shah Alam Expressway (KESAS), Federal Highway and the New Klang Valley Expressway (NKVE). Several KTM Komuter stations are located within Klang as well.

Most-searched locations in Klang

Taman Sentosa — Located close to the bustling Bandar Bukit Tinggi, it comes with plenty of amenities, from banks to fast food restaurants.
Bandar Puteri Klang — Located south of Taman Sentosa and close to Bandar Bukit Tinggi, it offers ample amenities including a nine-acre lake garden, schools and shops. It has a quick access route to KESAS.
Bandar Parklands — A green township development with a large park and 10 other smaller parks, it is easily accessible via KESAS, and is only a 10-minute drive to Bandar Bukit Tinggi.

4 Puchong

At number four is a place carved out of former tin-mining and rubber plantations. Puchong began to see rapid development during the 1980s and is now a busy and thriving area. It is a popular choice for homebuyers and investors owing to its strategic location between Kuala Lumpur and Putrajaya, and its close proximity to Petaling Jaya and Subang Jaya.

The area is also connected via several highways such as the Lebuhraya Damansara-Puchong (LDP), New Pantai Expressway (NPE), Maju Expressway, South Klang Valley Expressway (SKVE) and more. The Ampang–Sri Petaling light rail transit (LRT) line has several stations in the area as well.

Nawawi Tie Leung managing director Eddy Wong tells EdgeProp.my that Puchong has developed rapidly over the years and is now well-served with numerous amenities, shops and eateries, shopping malls and commercial centres.

Most-searched locations in Puchong

Bandar Puchong Jaya — Located right after the Sunway LDP toll, it has plenty of commercial offerings, with IOI Boulevard and IOI Mall Puchong among them.
Bandar Nusaputra — It has quick access to Cyberjaya and Putrajaya via Putrajaya Ring Road highway; and also to the North-South Expressway Central Link (ELITE), Maju Expressway and SKVE.
Taman Putra Prima — It is a well-planned township featuring a seven-acre community park and other green spaces; with easy access to ELITE, SKVE and LDP.

3 Petaling Jaya

Taking third spot is Petaling Jaya especially its older parts. Founded in 1952, it was Malaysia’s first planned city, developed as a satellite city to KL. It achieved city status in 2006, and being near to the capital city means PJ has an abundance of amenities and facilities, making it an ideal choice for homeowners.

There is no shortage of shopping malls here, from neighbourhood malls like Atria Shopping Gallery and Starling Mall to regional mall 1 Utama Shopping Centre.

PJ can be accessed via the LDP, Federal Highway, SPRINT Expressway, NPE and North-South Expressway (NSE). In terms of public transportation, it is serviced by several LRT stations along the Kelana Jaya line, KTM Komuter stations and mass rapid transit (MRT) Sungai Buloh–Kajang line.

Most-searched locations in Petaling Jaya

Seksyen 17 — Centrally located next to SPRINT Expressway and the LDP, it is one of the oldest housing estates in PJ and home to a host of eateries and surrounded by amenities like hospitals and malls.
Damansara Uptown — Located in Damansara Utama, the popular commercial hub with shopoffices, a mall and high-end serviced apartments is directly connected to the LDP, SPRINT Expressway and NKVE. Adjacent to the commercial centre are double–storey terraced homes.
Taman Megah — Located right next to the LDP, the residential neighbourhood has a small but bustling commercial area and a night market every Sunday.

2 Cheras

Just ahead of PJ into second place is Cheras. This suburb in KL is massive as it extends into Selangor. Located just 10 minutes away from the city centre makes it one of the most popular choices for homebuyers. Cheras is home to a significant number of housing estates and is well-linked by a few expressways such as the Middle Ring Road 2 (MRR2), Cheras-Kajang Expressway (Grand Saga Expressway) and more.

Furthermore, its massive size means several LRT (Ampang-Sri Petaling line) and MRT (Sungai Buloh-Kajang line) stations serve the area, making commuting convenient. New shopping malls such as MyTOWN Shopping Centre, IKEA Cheras and Sunway Velocity have given the Cheras area new vitality.

Most-searched locations in Cheras

Bandar Mahkota Cheras — It is a large, mature township with ample amenities; accessible via Cheras-Kajang Expressway and Kajang Dispersal Link Expressway (SILK).
Bandar Tun Hussein Onn — It is the largest freehold housing development in Cheras Selatan with an MRT station.
Taman Midah — The old housing estate along the MRR2 is close to Permaisuri Lake Park and is also served by an MRT station.

1 Shah Alam

The state capital of Selangor, Shah Alam, tops EdgeProp.my’s list of the most-searched locations in the Klang Valley in 2019. According to Nawawi Tie Leung’s Wong, Shah Alam’s properties are still relatively affordable.

Shah Alam’s connectivity will be enhanced via the upcoming LRT3 line from Bandar Utama to Johan Setia in Klang, as several stations have been proposed for Shah Alam.

“The market views it as an extension of Subang Jaya. Shah Alam is conveniently served by several highways — the Federal Highway, KESAS, NKVE, Guthrie Corridor Expressway and Kemuning-Shah Alam Highway (LKSA).

“The opening of Setia City Mall and Central i-City in Shah Alam in recent years have added to the convenience and appeal of living in Shah Alam,” says Wong.

Reapfield Properties (KL) Sdn Bhd real estate negotiator Hayati Husin concurs. “Many malls such as Setia City Mall, Central i-City, Space U8 Mall and the upcoming Sunsuria Forum @ 7th Avenue offer plenty of entertainment, F&B and retail choices. They have become the go-to places for residents in Shah Alam, especially during the weekends. The malls even attract people from Klang and Subang Jaya.”

Most-searched locations in Shah Alam

Seksyen 7 — Located beside I-City and Universiti Teknologi Mara, (UiTM), it has easy access via Federal Highway and NKVE, besides plenty of amenities around the commercial area surrounding Shah Alam Hospital.
Taman Sri Muda — The township is known for its Industrial zone; accessible via KESAS and LKSA.
Alam Impian — An ongoing township development (60% built as of September 2019), it has a wide range of facilities and amenities, from parks, retail stores and community police station. It is easily accessible via the LKSA, KESAS, Federal Highway and ELITE while the upcoming West Coast Expressway (WCE) will enhance connectivity.

All about convenience

The fact that a neighbourhood is matured means the amenities are well established and almost everything is well provided for, from shopping to eateries to schools, explains Wong.

Wong has also observed that property purchasers tend to prefer locations they are familiar with; or are close to their parents’ home and increasingly, many are now seeking a balanced lifestyle. Hence, places with parks or open spaces would have an advantage.

Meanwhile, Reapfield’s Hayati states that areas on the list are desirable due to the abundance of amenities and conveniences. “For example, there are many educational institutions and hospitals in Shah Alam and PJ. Certain areas in Klang and Puchong have affordably-priced properties as well,” she adds.

High-rise edges out landed

Meanwhile, a further breakdown showed that a slight majority (51%) of the searches were for high-rise residential properties. This was no surprise, considering the fact that when it came to price range, most homeseekers had narrowed their searches to homes within the range of RM200,000 to RM500,000.

Wong opines that while the general market may prefer landed homes, high-rise ones are more affordable.

“Another way of looking at it is that for the same price point, the high-rise property will probably be situated in a better or more convenient location,” he adds.

“With rising acceptance among the young, high-rise living now represents an attractive alternative to landed housing especially in the higher-end neighbourhoods like PJ or Cheras where landed home prices are probably too prohibitive for first-time homebuyers.

“High-rise living is something that aligns with millennial home buyers’ aspirational lifestyle, especially with more projects offering a host of communal and recreational facilities as well as 24-hour security,” he says. Besides that, high-rise properties are also easier to rent out.

Nov 01

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Shah Alam has more to offer

By koizumi Media Room

PETALING JAYA (November 2): From oil palm and rubber plantations into a modern industrial city, Shah Alam today is also a top choice for young families and professionals to live especially those who work in the Western corridors of the Klang Valley.

This article first appeared in edgeprop.my. View source here.

Since it became the capital city of the state of Selangor in 1963, its boundaries have expanded from 41.69 sq km to 290.3 sq km consisting of 56 Sections. Situated between Petaling Jaya and Klang, the city recorded 3,963 property transactions in 2018, more than its neighbours — Puchong (2,576), Klang (3,381) and Subang/USJ (1,467).

Its growing population has fuelled housing demand and the city which celebrated its 19th year as a city on Oct 10 this year is now home to over 650,000 people. According to Shah Alam City Council, Shah Alam’s population has grown by 38.5% after it gained city status in 2000.

Unlike Kuala Lumpur and Petaling Jaya cities which have grown organically, Shah Alam is a structured master-planned city. Different Sections have been developed thematically such as sports, education, government administration centre and industrial developments, says Nawawi Tie Leung managing director Eddy Wong.

“Housing developments are generally low density in a pleasant green environment with recreational parks like the Shah Alam National Botanical Gardens, the Setia Alam Central Park and several golf courses. It offers an environment that promotes work-life balance,” Wong tells EdgeProp.my.

Hence, he notes that healthy living has become a catchphrase commonly used by property developers when positioning their developments in Shah Alam.

PA International head of research and project marketing consultant Evelyn Khoo finds that the city has evolved in recent years in line with rising demand from its citizens especially for retail and leisure.

“Shah Alam was once perceived as a Malay area due to large tracts of Malay reserve land here but it has become more multi-racial over the years. Coupled with new housing projects that target young homebuyers, commercial activities have grown and Shah Alam is becoming more vibrant and diverse,” she says.

Setia City Mall, Central i-City shopping mall, Space U8 Mall and the upcoming Sunsuria Forum@7th Avenue offer plenty of entertainment, F&B and retail offerings.

They have become the go-to places for residents in Shah Alam especially during the weekends. The malls even attract people from Klang and Subang Jaya, adds Khoo.

Families with children will also appreciate the many schools and educational institutions located in Shah Alam including the Tenby International School in Setia Alam, the Chinese Taipei School Kuala Lumpur in Bukit Rimau, Maz International School in Seksyen 7, R.E.A.L International School, Sekolah Seri Cahaya in Seksyen U9, Management & Science University in Seksyen 13 and KDU University College in Utropolis Glenmarie.

“Young families or wage earners who choose to live here are no longer eyeing affordable or cheaper alternatives. More and more homebuyers are searching for premium residential properties with lifestyle offerings in Shah Alam,” says Reapfield Properties (KL) Sdn Bhd real estate negotiator Hayati Husin.

Besides, she adds, there has been more enquiries for en-bloc purchase of office buildings for own-use or investment reflecting Shah Alam’s attractiveness to investors.

Prices continue to climb

The average transaction prices of residential properties in Shah Alam seem to have peaked over the years 2015/16. Nevertheless, property prices here have significantly increased from 2012 prices.

EdgeProp.my data shows that the average transaction price of a terraced house in Shah Alam was at RM329 psf in 2012 (by land area size), peaking at RM418 psf in 2016 before declining to RM389 psf in 1H2019. Despite the recent price dip, the current value of terraced houses has risen 18% overall compared with 2012.

Meanwhile, the average transacted prices of semidees and bungalows were at RM403 psf and RM361 psf respectively in 1H2019, an increase of 8% and 7%, from RM373 psf and RM337 psf in 2012.

As for high-rise residences, the average transaction price has jumped 75.5% to RM441.50 psf in 1H2019 from RM251.50 psf in 2012.

In terms of sales volume, terraced houses and high-rise residences were the most transacted properties, followed by semidees and bungalows.

Of the 3,963 transactions recorded in 2018, close to 45% or 1,769 cases were terraced houses, 215 were semidees and 145 were bungalows while over 18% or 726 transactions were high-rise homes.

Khoo from PA International points out that Shah Alam has more affordable properties compared with mature residential areas like Subang Jaya and Petaling Jaya.

Citing transactions made in 1H2019, Khoo reveals that one 2-storey terraced house with a land area of 1,647 sq ft in Ara Damansara was sold for RM1.3 million (or RM789 psf), while a 2-storey terraced house in Bukit Jelutong (land area of 1,916 sq ft) changed hands for RM890,000 or RM465 psf.

Highest transacted price in 1H2019

i-Residence in i-City, Suria Jelutong in Bukit Jelutong and the Vista Alam serviced apartment in Seksyen 14, Shah Alam, were the top three high-rise residential property transactions in 1H2019.

According to EdgeProp.my data, among the 28 concluded residential deals recorded in 1H2019, i-Residence saw two units sold at an average price of RM592 psf (unit price RM274,000); while Suria Jelutong and Vista Alam had one transaction each, priced at RM531 psf (unit price of RM480,000) and RM516 psf (unit price of RM400,000) respectively.

Meanwhile, terraced houses in TemasyaGlenmarie saw two units sold at an average price of RM691 psf based on land area size or RM1.7 million in 1H2019, the highest price recorded for terraced houses in Shah Alam in 1H2019.

A terraced house in Subang 2, Seksyen U5 came in second, changing hands at RM561 psf or RM670,000; while Cahaya Alam in Seksyen U12 was next with two terraced houses transacted at an average RM512 psf or RM843,000.

The most expensive semidee which was sold in 1H2019 was in Alam Impian, with three semidees sold at an average RM481 psf or RM1.53 million.

Kemuning Greenhills had two concluded deals with an average price of RM469 psf (or RM1.05 million), while Setia Alam had three semidees sold at an average of RM464 psf (or RM1.66 million).

As for bungalows, the highest transacted average psf selling price in 1H2019 was a bungalow with a land area of 1,798 sq ft and built-up of 2,228 sq ft in Setia Alam sold for RM522 psf or RM938,000. The next highest average transacted price for bungalows was recorded over in Kota Kemuning where two bungalows were sold at an average price of RM465 psf or RM2.1 million.

In terms of preferred locations or projects, the 2018 transaction data showed that

Setia Alam topped the list, recording the most transactions in 2018.

Other popular areas include Seksyen 13, Seksyen U1, Elmina West at Denai Alam, Taman Sri Muda and Kota Kemuning.

Outlook

Located about 30km away from Kuala Lumpur city centre and about 20km from Port Klang, Wong says, Shah Alam’s strategic location gives its industrial sector an advantage and as long as industries here thrive, they will have a spillover effect on housing, retail and services, education and leisure and entertainment.

Besides its housing affordability, availability of jobs and its student population also contribute to strong rental demand in Shah Alam, hence, attracting investors who are looking for rental returns.

Khoo reckons that established townships or master-planned gated-and-guarded communities, such as Setia Alam, Kota

Kemuning, Glenmarie, Section 13 and Seksyen U1, U2, U5 and U8, will attract homebuyers.

Another growth catalyst for the city is the Bandar Utama-Klang Light Rapid Transit 3 (LRT 3) line which is slated to be completed in February 2024.

The 37.6km LRT 3 line which connects Bandar Utama to Johan Setia in Klang, will improve the working population’s mobility to major hubs in Petaling Jaya and Kuala Lumpur, says Khoo.

Jul 26

Love0

Chan Sow Lin: On the slow train to transformation

By koizumi Media Room

PETALING JAYA (July 27): The Jalan Chan Sow Lin area is one of the oldest industrial areas in Kuala Lumpur. It was established over a century ago in the late 1900s.

This article first appeared in edgeprop.my. View source here.

The Jalan Chan Sow Lin area is one of the oldest industrial areas in Kuala Lumpur. It was established over a century ago in the late 1900s.

Named after the late tin tycoon Chan Sow Lin, the area is home to many old and established manufacturing factories, warehouses and car service centres.

However, new developments can be seen popping up in this place over the past few years, including Mah Sing Group Bhd’s Southgate Commercial Centre, The Trax mixed development by Utusan Melayu (Malaysia) Bhd and One Residences serviced apartment by Akisama Group. More developments are on the way, including a 66-storey skyscraper.

On top of that, a mass rapid transit (MRT) station constructed at Jalan Chan Sow Lin will be completed in three years’ time. This MRT station will be connected to the existing light rail transit (LRT) Ampang line and sandwiched between the Tun Razak Exchange (TRX) station and Bandar Malaysia North station.

It is one of the 35 stations along the Sungai Buloh-Serdang-Putrajaya (SSP) MRT line, which is expected to become fully operational by July 2022. The second MRT line in the Klang Valley will connect Sungai Buloh and Putrajaya by running through 37 stations to form a 52.2 km alignment.

It looks like Chan Sow Lin’s gentrification is finally taking shape. But for homebuyers and property investors, should it be included in their watch list? What would the future of this shabby industrial spot look like in the years to come?

Becoming a popular location

Nawawi Tie Leung Sdn Bhd managing director Eddy Wong tells EdgeProp.my that the transformation of the Chan Sow Lin area, with the development of commercial and residential properties there, will make the area more popular in future.

“These developments are expected to improve the appeal of Chan Sow Lin. Its transformation with the development of commercial and residential properties will turn this area into another popular location for property buyers due to its proximity to KL city centre, what more with its improved connectivity and easy access to highways,” he says.

Raine & Horne International Zaki + Partners Sdn Bhd associate director James Tan says that most of the lands in Chan Sow Lin are leasehold industrial lands with only pockets of freehold lands.

“A lot of the lands are industrial but some have been converted to commercial-title,” he says, adding that there are three mid- to high-end projects in the area.

One of the latest completed residential projects is One Residences, a serviced apartment project by Akisama Group along Jalan Sungai Besi.

According to Tan, this leasehold project comprises two 35-storey towers housing 684 serviced apartments.

Completed in January 2019, One Residences was launched with prices from RM577,000 or RM650 psf. The take-up rate stood at 60% as at end-May.

Currently, there are two ongoing developments in the area, namely Trion @ KL and Damai Residence.

Situated at the former Volkswagen showroom site at Jalan Dua, Trion @ KL is a mixed development by Binastra Land Sdn Bhd. It comprises three towers and a podium offering retail lots, a hotel and serviced apartments.

Of the three towers, there will be a 66-storey skyscraper that is expected to become one of the tallest buildings in the vicinity.

According to Raine & Horne, there are 1,344 serviced apartment units at Trion @ KL with built-ups from 689 to 1,055 sq ft. With an average price of about RM800 psf, the units were 70% sold as at end-May.

Damai Residence, on the other hand, is a serviced apartment project by Damai Cheras Sdn Bhd. Sitting along Jalan Sungai Besi, it comprises 443 units with built-ups from 695 to 1,051 sq ft. Priced from RM600 psf, these units were 50% sold as at end-May.

The ongoing developments in the area will provide more exciting products and more choices for homebuyers, says Wong.

“If and when the Kuala Lumpur-Singapore High Speed Rail (HSR) project is revived, Bandar Malaysia will be a transportation hub and the surrounding areas including Chan Sow Lin will benefit from the improved connectivity. Homebuyers will enjoy higher capital appreciation of their properties, and investment properties will offer good rental returns,” he adds.

Chan Sow Lin and Bandar Malaysia are divided by Jalan Sungai Besi. It is a mere 3km drive between Jalan Satu in Chan Sow Lin and Galleria Bandar Malaysia, which is located at Jalan Lapangan Terbang Lama, off Jalan Istana at the former airbase.

The revival of Bandar Malaysia was announced by the government in April this year and according to a statement by the Prime Minister’s Office, the development is expected to generate an estimated gross development value of RM140 billion with the construction of a People’s Park and 10,000 units of affordable homes, among others.

The KL-Singapore HSR, on the other hand, is being reviewed by the government on cost reduction after it has been postponed until end-May 2020.

While the details may be changed from its original plan due to the cost reduction exercise, information on MyHSR Corp Sdn Bhd’s website shows that the HSR will have seven stations in Malaysia, namely Bandar Malaysia, Sepang-Putrajaya, Seremban, Ayer Keroh, Muar, Batu Pahat and Iskandar Puteri, before reaching its last destination in Jurong East, Singapore.

Improving infrastructure

Wong notes that Bandar Malaysia is a huge development that will see infrastructural improvements being undertaken in the surrounding areas as well. Hence, Bandar Malaysia is expected to be a catalyst for growth in the neighbouring areas, including Chan Sow Lin.

Meridin Properties Sdn Bhd senior consultant Cogan Law, who specialises in the locality, believes Chan Sow Lin’s strategic location is what has attracted developers to venture into the area.

“Chan Sow Lin is located opposite Bandar
Malaysia and nearby TRX, a new financial district in the city centre. Furthermore, it is surrounded by matured areas, such as the KL city centre, Taman Maluri and Cheras,” he says.

“The MRT station is expected to further enhance the connectivity of the area as one can easily commute to Bandar Malaysia and TRX,” Law offers.

Bright outlook

Raine & Horne’s Tan considers the outlook for Chan Sow Lin to be fair to bright due to its strategic location and potential spillover from
Bandar Malaysia. However, he expects some challenges that could hinder the growth of the area.

One of the issues is that it has long been entrenched in people’s minds that Chan Sow Lin is an industrial area. That image could deter people from moving into the area, says Tan.

“There is a number of factories still operating in this area, some of which are heavy industries. Would you want to live in an area surrounded by factories?” he asks.

Furthermore, most lands in Chan Sow Lin are leasehold-titled, which would pose a challenge for developers to amalgamate big parcels of land.

“However, there is light at the end of the tunnel — some of the leases are expiring soon and unless the owners have deep pockets to renew [the tenure], they may want to cash out. But it will take time for the relocation and leases to expire. Once a lot more of these factories move out and the area is ‘spiced’ up, then this area will come up,” he elaborates.

“This area definitely has potential and given time, it will rise up although there are challenges,” he concludes.

Law concurs, adding that although Chan Sow Lin is one of the urban renewal areas that is listed under the Kuala Lumpur City Plan (KLCP) 2020, it will take a longer time to see things falling into place as a few of the factories have just started to move out.

“Hence, for investors who are banking on the growth of Chan Sow Lin, they would have to hold on for a longer period to see decent profits if they invest in the area today,” he says.

The KLCP 2020 was gazetted last October while the KLCP 2020-2040 is expected to be gazetted in 2020.

Nevertheless, more mixed developments are expected to come up in the area due to the merits of Chan Sow Lin, he adds.

One of the new projects in the pipeline could be Trax II, a mixed development that will comprise retail outlets and residences on Lot 351, Jalan Tiga at Chan Sow Lin, based on information from The Trax’s website.

Data collated by EdgeProp.my shows that the average transaction price of development lands in Chan Sow Lin was at RM500 psf in the second quarter of 2018 (2Q2018), after hitting its peak of RM736 psf in 1Q2016.

Meanwhile, industrial lands in the area saw average transaction price go up from RM130 psf in 2Q2012 to RM560 psf in 4Q2017.

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5 Klang

4 Puchong

3 Petaling Jaya

2 Cheras

1 Shah Alam

Shah Alam has more to offer

Chan Sow Lin: On the slow train to transformation

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