By IZZAT RATNA / Pic By AFIF ABD HALIM
High-rise residential developments in the Klang Valley — particularly SoHo (small office/home office) units — could fetch a lower price in the sub-sale market, said property consulting rm CBRE-WTW.
MD Foo Gee Jen said SoHo units have been quite prevalent in the auction market, being sold between 25% and 30% lower than the original selling price.
“However, I do not think this reveals the true reflection of the secondary market. In fact, the price can be lower in the sub-sale market,” he told reporters at a media briefing in Kuala Lumpur yesterday.
“The reason being over the last three to four years, the industrialised building system was introduced, accompanied by various rebates from developers that can go as high as 15% to 20% in the market.
“Therefore, if the auction market is only going under 30% for SoHo units, there is actually no discount because of the money that was already put in by the buyers. Banks are actually throwing back the unsold stocks at the initial marked-up price,” Foo said.
The average selling price from SoHo units in the central region starts at RM400,000, depending on its location and surrounding amenities.
The firm noted although the present market situation is soft, the overall performance of the condominium market can be considered stable.
In terms of the absorption rate, it demonstrated improvement of 9% year-on-year to reach 66% in the third quarter of 2017 (3Q17).
As for the occupancy rate, it has been hovering around 60% since 2016. New launches in 2017 declined from 3,900 units in 2016 to 2,500 units with an average sales rate of 58%.
Ongoing developments of flagship projects including the Tun Razak Exchange, Bukit Bintang City Centre and Bandar Malaysia are expected to sustain the condominium market in thecity.
Meanwhile, commenting on the overall residential segment, Foo said the residential segment is expected to remain flat throughout this year.
“Volumes for the residential segment have improved significantly, supported by the developers’ shifting strategies to cater to the market’s demand,” he said.
In the Klang Valley, more landed products within the RM500,000 have been rolled out, while outside of the Klang Valley, developers are pushing products within the region of between RM300,000 and RM350,000.
Foo credited Bank Negara Malaysia’s (BNM) cooling measures in recent years as a success — especially in bids to avoid a property bubble from happening in the immediate future.
“Firstly, we have not seen any panic selling happening in Malaysia. Of course, in some locations, perhaps in areas such as Cyberjaya, there are some concerns over the empty stocks and unsold units.
“However, the overall residential segment is still doing well. This is attributed to the cooling impact by BNM, which has managed to curb speculations and prevent any overheating in pricing points,” he said.
Pricing points for the residential segment moderated between 5% and 8%, which are aligned with the movement of salary increment that is currently hovering at 5% to 6.5%.
According to CBRE-WTW’s 2018 Asia Pacific Real Estate Market Out- look Report, there were over 228,543 transactions in 3Q17 worth RM102.29 billion — a decline of 5% in volume, but increase of 7% in value compared to 3Q16.
The residential sector continues to dominate the overall market with 62.1% of market share in volume and 48.7% in value.