They concurred that the market was still able to absorb the incoming supply although in the short term, there might be an oversupply in the residential sector.
In the next one to two years, 3,000 more residences will come on stream in addition to the existing 6,000 units.
In the commercial market, a lack of Grade A office space has resulted in high occupancy and rental rates for offices.
Zerin Properties Sdn Bhd chief executive officer Previndran Singhe said the price level of RM2,000 per sq ft for upmarket apartments now was reflective of the pent-up demand for such units in the KLCC area.
“The next price level will be around RM2,500 to RM3,000 per sq ft (psf), and going forward, the really good projects may even touch RM3,500 psf.
Despite the steep price appreciation in the last two years, real estate around the KLCC is still considered cheap compared with those in other cities like Singapore, Bangkok and Hanoi.
“We expect the market to reach equilibrium in the next three years,” Previndran told StarBiz. The escalating price of land in the KLCC area has also driven prices upwards.
From about RM500 to RM600 psf about three to four years ago, land price has breached RM1,000 psf, with those closest to the Petronas Twin Towers, such as along Jalan Kia Peng, fetching around RM2,000 psf.
The rising land price has driven developers to turn to alternative locations like Jalan Aman and Jalan Damai, off Jalan Tun Razak, where land can still be purchased at RM350 to RM500 psf.
Bukit Ceylon, with land going for RM500 to RM600 psf, is another good alternative.
According to E & O Property Development Bhd marketing and sales director K.C. Chong, the RM2,000 psf level for apartments in the KLCC area has been breached by only a small number of units in certain developments.
K.C. Chong
“Prices generally average RM1,000 to RM1,500 psf, hence there is still room to move upwards,” he said.
Chong said that while looking at the price trend, it was also important to consider the absolute price of the property as the built-up of the units differed.
“The higher prices allow developers to offer properties of a higher quality, with better finishes which local developers have been unable to offer previously,” he said.“We are a now able to compete better on the world stage, offering products which are comparable to our overseas competitors.”
Mah Sing Group Bhd president and group chief executive Datuk Seri Leong Hoy Kum said that despite the steep price appreciation in the last two years, real estate around the KLCC was still considered cheap compared with those in other cities like Singapore, Bangkok and Hanoi.
Datuk Seri Leong Hoy Kum
“KLCC's top-end condominium price at RM2,000 psf is only 20% of Singapore's high-end condominiums which are priced around S$4,000 psf,” Leong said.
Manfred G. von Nostitz, former Ambassador of Canada in Malaysia, concurred that Malaysia's real estates were still undervalued and under exposed to foreign investors.
The prices of apartments in Toronto are in the range of RM3,000 to RM4,000 psf while in Singapore, they are between S$2,000 and S$4,000.
“Malaysia has much to offer - relatively cheaper real estate, sophisticated legal system, good infrastructure, political stability and good economic prospects. The transparent land and property laws are also reassuring for investors.
“The Malaysia My Second Home programme, if successfully implemented, should also provide a big boost to the property market,” he said.
Von Nostitz is working with some local partners to attract European and American private equity funds to invest in Malaysia's real estate.
Manfred G. von Nostitz
Although Malaysians are the biggest purchasers of residences in the KLCC area, foreign buying is growing and today accounts for 30% to 35% of the units sold.
The exemption of Foreign Investment Committee approval for foreign buyers of properties priced from RM250,000 and exemption of real property gains tax last April have spurred strong buying interest from Singapore, Hong Kong, Indonesia, and Britain.
Apartments that have been sold out after the relaxation of the guidelines include Cendana, 2 Hampshire, K-Residence, Park Seven and Binjai Residency.
Leong said more modern global designs could also be expected as developers were now engaging international architects for their projects.
“These cutting-edge architecture will be a much welcome addition to the Kuala Lumpur skyline,” he said.
By The Star (by Angie Ng, Fintan Ng, Shannen Wong)
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