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Monday, July 14, 2008

Opportunities in high-end segment

Mass townships such as Setia Alam that are equipped with all the elements for healthy living, learning, work and play will become more sought

Although the increase in the price of petrol and escalating cost of living has affected sentiment in the property market, especially for the lower to medium-priced property, there are still pockets of opportunities to be tapped.

Developers said housing products priced at less than RM300,000 a unit now take more than nine months to be fully taken up while those priced between RM300,000 and RM800,000 take about six months to a year.

However, demand for houses priced at more than RM1mil remains good and these high-end units usually take only a week to be fully taken up.

According to Glomac Bhd group managing director Datuk F.D. Iskandar, since the 30% rise in construction cost and 40% fuel hike in the past six months, developers of medium-range residential properties priced between RM250,000 and RM300,000 were the worst hit.

“This is because 60% to 70% of the country's population belong to the middle class. Potential buyers have turned cautious since the rising inflation and they have changed their priorities to lower their financial commitments.

“With interest rates expected to start rising in the coming months to curb rising inflationary pressure, market sentiment is expected to soften further for the lower-to-medium property sector.”

On sustaining interest for properties in the Kuala Lumpur City Centre (KLCC) area, Iskandar said given the competitive pricing of residences around the KLCC compared with other global cities, investors saw good upside potential for these properties and the response had been good.

Concurring with Iskandar, SP Setia Bhd group managing director Tan Sri Liew Kee Sin said higher-end property buyers were more resilient and recession-proof.

“While buyers in the medium-range market comprised mainly end users now, high-end investors are driven by the opportunity to invest in property as a hedge against rising inflation.

“Those who are serious investors always have an eye for premium properties at attractive entry price to enjoy good capital appreciation potential or rental yields,” Liew said.

He foresees that the fuel price hike would result in more pronounced demand for properties in areas that provide integrated amenities in a single location.

“Mass townships such as Setia Alam that are equipped with all the elements for healthy living, learning, work and play will become more sought-after, as residents and businesses find it more cost-effective to move into well-connected suburban townships with main highway arteries,” Liew said.

Mah Sing Group Bhd president Datuk Sri Leong Hoy Kum said developers should look into offering good value products to help ease the people’s burden.

To suit the needs of the current times, Mah Sing is redesigning its property offerings which has given rise to new trendy design elements such as the use of windows extension to promote cross ventilation and lower electricity consumption.

Leong said innovative and cost efficient designs that embrace practicality and sustainability were important considerations for house buyers these days. “Ecologically friendly and passive, low energy designs will make their way into homes,” he added.

Sunway City Bhd managing director Ngian Siew Siong said the property market was getting more competitive and newer properties with facilities that promote quality lifestyle, well-designed and sustainable products, as well as safe environment would be much sought after.

“By offering value innovation in our product offerings and consistent delivery of quality products and services, we aim to set new benchmarks in new growth markets,” Ngian said.

Gamuda Land Sdn Bhd managing director Chow Chee Wah said the company also placed much importance on sustainable living environment in its developments.

These include providing efficient road network systems with dedicated interchanges, reliable traffic management systems, modern facilities and commercial centres.

By The Star (by Angie Ng and Eugene Mahalingam)

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