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Wednesday, December 9, 2009

Secondary property market to remain soft

PETALING JAYA: The secondary property market in the Klang Valley is expected to remain soft in the next three to six months due to an abundance of supply, according to property consultants and experts.

PPC International Sdn Bhd executive director Thiruselvam Arumugam in an e-mail response to StarBiz, said: “The secondary property market in Mont’ Kiara will remain soft in 2010 as incoming supply and new launches will bring competition.”

“But (demand for) the better managed condominiums will remain unchanged as there will still be a market for this type of property,” he added.

However, Thiruselvam said all the properties (in the Mont’ Kiara area) had seen a decrease in both rental and capital value this year.

A real estate agent concurred that there was an over-supply of property, especially in the Mon’t Kiara area.

However, she said rental rates for some locations in the Klang Valley were “more challenging” than others.

“Selling prices in places like SS2 have been better compared with rentals. In the past five years, the rental rates did not grow as much as selling prices,” she said.

She also said rental rates in selected areas in Mont’ Kiara and Kuala Lumpur city centre were better than others.

“Sometimes it also comes down to word of mouth. Exiting tenants will give good recommendations on locations they think are better than others and this will be the areas that will attract more people.”

She, however said there were some established areas, like Damansara Heights, where regardless of a downturn, selling prices still remained stable.

“Demand there has been good.”

According to Zerin Properties chief executive officer Previndran Singhe, rental rates for Grade “A” office space within the Golden Triangle area has been stable and is expected to improve towards year-end.

“Even in areas such as Damansara Heights and Bangsar, rental rates are expected to increase because there just aren’t enough Grade A office buildings,” he said, adding that the end of the day, it all came down to “location.”

“Let’s just say that if you put up a Grade A office in Balakong, you’re going to have a tough time filling it up.”

Previn also said rental rates for commercial property would remain good in Cyberjaya.

“There is a good demand for BPO (business process outsourcing) offices there.”

He also said the expatriate residential market was expected to remain soft until the first quarter of 2010.

“We expect things to improve in the second quarter. As the effects of the liberalisation measures announced earlier kick in, there should be more demand for residential property from expats.”

By The Star

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