‘Local demand for high-end condominiums to weaken’

-A +A

PETALING JAYA: Local demand for high-end condominiums is expected to weaken within the next 12 months, primarily in the Kuala Lumpur City Centre (KLCC) area, with more developers anticipated to tap foreign markets.

Jones Lang Wootton executive director Malathi Thevendren said the projection is based on the mismatch between the pricing and affordability levels of local buyers.

“Supply, coming in, must match the demand level as there are not many people who can actually afford to buy the high-end condominiums.

“Some developers are even holding back their launches ... [as] they know there’s no market,” she told Bernama on the sidelines of the 17th National Housing and Property Summit 2014 here yesterday.

Malathi is a member of the Royal Institution of Chartered Surveyors and a registered valuer and estate agent with the Board of Valuers, Appraisers and Estate Agents Malaysia.

She said the demand for affordably-priced condominiums will see steady growth, with young couples and professionals continuing to drive the market.

“People’s preferences are still for landed residential properties. But because house prices have escalated over the past two to three years and way beyond the affordability level, many can’t afford to own such landed property,” she said.

Malathi said market prices of most existing high-end condominiums are expected to be stable over the short term, while prices of low- to medium-end condominiums at more popular locations may see some appreciation.

For new launches, prices are likely to increase in line with inflation and higher costs of labour, utilities and new construction materials.
Malathi also said there would be a moderate growth in supply with improvements in infrastructure and transportation, and condominiums being built further from the city. — Bernama

This article first appeared in The Edge Financial Daily, on Aug 28, 2014.