Costlier land the price of growth

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IN recent years, escalating prices for residential property, especially landed homes in traditional hot spots such as Petaling Jaya, coupled with improving road transport, have seen Malaysians buy homes further away from the Kuala Lumpur city centre.

One such suburb is Rawang, which is located northwest of KL and is part of the Gombak district, under the supervision of the Selayang municipal council. It had started as a small tin-mining town, consisting of only a few rows of shophouses, but today, it is slowly but surely turning into a residential hot spot.

Once a popular rest area for weary travellers making their way north via the trunk roads, Rawang is undergoing a major transformation. As land became scarcer and more expensive in the more mature areas, established industry players have descended upon the sleepy town to snap up parcels of land.

While life continues at a slow and relaxed pace for many of the locals here, the constant flow of vehicles loaded with construction materials in and out of the town is a sign of the changing times.

However, growth comes at a price — traffic congestion in the town centre is getting worse, especially during peak hours. Be that as it may, this will change with the widening of the federal roads in the area.

Several consultants and real estate agents clue City & Country in on the latest developments in Rawang.

Up-and-coming town

In clear traffic, it takes about 45 minutes to reach Rawang from the KL city centre via the Rawang interchange from the North-South Expressway, or the Rawang south interchange from the Guthrie Corridor Expressway and the KL-Kuala Selangor Expressway.

The town is also accessible via a federal road — which is being widened — from Templer's Park to Bandar Baru Selayang. The Rawang railway station located in the town centre serves both the KTM Komuter (Rawang-Seremban) and KTM Intercity train services.

In recent years, new projects in Rawang such as Mah Sing Group Bhd's 225.7-acre M [email protected], have been catering for the increasing demand for well-planned residential developments.

Mah Sing launched the latest phase of its township — 2-storey linked homes called Alpine — at RM438,800 onwards in March this year.

Other new projects include Emerald East and West by Guocoland (Malaysia) Bhd, Saujana Rawang by Glomac Bhd, Bandar Country Homes by Tanco Properties Sdn Bhd and Regency Parc by Next Fortune Sdn Bhd and Mun Poh Corp Sdn Bhd. Developers such as Hong Bee Land Sdn Bhd and Dolomite Properties Sdn Bhd too are part of the action.

To meet the demands of the growing population (530,146 as at January 2011), a number of hypermarkets — including Tesco, Parkson, Giant and AEON, have sprung up in Rawang. NSK Wholesale Trade City has also joined the crowd while a specialist hospital is due to be completed soon in the town.

"Rawang could very well be the next Puchong in 10 years," says Jerome Hong, managing director of PA International Property Consultants (KL) Sdn Bhd. Aside from owner-occupiers, the number of property investors is also increasing.

Hong admits that Kajang has the edge over Rawang with its upcoming Sungai Buloh-Kajang mass rapid transit line, but he also believes the rapid growth of the Rawang property market is sustainable.

"Even though prices have crept up recently, most of the landed homes in the area are still relatively affordable compared with similar properties closer to the city centre."

Chan Wai Seen, director of research and consultancy at JS Valuers Property Consultants Sdn Bhd, believes the current primary and secondary market trends in Rawang are an extension of those in other parts of the Klang Valley, where buyers and investors are looking at factors such as new and contemporary building design, enhanced security features (guarded and limited access points) and good links to highways.

In fact, the secondary market has benefited from the high selling prices in the new projects. With recent launches such as Da Land Sdn Bhd's 2-storey terraced houses (from 2,511 sq ft) going for RM700,000 onwards, and Dolomite Properties' superlinks (from 3,299 sq ft) in Dolomite Templer selling for RM2.061 million, prices in a number of older developments around the town centre have risen in tandem.

"With the right products and location, I am quite optimistic about property developments in Rawang for the medium to long term," says Chan, adding that he does not see prices in the new projects falling because construction costs are high and the features offered by the developers are attractive.

"If the developers can deliver the products as highlighted in the brochures and the sale and purchase agreement, growth is sustainable."

Chan is also positive about the demand for new landed properties in established and fast-growing areas, including Rawang, as their supply in and around the Klang Valley is limited due to a scarcity of land.

Escalating land prices and capital values

Land prices and the volume of transactions have shot up drastically in Rawang in the past three to four years, says Edmond Lim, founder of Lotus Home Realty Sdn Bhd, which has been active in the area in the past decade.

The price hike will no doubt translate into higher prices for future developments in the area, he adds.

Land in the Rawang town centre, which was priced at RM70 psf onwards three to four years ago, is now going for as high as RM140 psf while near Bandar Puteri, it is now RM68 psf onwards compared with RM28 psf before. It is worth noting that the status of most of the land in Rawang is either agricultural or industrial.

According to Lim's business partner Joyce Chin, prices are rising because there is not much land left to develop around the town centre. The remaining vacant plots are smaller than five acres and are mostly owned by Rawang folk, she says, adding that all the land in the town centre is leasehold.

Land prices on the border of Rawang, which is Serendah, Hulu Selangor, have also picked up. Plots that once cost only RM38 psf are now commanding up to RM110 psf.

Greater connectivity

Better connectivity in certain parts of Rawang is also playing a role in inflating land prices. This is especially so in the Jalan Tasik Puteri area, which will soon be connected to the KL-Kuala Selangor Expressway, which in turn is connected to the Guthrie Corridor Expressway (which leads to Shah Alam) and the North-South Expressway.

Prices are also up in areas along the proposed KL Arah Serendah Expressway.

The capital values of landed homes in Rawang are increasing as well. Two-storey semi-detached homes with a land area of 3,200 sq ft in Rawang Perdana that sold for RM330,000 to RM370,000 in 2007 were transacting at RM500,000 to RM520,000 last year. Similarly, the 1,650 sq ft, 2-storey terraced houses in Kota Emerald that went for RM190,000 to RM220,000 three to four years ago are now fetching up to RM480,000.

Interesting activities around town

Rawang is set to have its first high-density condominium called Legendview by Legendview Development Sdn Bhd. The leasehold development is located in a mature part of town, near Tesco, and comprises three blocks.

According to the project's marketing agent, more than 50% of the units in the first block were taken up in the soft launch earlier this year. The 850 to 1,568 sq ft condos were sold for about RM340 psf.

The agent says the transaction of several plots located southeast of Rawang town is under negotiation. The hilly area, though unsuitable for a large township, has good potential for high-rises because it borders several forest reserves.

Rawang is home to three forest reserves — Templer's Park, Hutan Lipur Sg Kanching and the Commonwealth Forest Park — that are popular spots for jungle-trekking and camping enthusiasts.

There is also some activity near the Rawang Industrial Park. A few years ago, a businessman bought 141 old shoplots there at about RM500,000 each. The shoplots were then given a makeover and put on the secondary market for RM1.3 million each in June last year.

Meanwhile, the government is planning some redevelopment around Kampung Rawang Tin, which is located in the centre of town.

With so much going on in and around it, Rawang is no doubt en route to becoming a popular address and a property hot spot.

This story first appeared in The Edge weekly edition of July 15-21, 2013.