This article first appeared in City & Country, The Edge Malaysia Weekly on January 24, 2022 - January 30, 2022

The subsale market stayed soft during the quarter in review while the primary market saw a pickup in sales after developers were allowed to open their sales galleries, Savills Malaysia associate director, research & consultancy, Fong Kean Hwa said in presenting The Edge | Savills Klang Valley High-Rise Residential Property Monitor for 3Q2021.

“Many developers reported improved sales rates for their projects, especially affordably-priced residential projects in both landed and high-rise segments in Greater KL. We expect new project sales to continue to pick up due to the Home Ownership Campaign, which ended Dec 31, 2021,” Fong says.

“However, the subsale market’s challenges are the disparity between bank valuation and asking price, and the high entry cost compared to the developers’ new launches.”

Meanwhile, although Budget 2022 had few goodies for the property market, the removal of the real property gains tax (RPGT) for residential property sold in the sixth year and onwards is encouraging, Fong says. “We hope the removal of RPGT will encourage more transactions in the secondary market.”

In addition to the RPGT removal, other property-related measures announced in the budget include a special tax exemption for building/commercial unit owners who give at least a 30% discount in rental, a RM1.5 billion allocation for continuing low-cost housing projects, and a RM2 billion allocation as a housing credit guarantee scheme to help those without a stable income — such as gig economy workers — buy a house, he notes.

In 3Q2021, property market activity in KLCC, Bangsar and Mont’Kiara remained slow, says Fong. “The secondary market remained flat in general but there was no dramatic price decline.”

He adds that the capital value of the selected samplings in KLCC, Bangsar and ­Mont’­Kiara, comprising mainly 2-bedroom units, saw minimal quarter-on-quarter (q-o-q) movements. “On a year-on-year (y-o-y) basis, the capital value of the selected samples in Mont’Kiara declined by 2.1% to RM704 psf in 3Q2021. Average capital values in KLCC dropped by 1.2% to RM1,108 psf, while those in Bangsar fell 1.8% to RM889 psf.”

“The price gap between capital value and asking price in KLCC was 12%, followed by Mont’Kiara at 11% and Bangsar at 8%,” he adds.

Similarly in Selangor, the subsale market stayed flat during the review quarter. “Our samplings’ capital value in terms of per sq ft declined q-o-q between 0.5% and 4.8% in all the areas,” says Fong. The selected samples in Selangor focused on 3-bedroom units.

The sampled properties’ asking price also recorded a marginal drop of 1% to 2%. “The price gap between capital value and asking price in Bandar Sunway, Subang Jaya and Petaling Jaya appeared lower at 1% to 9% as compared to KL,” he adds.

KLCC’s subsale market remained mostly inactive during the review period. The capital value of the sampled 2-bedroom properties averaged at RM1,108 psf in 3Q2021, recording a drop by 1.2% y-o-y and 0.6% q-o-q. The asking price for similar property types also experienced a drop of 3.3% y-o-y and 1.9% q-o-q, notes Fong.

In Bangsar, the average capital value of the 2-bedroom properties declined by 1.8% y-o-y and 0.5% q-o-q to RM889 psf during the quarter. The average asking price for similar properties stabilised at around RM952 psf in 3Q2021.

“The subsale market in general remains challenging and investors are willing to negotiate to [attract] buyers. The price gap between the capital value and asking price was about 8%,” Fong observes.

Some of the more recent launches in Bangsar include leasehold developments Residensi 38 Bangsar by UDA Holdings Bhd and Bangsar Hill Park by Bangsar Hill Park Development Sdn Bhd. Residensi 38 Bangsar offers units measuring 580 to 1,442 sq ft that are priced at RM1,070 psf, whereas Bangsar Hill Park has units measuring 917 to 1,478 sq ft at prices ranging from RM845 to RM1,000 psf.

As for Mont’Kiara, the average capital value of the sampled 2-bedroom units declined by 2.1% y-o-y to RM704 psf in 3Q2021 from RM719 psf in 3Q2020. “The asking price was also softening during the review quarter, indicating a hard time for the subsale market. However, the Mont’Kiara market was relatively active compared to KLCC and Bangsar,” says Fong.

According to him, the price gap between the capital value and asking price in Mont’Kiara was about 11%.

Some of the newer projects in the area are Allevia Mont’Kiara and Residensi Astrea, both by UEM Sunrise Bhd. Allevia’s units range from 1,700 to 2,600 sq ft, with prices between RM800 and RM900 psf. The project is slated to be completed by 2025. Residensi Astrea offers units ranging from 1,364 to 1,859 sq ft, with prices from RM850 psf. Completion is this year.

In Bandar Sunway, the capital value of the selected 3-bedroom sampled properties saw a decline of 2.8% y-o-y and 1.2% q-o-q in 3Q2021. “The subsale market remained inactive during 1H2021 and we observed that the asking prices dropped accordingly by 3.1% y-o-y, narrowing the price gap between buyers’ and sellers’ expectations,” says Fong.

Newer projects in Bandar Sunway include Union Suites by Symphony Life Bhd.

The overall subsale market in Subang Jaya remained inactive during the review period and Fong “expects the same in the near term”. The average capital value of the 3-bedroom samplings in Subang Jaya dropped by 4.6% y-o-y and 4.8% q-o-q to RM513 psf in 3Q2021.

The asking prices of similar units also experienced a decline of 4.1% y-o-y, and a slight drop on a q-o-q basis.

Newer projects in the area include the 234-unit Aurora @ Subang Jaya City Centre development by Sime Darby Property Bhd. Unit prices are from RM740 psf and the project is slated for completion in 2023. Another project is Dorsett Place Subang Jaya, which offers unit sizes ranging from 400 to 1,515 sq ft that are priced at around RM800 psf.

In Petaling Jaya, the average capital value of the 3-bedroom sampled properties was generally stable at RM631 psf in 3Q2021, compared with the same period last year. “However, we observed a drop in asking prices of 3% y-o-y in the inactive subsale market,” says Fong.

He adds that the same asking price of these properties was below the last transacted price. “The price gap between the capital value and asking price was narrow, indicating the same expectations [from] buyer and seller.”

Recent projects in Petaling Jaya include Tropicana Miyu by Tropicana Temokin Sdn Bhd, Megah Rise by PPB Group Bhd, Sunway Serene by Sunway Property Bhd, Panorama Residences by LLC Properties Sdn Bhd, The Mate @ Damansara Jaya by OCR Group Bhd and The Arcuz and D’Cosmos Residences by Exsim Group.