Minimum purchase price for Malaysian properties may increase

Foreign ownership of properties in Malaysia have been out of the news for awhile. And as popularity of homes in Iskandar Malaysia has risen, especially amongst Singaporean investors, the Malaysia government may be considering raising the entry price bar for foreigners, in turn making it easier for Malaysians to own property.

KL Kepong PropertyAs the ringgit continues to weaken, the Malaysian government may increase the minimum purchase price for foreign buyers of Malaysia properties. The move may not affect foreign buyers as much since the currency exchange rates still favour them for now. The Housing Minister Noh Omar says the motivation behind the possible policy change is to give Malaysias more options and availability when it comes to property ownership.

The minimum purchase price for foreign property buyers has been raised twice in the last 20 years and currently stands at RM1 million (S$318,000). State governments are however allowed to set their own limits. The Penang state government has for example set their minimum purchase price at RM800,000. The government is in discussion on the 2 options in which the policies can be adjusted – 1) to raise the floor price of RM1 million per property or 2) to set the minimum purchase price in US dollars for all foreign buyers.

But before the new policies are implemented, will there be increased fervency for Malaysian properties, especially in states popular with foreign buyers such as Penang, Malacca, Kuala lumpur and the Iskandar Malaysia region?

Winds of change in local property market

A decade or so ago, owning a second or third property might be the fastest way to secure your retirement funds or to even accumulate a tidy little kitty. Investment properties were considered a surefire way of earning additional income, but in the climate of today, property owners and investors have much more factors to consider and competition to battle against.

SunshinePlazaResidencesWith the rental market weakening, property agents are finding that it takes twice as long and also many more viewings before a property is successfully tenanted. And even then, for much less than before. Some property owners have had to reduce rents by almost half. Leaving the units empty are simply not an option for some investors as the rents go towards the mortgage or mortgages of their properties. It is after all better to have less help than none at all.

SerangoonHDBflatFor new investors looking to enter the market, the environment is a lot tougher than before. Considerations such as whether there is a large pool of HDB flats available for rental nearby, the long-term potential of the property, competition from other new launches or even within the same property, whether the local and global economy will affect businesses and commercial hubs nearby thus reducing the pool of foreign tenants, and so forth.

Before the market makes a complete recovery, a possibly lengthy period of stabilisation will ensue, despite the governments having made some allowances in the are of the property cooling curbs.

Grand opening launch for Grandeur Park Residences

The latest property development in Tanah Merah has sold more than half of its units over a weekend. Grandeur Park Residences reported strong sales with at least 58 per cent of its 720 units sold during its launch.

GrandeurParkResidencesSmaller apartments seem to be popular once again as the project sold most of the 96 one-bedroom units made available during the launch. Selling prices averaged $1,350 psf. The location, in close proximity to the Tanah Merah MRT station, could be one of the main factors pushing buyers to seriously consider the long-term and rental potential of the property. The condominium project which is also close to the Changi Business Park also has two- to five-bedders with prices starting from $550,000 for a one-bedder and $700,000 for a two-bedroom unit. Though the rental market is weak at the moment, buyers are counting on the property market rebounding by the time the project is ready for occupancy.

GrandeurPark2
Following the first private condominium launch this year of The Clement Canopy, response at the Grandeur Park Residences launch may be an expression of pent-up demand which could release keen albeit selective buyers back into the fold. However, the eagerness to snap up smaller units mean a lower overall quantum which may keep market figures low or at best level.

New property launches in Clementi and Choa Chu Kang drew crowds

When a new condominium becomes available in a mature estate, it usually excites the crowd. Especially if the estate has not had a new launch for sometime.

iNzExecCOndoPhoto credit: www.inzresidence-ec.sg

Demand for new private residential units have been on the rise since late last year and pent-up demand following the year-end festive season plus the affordability of units at The Clement Canopy in Clementi have brought in the crowds at its launch last weekend.

195 units from the 505-unit The Clement Canopy has already sold on its first weekend of the launch – that is almost 80 per cent of the 250 units released. This new development leans heavily on 2-bedroom units with almost 40 per cent of the apartments sized between 635 to 732 sq ft and priced between $850,000 to $1.2million.

ClementiCanopyPhoto credit: http://clementcanopy.info

The growing interest in the property could be precisely because of the reasonable quantum prices. The project’s green features and location also adds to the potential resale value of the units as some buyers who have been waiting for drastic changes in the property market make the decision to strike when the iron is hot. The discounts of $6,000 to $12,000 afforded buyers over the weekend may also have sweetened deals of course.

Elsewhere, the iNz executive condominium (EC) was also launched to welcoming response. Developed by Qingjian Realty and situated in Choa Chu Kang, it is the first EC to be launched this year. E-applications for the project will end on March 5.

 

New private home sales rise 17.6%

In a year-on-year comparison, new private home sales has risen a promising 17.6% since last January. With 381 units sold last month, an increase from the 324 from the same month last year and up 3.8 per cent from December’s 367 units, it’s safe to say the year for the new non-landed residential homes market segment has gotten off to a rather good start.

Suburban condominims made the biggest showing with 238 units sold last month. 110 units were sold in the city fringes followed by 33 in the core central region. Parc Riviera came out tops with 38 units sold at $1,270 psf, followed by 25 units at The Trilinq at $1,399 psf. Developers have been aggressive in their marketing and pricing strategies, offering discounts and lowering prices to make it palatable overall to increasingly savvy buyers.

parcriviera2The new property launch earlier this month, Clement Canopy, together with last weekend’s launch at Grandeur Park Residences, and upcoming launches at Park Place Residences and Seaside Residences, will be a boost to the quarter’s sales volume.

While no quick nor drastic rebound is expected for the year ahead, industry experts are nevertheless hopeful about the performance of this market sector. They expect demand to hold steady and a sales figure of about 7,000 units. Essentially, the pins holding down the pricing structure are the cooling measures though there might be a bit of give should the interest rates change.

Resale condominium market in gradual recovery

Could a slice of sunshine be sliding its way back into the local private property market? Resale condominium prices have risen 1.1% in January and it’s a bigger increase than the 0.5% in the last 2 months of 2016.

RivervaleCrestAnd as expected, non-landed private residential properties located in prime districts lead the way, with a 1.9% month-on-month increase. Central region properties also gained 1.5% in terms of prices while that of suburban properties rose by 0.4%. In a year-on-year comparison, resale prices were 0.3% higher than in the same period of 2016.

In some districts, resale properties exchanged hands at lower-than-market value, though the price difference at minus $4,000 is lesser that the $5,000 in December. District 23 posted more than 10 resale transactions in January alone and selling prices went as high as $2,000 above market value.

GrandeurParkResidencesThough the year is still young, it could be a budding sign of the things to come for the rest of the year. Property analysts are not expecting sharp rebounds anytime soon, though the stabilisation of prices and an increase in sales volume would already be sufficient to signify market recovery, albeit a gradual one. What could also be seen from the market data was that sellers were beginning to moderate their asking prices, possibly with pressure coming in from new property launches and completed new units entering the weak rental market.

 

Demand for well-located properties remain high

Properties near MRT stations often bring in the buying crowds. And there will be 2 such properties to look forward to in the first half of 2017.

GrandeurParkResidencesThe first is the 720-unit Grandeur Park Residences which is expected to launch in March, near the Tanah Merah MRT station. It’s proximity to transport, the inclusion of a childcare centre and 2 shop units is expected to add value to project. 1- to 5-bedroom units here will range between 420 sq ft and 1,450 sq ft in size. And if prices at the neighbouring The Glades are anything to go by, the units at Grandeur Park Residences may be priced between $1,300 to $1,400 psft.

Situated near East Coast Park and the upcoming Siglap MRT station, is the 843-unit Seascape Residences. With sea views and as one of the first private condominium projects to come up in the area in the last decade and a half, this new project along the coastline may make quite the splash on its launch. Prices are expected to hover between $1,550 to $1,650 psf.

SeasideResidencesDespite a weak economy and the property cooling measures, demand for new homes remain resilient and while buyers may be more selective with their purchases, properties which are well-located and offer competitive pricing will still sell. Interest rates remain a uncertain factor impacting market sentiments however, as sudden spikes may affect demand.

Launches of new projects can often boost sales of new homes across the board and this first quarter could very well already set the tone for the rest of the year.

New property launches to welcome by April 2017

Come the fourth month of the year, and the property market will be seeing as many as four new property launches spicing up the mix. Sentiments have been looking up of late as more buyers are coming to terms with the market reaching the bottom of the cycle, and these new launches may welcome increased interest from buyers. Property analysts are expecting up to 9,000 new home sales this year.

ClementiCanopyPhoto credit: www.theclement-canopy.com.sg

The 4 new upcoming launches buyers can look forward to are:

The first project expected to launch as soon as next month is the 505-unit Clementi Canopy. Though recent trend has shown smaller units as being more popular with buyers, this development will feature mainly 2-bedders to 4-bedders sized between 635 sq ft to 1,500 sq ft, with the former making up almost a third of the units.

Paya Lebar Quarter_LendleasePhoto credit: Lendlease

One of the more exciting projects from the list above is Park Place Residences at PLQ. It is Lendlease‘s first residential project in Singapore and the rejuvenation plans for Paya Lebar, to build an integrated development in Paya Lebar Central, may be the nectar that attracts buyers. The project is directly linked to the Paya Lebar MRT station and will also include residential units with a range of 1- to 3-bedroom apartment units, 3 office towers and a retail mall with more than 200 stores. Successes of previous launches and sales of similar projects such as NorthPark Residences and The Poiz Residences are signs of assurance for the developers that take-up rate will be positive.