What does the future look like for Kuala Lumpur’s high end condo market?
The market is poised to have a challenging and uneven road to recovery.
With the steep increase in prices of building materials translating to higher construction costs, Knight Frank notes that prices for residential properties are set to increase moving forward.
This coupled with the recent increase in overnight policy rate (OPR) from 1.75% to 2.0% (with another potential hike in the second half of 2022), will somehow dampen interest in the property market due to higher borrowing cost.
Here’s more from Knight Frank:
On the positive note, Phase 1 of the MRT Putrajaya Line commenced operations on 16 June 2022. The scheduled completion of Phase 2 of the Putrajaya Line in 2023 and the revived MRT Circle Line with completion slated by 2030, will further improve connectivity within Greater Klang Valley. These improving rail infrastructure are expected to lift property values along the routes.
More developers are expected to unveil attractive campaigns to boost sales of unsold inventories and new property products following the end of the popular Home Ownership Campaign (HOC). Boustead Properties, Land & General Bhd (L&G), Sunsuria Bhd and Tropicana Corporation Bhd are collaborating with Affin Bank Bhd for an easy homeownership campaign under the Home Step Fast/-i mortgage product while Sunway Property has launched its Signature Series 2022 campaign, offering sale promotion deals, including free MOT, an interest-free period until year-end and 100% financing from the Maybank Islamic HouzKey programme.
Environmentally friendly homes are becoming more important for sustainability and climate change mitigation. As more purchasers move towards sustainable developments that incorporate eco-friendly features, property developers are gradually weaving the environmental, social, and governance (ESG) aspects into the conceptualisation, design and construction stages of their projects.
SP Setia Bhd has signed a memorandum of understanding (MoU) with Tenaga Nasional Bhd (TNB) to provide smart energy and renewable energy (RE) solutions for the future primary source of electricity to potential buyers. The MoU was signed to ensure the properties are future-ready to support the installation of battery solutions in SP Setia’s upcoming residential and commercial developments. TNB will equip Setia properties and developments with solar, battery and electric vehicle (EV) infrastructure.
CUCKOO International, a maker of healthy home products, intends to work with property developers to promote a healthy lifestyle and living amid the COVID-19 pandemic. The company has partnered with EXSIM Group to install 1,000 water purifiers throughout the building of Scarletz Suites, a serviced apartment project located at Jalan Yap Kwan Seng.
The short-term outlook for the high-end condominium segment remains challenging albeit a slow and uneven recovery due to headwinds in the global and domestic markets - rising inflationary pressure, sharp spike in commodity prices and adverse impact of the on-going Russia- Ukraine war.