What does the future look like for Kuala Lumpur’s high end condo market?

The short-term outlook remains challenging.

According to Knight Frank, the first half of 2022 ended on a positive note for the high end condominium market as evidenced by robust sales volume and higher sales value. 

Looking ahead, Budget 2023 which will be re-tabled early next year, is expected to include new measures and initiatives to boost the overall economy and property market. 

Here’s more from Knight Frank:

In the earlier tabling of Budget 2023 in October, main highlights included a 2% reduction in income tax, which means that people will have more money in their pockets in 2023 to partly offset higher borrowing costs and the increase in stamp duty exemption from 50% to 75% for residential properties priced above RM500,000 to RM1 million which will end on 31 December 2023. 

The latter will complement the previously announced 100% stamp duty exemption for the memorandum of transfer for homes priced RM500,000 and below until the end of 2025. 

Meanwhile, with the recurring periods of heavy rain that caused flash floods, there has been an increased awareness of environmental issues that have become one of the key considerations when it comes to buying, investing or renting a property. 

Discerning buyers now seek quality and sustainable features such as solar panels, rainwater harvesting, food waste composting, and electric vehicle charging stations when considering property purchases although buying homes with these criteria may come with a premium. 

In promoting and addressing sustainability in projects, Eco World Development Group Bhd and Public Bank Bhd have signed a memorandum of understanding (MOU) to provide green and sustainable development financing. 

With this MOU, Public Bank will offer its Special Sustainable Financing Package for customers who purchase properties developed by Eco World that have been certified green by Green Building Index, GreenRE and other accreditation bodies. 

Similarly, Sunway Integrated Properties Sdn Bhd (Sunway Property) has also signed a MOU with Public Bank Berhad to collaborate on sustainable development projects. With this MOU, customers who purchase green-certified properties developed by Sunway Property are eligible for Public Bank’s Special Sustainable Financing Package. 

Meanwhile, AmBank has entered into a RM100 million green financing facility with Kerjaya Prospek Property Bhd for the development of Courtyard by Marriott Hotel in Bloomsvale. Located at Old Klang Road, Bloomsvale is a mixed-use project that includes a hotel, serviced apartments, office suites, and a shopping mall. The project will be certified with GreenRE’s platinum rating for its residential, and gold rating for the commercial buildings. 

Despite improved performance in 2H2022, the short-term outlook for the housing market remains challenging due to elevated inflation and potential (further) hikes in OPR. Given these factors and the expected economic slowdown in 2023 (both domestic and global), potential property buyers and investors may turn cautious and adopt a wait and see approach. 

However, the recently concluded general election (GE15), which resulted in the formation of a unity government, is expected to steer the country towards better political stability and this augurs well to cement Malaysia’s position as an attractive investment destination. Looking ahead, with better economic prospects, the country’s property market is expected to be sustained.