Saturday, October 13, 2012

The Future of Property Investment in Malaysia

Hello. Hope you guys are fine. I'm taking a few minutes here to share about my opinion regarding the property market in Malaysia especially the ones in Klang Valley.

I have not ventured in properties outside KV as one of the rules of property investment is to really know the place you are investing. Thus, this opinion is strictly based on KV only.

The Government is doing a great job with the construction of MRTs to make Klang Valley a more convenient place to stay in terms of trying to go from point A to B. This should provide an investment opportunity to investors who might think better transportation networks would lead to better investment returns. This is usually true as long as the trains don't make so much noise pollution.

I believe the property prices for high rise residential should smoothen, if not decrease. Maybe it's about too late, people are eyeing for landed properties now. I myself did not invest in high rise buildings as I was a late starter and the prices for this type of properties were shooting up like there is no limit. So, I believe landed properties are still the safer bet. Of course I'm not betting here but rather knowing the situation I was facing at that time, landed properties tempted me more for its guaranteed capital appreciation.

Of course if it was the year 2006 (with good financial backup) I would have bought more than I currently have but linked-houses (Super Link or not) nowadays are going for minimum RM 700K for new sales. Still, people feel the price is fair for a landed property. The same cannot be said about high rise properties. At least according to a small time investor me.

Fret not. Some say there will be a bubble burst for the property market in Malaysia. If you ask me, yes, maybe for the high rise pigeon holes that are selling for a minimum of half a million. Not trying to be mean but I really, really think the prices for this kind of properties are astronomical! If you feel that you are ready to part away half a million for a small SOFO SOHO SOVO whatever you are calling it, make sure the financial plan is there for you or you will end up SOHAI. The rule is simple. For high rise properties, you are talking about the amenities that they have nearby and also the location. Plus, investing in properties of this kind should give a healthy ROI of at least 7%. It is indeed, a rental-linked property investment. Also, remember you have to compete with 200-400 other units to secure tenants or for some who feel flipping is a good idea. Yes, the bubble may come for these properties. When? Depends on how fast or slow the buyers will realise they are overpriced.

Those who invested in high-rises in 2009 and earlier should not worry though as the prices then were more reasonable. Half a million for a 700sq ft studio. Pfah!

The game the developer will play now is to sell townships and SP Setia, Mah Sing, Sime Darby and InP are the front runners in providing them. The areas might sound ridiculous now like Bandar Rimbayu, Semenyih, Klang, Bangi or Rawang. However, Kota Kemuning, Alam Impian, old Rawang, Bandar Bukit Raja turned out to be great as we speak. As land is somewhat scarce in Klang Valley, anything landed is the way forward it seems. The highly anticipated Kwasa Damansara is in the pipeline but I do not think it will come cheap. Nevertheless, you will see the sale to be very encouraging.

So, the future? GE or not the property market will still blossom. Of course the high rise residential and commercial properties will soften but for landed, rich Malaysians will be up and ready. I myself have a few targets on but will only make my debut on high rise when the right time (and price) comes. But remember, invest responsibly. Don't go above your threshold. You do not want to become bankrupt at a young age. Don't be too enthusiastic and then you forget the major rule of investment - positive cashflow.

6 comments:

shaun said...

The prospect and landscape for landed property is very encouraging. I visited some very trendy 4-story super-link and 3-story houses in gated communities. One of the trend that is on the rise is having a home lift installed.

shaun said...

One of the rising trends in high-end landed property is to have a home lift installed.

Jardin Smith said...
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Clifford M. said...

You said shaun that you've visited the place. So how was the neighbor? It is one of the factors that could convince the buyer, right?

Brianlinnekens said...
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Projects in Dwarka Expressway said...

Nice Post, Malaysia is the rising trends in real estate business.