Lowyat.NET: Latest topics by Webspeed

YOO8@ 8 Conlay Versus Kirana Residence

Webspeed — Mon, 08 Aug 2022 11:42:18 +0800

8 Conlay is the maiden mixed use property development project by KSK group (which has its roots in insurance). “With three skyline-altering towers ranging from 56 to 68 storeys in height, 8 Conlay is a development in a class of its own. Designed by RSP, a leading Malaysian architecture firm, this one-of-a-kind development in the centre of Kuala Lumpur features spectacular (twisting twin towers) branded YOO8 residences serviced by Kempinski, and lifestyle retail quarters that embody bespoke living at its best.” source : KSK Land's website.

Tower A of YOO8 is currently 80% sold, while Tower B is about 40% sold. 60% of 8 Conlay's YOO8 buyers are reportedly foreigners. Tower A with interiors by Steve Leung is scheduled for completion in early 2023, Tower B (interiors by Kelly Hoppen) in end 2023. The 5* hotel by Kempinski is slated to open later in the first half of 2024. But a marketing person at KSK said a soft opening for the hotel might be as early as late 2023.

Completion of the 8 Conlay project was originally targeted for 2020 but was pushed back because of the start of MCO. KSK Land replaced it's main contractor with Grand Dynamic Builders Sdn Bhd, a subsidiary of a KLSE listed company in October 2020.

At prices ( after rebates and discounts are applied) that range from RM3200-3400 PSF and up, YOO8 is priced nearly 6 times the price of a freehold 3842sf four bedroom unit at Kirana Residence that is up for its 4th auction at RM569 psf on 8 July. Kirana Residence is a luxury condominium that Malaysia's #1 property search portal says is the epitome of a KLCC Luxury Condominium : “…..precise definition of a luxury condominium. Everything you need for a modern lifestyle is a hop, skip and a jump from your doorstep”

YOO8 USPs & X Factor
According to a AVP in marketing at KSK I talked to what makes the two YOO8 residential towers unique and iconic are their:

Branding ( with 5* hotel services provided by Kempinski, tagged as “Serviced By Kempinski" and fully furnished interiors by world famous designers, Steve Leung and Kelly Hoppen)

Twisting twin towers design,

Nice views of the KL skyline (mostly at Tower B, some units of Tower A face Tower B because of the twisting design),

Close association with the Kempinski KL 5* hotel and

Proximity to a luxe retail podium block. KL's biggest premium shopping centre, Pavilion mall , is just a 3 minutes walk away (via the pedestrian link bridge from Banyan Tree Hotel )

Connectivity - a direct link to Conlay MRT is pencilled in. When completed 8 Conlay residents will be able to get to most KL's retail and commercial buildings easily.

8 Conlay's e-marketing brochure says the YOO8 Branded Serviced Residences are “in the centre of Kuala Lumpur”. But in my opinion, they are actually much further away from the epicenter of the Kuala Lumpur City Centre (KLCC), represented by KLCC Park than my 5* KLCC luxury condominium at 7 Jalan Pinang, Kirana Residence.

Kirana Residence in fact is just 100 metres away from KL's best inner city park - separated only by a hotel car park- compared to 1 km for 8 Conlay. A marketing spokesperson said KSK is thinking of opening up a shorter route for residents to KLCC Park.

I think YOO8's X Factor is its Water Lounge located on the 26F which has the following facilities :

Gymnasium

Landscape Garden

Changing Room

Toilet

Kids Area

Pond

Pool Deck

Reflection Pool

YOO8's 5* “Serviced By Kempenski” Services & Amenities
The 5* Kempinski Hotel Kuala Lumpur is only scheduled to open in 2024. If assuming the 2023 date for Vacant Possession (VP) is as promised, YOO8 buyers still won't be able to enjoy the full range of 5* hotel services until the Kempinski hotel and restaurants in the 4 storey retail podium open.

YOO8 amenities are mainly located on the 26F and 44F and comprise a gym, a Water Lounge (ripple pools), a Green Refuge (landscaped gardens), a Multi Purpose Room, a Chill Out Room, a Lounge Room and a Games Room.

Kirana's USPs & X FACTOR
In my opinion, the epicentre of the Kuala Lumpur City Centre is the world class 50 acre KLCC Park. KLCC Park (across the road from Kirana Residence via a hotel car park) is the perfect antidote to the stress of city living. With its 1.3km jogging track, children’s playground and a 10,000 sqm water feature, the park is a handy green refuge for many KLCC residents. It is home to approximately 1900 indigenous trees and 66 species of palms.

At night, the park comes alive with the magical sights and sounds from a 18 meter high musical water fountain, directly in front of Suria KLCC mall and Petronas Twin Towers.

Kirana Residence while not literally at the doorsteps of KLCC Park, it's as near as possible -a short 100m away, separated by a car park driveway.

Kirana is also just 3 minutes walk to one of KL's top 10 malls, KLCC Suria. Many fine dining establishments are close by. And it's just a brisk 13 minutes walk for Kirana residents along an air-conditioned pedestrian walkway to another top 10 KL mall, Pavilion Shopping Centre.

In comparison, YOO8 residents will need to use an overhead pedestrian link bridge from the Banyan Tree hotel to reach the Pavilion mall and take a much longer route to KLCC Suria.

And while you can’t see KL’s iconic Petronas Twin Towers (PTT) from each unit, you can always take your guests up to the 22F pool deck and show them a 360 view of the gorgeous KL skyline and of course the PTT.

Kirana has an X Factor - graceful wrap around balconies that curve gently and serve a useful function as a tropical sun shade. Kirana’s relatively large balconies are uncommon in the KLCC. Most balconies in KLCC condos are tiny, barely able to squeeze in a sun lounger or a table and two chairs.

Without spacious balconies, heat from the afternoon sun means higher air-conditioning bills.

Kirana's 5* Amenities
“Exceptional Privacy” -Wth only 66 units and 9 full time staff, Kirana residents enjoy a level of service and privacy that is almost unrivalled amongst KLCC condominiums. Plus access to exceptional amenities residents of other KLCC condominiums can only dream of:

For example, a upmarket tapas restaurant (La Bodega is opening soon) literally at their doorsteps, a spa and sauna on the 22F, a choice of not one but two pools (a rooftop pool on the 22F shared with Ascott KL @9 Jalan Pinang and another pool on 2F exclusively for Kirana residents and their guests), access to a tennis court (fees payable) and 24 hour concierge service.

In comparison, the two twisting YOO8 towers are high density with a total of more than 1000 units. Typical floor areas of units at YOO8 are much smaller, 700 SF up (1 bedroom)-1300sf (3 bedrooms) versus typical floor areas of 2200sf (2 bedrooms) and 3200sf (3 bedrooms) at Kirana.

“Exceptional Entertaining Options” -Rounding up the list of resort-like amenities for Kirana Residents are a private outdoor dining area for 16 guests equipped with cooking facilities that can be reserved exclusively for residents and their guests (note separate charges apply and a deposit is required), a covered cabana with a bar counter and bar stools that offers the perfect venue for residents to meet and enjoy refreshing cocktails.

Kirana's 2F pool deck has a wading pool and a main pool, surrounded by a sit out area equipped with sofas and tables big enough to accommodate 60 guests.

Post Script & Disclaimer
1 The sole penthouse on top of 8 Conlay’s hotel tower was recently sold for RM30m. This is not the most expensive penthouse sold in KL. That record is still held by a triplex unit at the Binjai that was sold for RM38m. But in RM per SF, 8 Conlay might, I think but cannot be 100% certain, be the most expensive in KL

2.I am an owner of a Kirana Residence unit since 2000. I previously served on the KiranaMC from 2010-2012. I am the creator of a blog on Kirana Residence, www.360KiranaResidence.com

3 I am not a real estate agent registered with the BOVEA. If you are considering buying a property in Malaysia you should consult a valuer or a real estate agent registered with the BOVEA.

4. According to a KSK marketing person, the air-conditioned walkway running from Jalan Pinang to Pavilion Shopping Centre will eventually be extended to 8 Conlay via the Conlay MRT station.

5. With interest rates on the rise, inflationary pressures pushing up building materials prices, and uncertainties in projecting demand, some developers are postponing project launches. I think but cannot be 100 % sure the construction site across the road from 8 Conlay is for a Pavilion extension. But there is no guarantee construction work might commence soon.

The Capsquare Residences & Cendana @ KLCC

Webspeed — Mon, 08 Aug 2022 11:33:18 +0800

Can you buy freehold KL condominiums near MRT or monorail stations under RM500 PSF? My ever cheerful auction agent J has just Whatsapped me not one but two auction properties going under the hammer for less than RM500 PSF.

The Capsquare Residences - According to PropertyGuru, the “Capsquare (developed by Bandar Raya Development Berhad ) is part of a bigger development, Capital Square Development. The Capsquare Residences is located at Jalan Dang Wangi, Kuala Lumpur.

Because this condominium is located in the city centre, there are a lot of public amenities close to it. Thus, residents of The Capsquare Residences have easy access to a lot of facilities in their vicinity. The amenities situated in the area where The Capsquare Residences is located include ATMs, schools and other facilities.

Residents of this condominium will not have to bother about meeting their entertainment and leisure needs appropriately. There are several entertainment and leisure centres located close to this property. One of such entertainment and shopping centres is the CapSquare Centre which holds a number of entertainment and shopping options. The nearby Asian Heritage Row still holds options for relaxation, dining and leisure. Other shopping and entertainment facilities close to The Capsquare Residences include Suria KLCC, Pertama Complex, Avenue K, Campbell Complex, Sogo and Semua House.

Because of the location of this condominium in a well-established urban area, there are more facilities than is commonplace in most areas.”

Cendana Condominium -According to Malaysia's #1 property search portal, “the Cendana is a luxury condominium targeting high-end tenants looking for a classy, modern design that makes it so beautiful that nearly everyone would feel proud to call it home. Better still, people who reside in this condo enjoy access to a full range of basic condo facilities. It’s a convenient home for expatriates who work in Kuala Lumpur City and don’t have private means of transport as there are various public transport options (bus stops, taxi stands and LRT and Monorail stations) in the neighborhood. Although previously some people previously shied from staying in this property due to Malay cemetery views, that’ll no longer be an issue soon as an upcoming property in the vicinity (Crest Luxury Residences) will block the views entirely once it’s complete. Shopping shouldn’t be a concern to the residents of KLCC Cendana Luxury Condominium because KLCC, a host of many shopping options, is just nearby. KLCC Cendana Luxury Condominium provides its residents with a wide range of facilities. They include a sky bridge which links it to Renaissance Hotel, lap pool(24 metre), sauna, spa, clubhouse, playgrounds, tennis courts, barbecue area, restaurant, launderette, F&B outlets covered car park equipped with car lift facilities, modern and fully equipped gym, cafeteria. Additionally, the property offers 24-hour security for the peace of mind of its occupants.”

Disclaimer

I am not a registered real estate agent with BOVEA. If you are considering buying a auction property you should consult a BOVEA registered valuer or real estate agent.

For my previous KL Auction Property Market Updates, check out my property blog 360 KLCC - “Insights Perspective & Analysis for the KL property market”.

Are Branded Residences Worth 5x Luxury Condos

Webspeed — Fri, 05 Aug 2022 07:20:39 +0800

Recently, I was at KSK Land's 8 Conlay showroom to learn at first hand more about marketing KL Branded Serviced Residences.

8 Conlay is the maiden mixed use property development project by KSK group (which has its roots in insurance). “With three skyline-altering towers ranging from 56 to 68 storeys in height, 8 Conlay is a development in a class of its own. Designed by RSP, a leading Malaysian architecture firm, this one-of-a-kind development in the centre of Kuala Lumpur features spectacular (twisting twin towers) branded YOO8 residences serviced by Kempinski, and lifestyle retail quarters that embody bespoke living at its best.” source : KSK Land's website.

Tower A of YOO8 is currently 80% sold, while Tower B is about 40% sold. 60% of 8 Conlay's YOO8 buyers are reportedly foreigners. Tower A with interiors by Steve Leung is scheduled for completion in early 2023, Tower B (interiors by Kelly Hoppen) in end 2023. The 5* hotel by Kempinski is slated to open later in the first half of 2024. But a marketing person at KSK said a soft opening for the hotel might be as early as late 2023.

Completion of the 8 Conlay project was originally targeted for 2020 but was pushed back because of the start of MCO. KSK Land replaced it's main contractor with Grand Dynamic Builders Sdn Bhd, a subsidiary of a KLSE listed company in October 2020.

At prices ( after rebates and discounts are applied) that range from RM3200-3400 PSF and up, YOO8 is priced nearly 6 times the price of a freehold 3842sf four bedroom unit at Kirana Residence that was up for its 4th auction at RM569 psf on 8 July. Kirana Residence is a luxury condominium that Malaysia's #1 property search portal says is the epitome of a KLCC Luxury Condominium : “…..precise definition of a luxury condominium. Everything you need for a modern lifestyle is a hop, skip and a jump from your doorstep”

YOO8 USPs & X Factor

According to a AVP in marketing at KSK, what makes the two YOO8 residential towers unique and iconic are their:

Branding ( with 5* hotel services provided by Kempinski, tagged as “Serviced By Kempinski" and fully furnished interiors by world famous designers, Steve Leung and Kelly Hoppen)

Twisting twin towers design,

Nice views of the KL skyline (mostly at Tower B, some units of Tower A face Tower B because of the twisting design),

Close association with the Kempinski KL 5* hotel and

Proximity to a luxe retail podium block. KL's biggest premium shopping centre, Pavilion mall , is just a 3 minutes walk away (via the pedestrian link bridge from Banyan Tree Hotel )

Connectivity - a direct link to Conlay MRT is pencilled in. When completed 8 Conlay residents will be able to get to most KL's retail and commercial buildings easily.

8 Conlay's e-marketing brochure says the YOO8 Branded Serviced Residences are “in the centre of Kuala Lumpur”. But in my opinion, they are actually much further away from the epicenter of the Kuala Lumpur City Centre (KLCC), represented by KLCC Park than my 5* KLCC luxury condominium at 7 Jalan Pinang, Kirana Residence.

I think YOO8's X Factor is its Water Lounge located on the 26F which has the following facilities :

Gymnasium

Landscape Garden

Changing Room

Toilet

Kids Area

Pond

Pool Deck

Reflection Pool

YOO8's 5* “Serviced By Kempenski” Services & Amenities

The 5* Kempinski Hotel Kuala Lumpur is only scheduled to open in 2024. If assuming the 2023 date for Vacant Possession (VP) is as promised, YOO8 buyers still won't be able to enjoy the full range of 5* hotel services until the Kempinski hotel and restaurants in the 4 storey retail podium open.

YOO8 amenities are mainly located on the 26F and 44F and comprise a gym, a Water Lounge (ripple pools), a Green Refuge (landscaped gardens), a Multi Purpose Room, a Chill Out Room, a Lounge Room and a Games Room.

Kirana's USPs & X FACTOR

In my opinion, the epicentre of the Kuala Lumpur City Centre is the world class 50 acre KLCC Park. KLCC Park (across the road from Kirana Residence via a hotel car park) is the perfect antidote to the stress of city living. With its 1.3km jogging track, children’s playground and a 10,000 sqm water feature, the park is a handy green refuge for many KLCC residents. It is home to approximately 1900 indigenous trees and 66 species of palms.

At night, the park comes alive with the magical sights and sounds from a 18 meter high musical water fountain, directly in front of Suria KLCC mall and Petronas Twin Towers.

Kirana Residence while not literally at the doorsteps of KLCC Park, it's as near as possible -a short 100m away, separated by a car park driveway.

Kirana is also just 3 minutes walk to one of KL's top 10 malls, KLCC Suria. Many fine dining establishments are close by. And it's just a brisk 13 minutes walk for Kirana residents along an air-conditioned pedestrian walkway to another top 10 KL mall, Pavilion Shopping Centre.

In comparison, YOO8 residents will need to use an overhead pedestrian link bridge from the Banyan Tree hotel to reach the Pavilion mall and take a much longer route to KLCC Suria.

And while you can’t see KL’s iconic Petronas Twin Towers (PTT) from each unit, you can always take your guests up to the 22F pool deck and show them a 360 view of the gorgeous KL skyline and of course the PTT.

Without spacious balconies, heat from the afternoon sun means higher air-conditioning bills.

Kirana's 5* Amenities

“Exceptional Privacy” -Wth only 66 units and 9 full time staff, Kirana residents enjoy a level of service and privacy that is almost unrivalled amongst KLCC condominiums. Plus access to exceptional amenities residents of other KLCC condominiums can only dream of:

For example, a upmarket tapas restaurant (La Bodega is opening soon) literally at their doorsteps, a spa and sauna on the 22F, a choice of not one but two pools (a rooftop pool on the 22F shared with Ascott KL @9 Jalan Pinang and another pool on 2F exclusively for Kirana residents and their guests), access to a tennis court (fees payable) and 24 hour concierge service.

In comparison, the two twisting YOO8 towers are high density with a total of more than 1000 units. Typical floor areas of units at YOO8 are much smaller, 700 SF up (1 bedroom)-1300sf (3 bedrooms) versus typical floor areas of 2200sf (2 bedrooms) and 3200sf (3 bedrooms) at Kirana.

“Exceptional Entertaining Options” -Rounding up the list of resort-like amenities for Kirana Residents are a private outdoor dining area for 16 guests equipped with cooking facilities that can be reserved exclusively for residents and their guests (note separate charges apply and a deposit is required), a covered cabana with a bar counter and bar stools that offers the perfect venue for residents to meet and enjoy refreshing cocktails.

Kirana's 2F pool deck has a wading pool and a main pool, surrounded by a sit out area equipped with sofas and tables big enough to accommodate 60 guests.

Recent Transactions

Tower A (564 units) of YOO8 was first marketed in 2015 at prices of around RM3000+ PSF. By November 2016, KSK Land reported 70% of Tower A had been sold. As at 2022, the 62 storey Tower A is 80% sold. With 60% of Tower B (468 units) still unsold as at June 2022, KSK Land has kept its pricing unchanged.

But it is worth noting prices of comparative size units at the Branded Serviced Residences at Ritz Carlton have actually fallen over the past 5 years. The one bedroom units at Ritz Carlton at around 1000sf are much bigger than the one bedroom units (about 700sf) at YOO8. Over the past 5 years, prices of one bedroom units at Ritz Carlton reached a high of RM3000 PSF . But prices of one bedroom units at Ritz Carlton have since tumbled by around 25% to around RM2140 PSF as at 1H 2022 according to PropertyGuru's Pricing Insights charts.

At Kirana there is only a single one bedroom unit. The standard units are two bedrooms (2,200 SF up), three bedrooms (3200 SF up) and four bedrooms (3650 SF up) and penthouse units of 5000+ SF up. Two bedroom unit prices have declined 20% in the past 5 years reaching a low of just under RM800 PSF but have recovered by 10% to RM880 PSF in 1H 2022

Post Script & Disclaimer

1 The sole penthouse on top of 8 Conlay’s hotel tower was recently sold for RM30m. This is not the most expensive penthouse sold in KL. That record is still held by a triplex unit at the Binjai that was sold for RM38m. But in RM per SF, 8 Conlay might, I think but cannot be 100% certain, be the most expensive in KL

2.I am an owner of a Kirana Residence unit since 2000. I previously served on the Kirana MC from 2010-2012. I am the creator of a blog on Kirana Residence - see my URL

3 I am not a real estate agent registered with the BOVEA. If you are considering buying a property in Malaysia you should consult a valuer or a real estate agent registered with the BOVEA.

4. According to a KSK marketing person, the air-conditioned walkway running from Jalan Pinang to Pavilion Shopping Centre will eventually be extended to 8 Conlay via the Conlay MRT station.

5. With interest rates on the rise, inflationary pressures pushing up building materials prices, and uncertainties in projecting demand, some developers are postponing project launches. I think but cannot be 100 % sure the construction site across the road from 8 Conlay is for a Pavilion extension. But there is no guarantee construction work might commence soon.

FTHBs should buy SubSale or New Project Properties

Webspeed — Fri, 05 Aug 2022 06:52:26 +0800

“Probably you already save your money and feel excited to buy your first house? While doing your research on what type of house to buy, this infographic may give you some better ideas on choosing between new house (purchase directly from the property developer) and subsale house (purchase directly from the house owner).” Source Hartamas Notes biweekly newsletter.

🤠's Dua Sen:

Those nice folks at Hartamas Real Estate have produced an interesting infographic on whether First Time Home Buyers (FTHBs) should consider New Property Projects or Sub Sale Properties.

When property sales are sluggish because the property market is in the doldrums, you don't need a real estate agent to buy New Projects properties from developers. The proof? I got a 10% "discount from list price" from a developer when I bought my first 5* KLCC luxury condominium in 2000. No real estate agent required.

For more information on how to find free current market valuesfor any property, how to discover USPs (unique selling propositions), get Walkability Scores and find 5 year property transactions prices and rentals PSF (from PropertyGuru's free Pricing Insights charts), FTHBs should check out my property blog 360 KLCC. Free Insights, Analysis and Perspective for the KL high end property market. Go to my URL at 360KiranaResidence Dot Com, and click on the Menu Bar to access 360 KLCC.

To date, there are 580 sick housing developments in Malaysia, out of 2,552 launched residential projects. This means the fates of nearly 23% of Malaysian homebuyers are in the hands of errant property development companies, including those owned by the government. Is it not better to buy a completed property where what you see is what you get? Instead of an off plan or New Project property that has a risk of non completion.

Should Putrajaya bail out contractors?

Webspeed — Wed, 03 Aug 2022 16:01:16 +0800

A property developer succinctly explained to yours truly the dilemma the private sector industry faces when building materials costs shoot up:

“During the 2008 crisis, cement and steel prices shot up. Our main con came back to renegotiate. It was a question of continuing with him with higher prices or terminate and get someone new at higher prices. Either way we were stuck with higher prices. I am not surprised many developers will have same issue today.

Our lesson then was to have a price fluctuations clause so that if the actual was higher, we pay or if lower, the contractor gave discount. As developer you are caught in the middle with LAD to house buyers on one end and higher prices to contractor on the other end. Is the construction contract worth the paper it is written during crisis? You should do a survey. “

Ok. I get it VOP clauses actually make economic sense for the private sector. But when Putrajaya decides to allow VOPs AFTER fixed price building contracts for government buildings have been already signed to protect contractors' profit margins, who is the loser? By agreeing to absorb some of the price increases, the government pays more money for its buildings. It's the taxpayers who lose out.

In my opinion Putrajaya should not knuckle down to their main cons. By agreeing, the government is setting up itself along a slippery slope. Why?

Now the flood gates are open to other government suppliers eg pharmaceutical companies to demand VOPs too AFTER raw materials price increases due to inflation, supply chain snafus, the Russian Ukraine conflict, global warming, and (+insert here another reason you can dredge up). Where will it end?

What do YOU (assuming you are the 16% of the working population that pays taxes) think?

https://pictr.com/images/2022/08/03/B3gZNg.md.jpg

The elephant in the room

Webspeed — Wed, 03 Aug 2022 15:51:55 +0800

EdgeProp's article quotes Au Foong Yee : “....buying a property is not just about its usage and obvious functionality. The end-game of any property investment is its capital appreciation. And many have discovered the value growth of a piece of real estate is not based only on its location and its developer’s strong track record. Whether or not a building has been designed and built for sustainable maintenance and the quality of its upkeep are equally important, if not more.”

Well yours truly 🤠 like the Edge's former chief editor Ms Au also believes the "end game of any property investment is its capital appreciation". As a former committee member of some KLCC condominiums, I also believe that as buildings age, good property management is key to keeping tenants.
But you see there is the elephant in the room that nobody ( I mean real estate agents and especially high end property developers keen to sell you their Branded Serviced Residences) wants to talk about:

Few 5* or 4* luxury condominiums in KLCC (no matter how good their property management teams are) have seen any real capital appreciation over the past 5-10 years.

Don't just take my word for the above.

Do your own empirical research. Check out PropertyGuru Pricing Insights charts for any 5* luxury condominium within 100 metres of the epicenter of the Kuala Lumpur City Centre (KLCC), ie KLCC Park.

https://pictr.com/images/2022/08/03/B3gBzU.md.jpg

Is The Property Market Really Recovering?

Webspeed — Wed, 03 Aug 2022 10:59:42 +0800

Based on a survey of its real estate agents, Juwai IQI’s CEO says a recovery is imminent in the next 12 months. Elsewhere, Knight Frank Malaysia also expects prices of residential properties to rise. Ceteris paribus, I expect real estate professionals to be optimistic about the property market. Otherwise who will buy property?

But are the prospects for a broad based market rally really there ? If Bolehland follows the US into recession next year, perhaps the property market might NOT see a rally but a dead cat bounce?
Based on anecdotal evidence from lackluster auctions of 5* luxury condominiums, high end property investors are still waiting for prices to fall further. Many 5* condominium auctions have no bidders at 2nd and 3rd outings.

The Triple Whammy
Buying interest has returned for the affordable landed terrace houses market. But as anecdotal evidence from property auctions of 5* condominiums in KL indicate , sentiment towards the high end property segment is still fragile: Just Google “Lelong KLCC condo “

Foreign property investors from China and Red Dot Island that used to account for the bulk of sales of Branded Residences in the range of RM1,500 to RM3,000 psf are staying away, spooked by the fall in the Ringgit and lacklustre rentals in areas like KLCC that are dependent on a dwindling expat pool of tenants.

Some high end property developers of Branded Residences and 5* luxury condominiums without deep financial pockets will face strong headwinds due to a “Perfect Storm” in 2023 :

1. rising interest rates (resulting in greater financing costs),

2.higher building materials costs (due to inflationary pressures worldwide) and

3.a drop in housing mortgage demand for luxury apartments (leading to dwindling buyers for their unsold inventory).

BURSA Malaysia Securities Bhd has just placed Penang based Ivory Properties Group Bhd under the Practice Note No 17 (PN17) category of financially troubled companies. Will there be more developers joining the list of PN17 group of listed companies in 2023?

Will any nascent property market recovery be snuffed out if the economy turns south, ie turn out to be a dead cat bounce? The US looks like it's already in a recession by some yardsticks , e.g. two consecutive quarters of negative GDP growth. See Bloomberg's "Is the US in a recession?”

Will Chinese property investors turn towards Malaysia because of growing woes in the China property market? Many Chinese home buyers are not paying their loan installments because developers have stopped construction. There are reports that home buyers in 86 cities are defaulting on their loans.

In a previous post at my property blog 360 KLCC I looked at the EverGrande crisis in China and it's possible impact on China's economy should the world's most indebted developer be allowed to be liquidated. See also Financial Times's infographics driven YouTube explanation of the EverGrande crisis's origins in “EverGrande: The end of China's property boom”.

https://pictr.com/images/2022/08/03/B3Zx5f.md.jpg

“Are Properties Near MRT Stations Worth More?” Par

Webspeed — Tue, 02 Aug 2022 13:22:53 +0800

Disregard the hype: buyers won’t pay hefty premiums for property near MRT stations

Here's why KL isn't like Hong Kong where there are in fact price premiums for flats near MTR stations.

Unlike KL, in Hong Kong most people use public transport to get to work, from shop girls to Managing Directors of banks. Few people drive to work, even if they own cars. That"s because the city has an efficient and affordable public transportation network. At peak hours the MTR trains run at 2 minutes intervals.

But over in Bolehland the frequency that MTR trains run has been reduced to 7 minutes. Result : Lots of complaints by MTR users in KL about the frequency trains run according to a news portal.

Here's yet another reason why I think properties within walking distance of MTR stations aren't going to see any significant price premium. A 2017 study by Urbanmetry's Cha Ly Koh found the median price premium of properties located within 500 metres to completed MTR Stations was 1%.

I think but cannot be 100% sure the reason is most people in the Klang Valley do not use the MTR to get to work is they prefer to drive. See my 360 KLCC post :

"Are KLCC condos near malls worth more?"

Also having a first class MTR network does no good unless reliable and cheap First Mile Last Mile connections are also in place. KL still has a lot of work to improve FMLM connectivity issues.

The percentage of people who use public transport in Klang Valley sits at around 20 percent. The previous government aimed to get 40 percent of citizens to use public transport by 2020. The current government now hopes to achieve that by 2030. Will it succeed? What do you think ?

In my opinion Malaysians are not going to ditch their cars in favour of taking public transportation to work any time soon. Why? Putrajaya seems anxious to hang on to the votes of vehicle owners by ensuring every one of the 15 million+ registered vehicle owners gets access to heavily subsidised petrol.

Now it's worth pointing out our neighbors, the Indonesians and Thais do not subsidise petrol for THEIR drivers. That's because I think but cannot be 100% sure there isn't a ghost of a chance the opposition there will win any general elections.

Take away the petrol subsidy and maybe there's a chance MTR ridership will increase. But I won't be holding my breath this is going to happen soon.

Maybe after the next GE? 🤠

360 KLCC property blog

Webspeed — Tue, 02 Aug 2022 11:18:28 +0800

Hi folks, Greetings from Penang 🤠

Last August I started a blog to share my 20+ years experience as a KLCC landlord and long term property investor.

As the moderator does not allow a direct URL link you can find my blog by Googling 360 Kirana Residence Dot Com. Then select 360 KLCC from the drop down menu bar.

As a blogger I am to cover topics that I think but cannot be 100% sure will be interesting to fellow property investors. Samples:

Are KLCC 5* condominiums effective hedges against inflation ?
Are conveyancing lawyers necessary?
How to evaluate seafront property investments
Are Properties Near MTR Stations Worth More?
Marketing Serviced Residences
Is The KL High End Condo Market In Big Trouble?
"Lies, Damn Lies & Statistics"
Interest Rates And Mortgage Demand
Renting Investment Properties
"A Perfect Storm?"

Unlike other property bloggers I take an "evidence based" approach to writing about property. So I include hyperlinks to my source articles in major property portals, YouTube videos, property transactions prices and rentals graphs from PropertyGuru's Pricing Insights charts and EdgeProp Analytics and academic research papers.

https://pictr.com/images/2022/08/02/B2srw5.md.jpg