News & Articles Luxury condo demand falling
Luxury condo demand falling
27 Aug 2014
PETALING JAYA, Aug 27:
Local demand for high-end condominiums is expected to weaken within the next 12 months, primarily in the Kuala Lumpur City Centre (KLCC) area, with more developers anticipated to tap foreign markets.
Jones Lang Wootton executive director Malathi Thevendren said the projection is based on the mismatch in the level of pricing by developers with local affordability.
"Supply, coming in, must match the demand level as there are not many people who can actually afford to buy the high-end condominiums.
"Some developers are even holding back their launches... (as) they know there's no market," she said the sidelines of the 17th National Housing and Property Summit 2014 here today.
Malathi is a member of the Royal Institution of Chartered Surveyors and Registered Valuer and Estate Agents with the Board of Valuers, Appraisers and Estate Agent, Malaysia.
She has more than 25 years experience in real estate professional services. and was a speaker at the two-day summit organised by the Asian Strategy and Leadership Institute (ASLI).
For affordable condominiums, Malathi said demand will see steady growth with young couples and professionals continuing to drive the market.
"People's preferences are still for landed residential properties. But because house prices have escalated over the past two to three years and way beyond the affordability level, many can't afford to own such landed property."
She noted that market prices of most existing high-end condominiums are expected to be stable over the short-term, while prices of low to medium-end condominiums at more popular locations, may see some appreciation.
For new launches, prices are likely to increase in line with inflation and construction costs for labour, utility and new materials.
On supply, Malathi said it would see moderate growth with infrastructure, transportation improvements and condominium acceptance areas further from the city.
"With the expected slower demand and cost increases, developers are expected to maintain unit quantum prices, while reducing built up areas.
"Going forward, creating a sustainable property market, as well as the mismatch in supply and demand, will be among the challenges for the industry."
Local demand for high-end condominiums is expected to weaken within the next 12 months, primarily in the Kuala Lumpur City Centre (KLCC) area, with more developers anticipated to tap foreign markets.
Jones Lang Wootton executive director Malathi Thevendren said the projection is based on the mismatch in the level of pricing by developers with local affordability.
"Supply, coming in, must match the demand level as there are not many people who can actually afford to buy the high-end condominiums.
"Some developers are even holding back their launches... (as) they know there's no market," she said the sidelines of the 17th National Housing and Property Summit 2014 here today.
Malathi is a member of the Royal Institution of Chartered Surveyors and Registered Valuer and Estate Agents with the Board of Valuers, Appraisers and Estate Agent, Malaysia.
She has more than 25 years experience in real estate professional services. and was a speaker at the two-day summit organised by the Asian Strategy and Leadership Institute (ASLI).
For affordable condominiums, Malathi said demand will see steady growth with young couples and professionals continuing to drive the market.
"People's preferences are still for landed residential properties. But because house prices have escalated over the past two to three years and way beyond the affordability level, many can't afford to own such landed property."
She noted that market prices of most existing high-end condominiums are expected to be stable over the short-term, while prices of low to medium-end condominiums at more popular locations, may see some appreciation.
For new launches, prices are likely to increase in line with inflation and construction costs for labour, utility and new materials.
On supply, Malathi said it would see moderate growth with infrastructure, transportation improvements and condominium acceptance areas further from the city.
"With the expected slower demand and cost increases, developers are expected to maintain unit quantum prices, while reducing built up areas.
"Going forward, creating a sustainable property market, as well as the mismatch in supply and demand, will be among the challenges for the industry."
Source: The Rakyat Post