First of all, thanks to Michael Geh, Senior Partner from Raine & Horne, we have the two charts used today.
The average property transaction price in KL is RM673,000 in 2013. Yet, we do not find that many properties around this price. In 2012, the total transactions for properties priced between RM250,001 – RM500,000 was 18%. This was 4 times lower than the transactions for RM0 – RM250,000. In 2013, this has grown to 27% or only half of the transactions for RM0-RM250,000. Looking at the property launches thus far, I think we are seeing the shifting of the % even further skewed towards the RM250,001 – RM500,000 category, at least for next few years. The reason is simple, DEMAND is there but the affordability remains an issue which is holding back the transactions. This is more for primary. In terms of secondary, due to the uncertainty at this particular moment, there are still people who are thinking if they should buy now. Some are even awaiting for property prices to drop!
What would happen to the chart in 2014? I have no access to any data yet but if all the readings, launches, predictions that I read everyday everywhere is to be taken into account, including all the new affordable schemes by both the federal and state governments, I can see the the % for RM250,001 – RM500,000 will soon form the majority of all transactions. What does this mean for those who are looking for secondary properties? Well, if you are in search of your first home and needs a roof over your head, you should be more serious. No, I am not talking about the primary properties which are being launched at locations which you think is even further than those secondary ones. I am talking about secondary properties in a less attractive location that you can accept by changing your lifestyle a bit. Anyway, after a while, you would not even notice this change.
3 weeks ago, I decided to start waking up at 6am and go to a gym near my office for a workout before starting work at 830am. It was not solely due to health. It was also because I would soon be moving to a ‘lesser attractive’ area called Damansara Damai and I do not want to only change then. I would like to get used to this new lifestyle which thus far has been superb. Oh yeah, I have no idea if Damansara Damai would ever become Mont Kiara or Bangsar but just fyi, I bought my condo at just RM300 psf. (Fully renovated and partially furnished). Let’s not talk about RM700psf. Let’s talk about just RM420 psf within 5 years? Haha. I think you get what I am trying to imply. Oh yeah, OSK’s townhouses within minutes from my current place is close to RM1 million and fully sold out.
So, in 2014 and perhaps for a few years, I seriously hope the % of transactions for RM250,001 – RM500,000 would continue increasing because as much as people wants affordable properties, it is already impossible to build a decent apartment with some facilities for below RM250,000 / unit of 1,000sf. (This one, every developer whom I know told me.) The material, land, labour cost is just much higher these days.
written on 4 April 2014
Next suggested article: Are buyers really desperate?