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ASKING prices dropping. Still HIGHER than transacted value.

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Someone told me recently that they could not sell their properties at market price anymore. Prices are dropping. I told him that if we intend to sell, better be serious and really sell it as soon as possible so that we could take advantage of the buyers’ market today, as a buyer lah. Earlier article here. Selling your home faster By the way, market price is NOT the price we see in property listing sites yeah. Those are intended selling price, need not be and usually not the actual transacted price. Buyers are spoilt for choice today and unless that property is in a premium area where supply is in shortage, then the original listed price will have to be trimmed until a buyer calls. In fact, putting that price too high and one gets no call at all. Let’s look at some numbers.

Article in theedgemarkets.com Amy Wong, Savills Malaysia director of research and consultancy said, “According to the samples of our research analysis, the transaction volume of high-rise residences in the secondary market dropped in both KL and Selangor in 2018 compared with 2017. KL recorded only half of the total transaction volume compared to the previous year.” She shared that the transacted value was flat in KLCC, Bangsar and Mont’ Kiara in 4Q2018. (Note two important things. Transactions are down, meaning interest to buy may be lower or buyers did not want to pay the price owner wanted. However, the actual transactions in KLCC, Bangsar and Mont’ Kiara showed prices remain almost the same! Hopefully we understand now, it’s SENTIMENT and not fundamental issues like a crisis or a bubble bursting)

Further analysis from Savills Malaysia as follows:

Average asking price in these three zones (KLCC, Bangsar and Mont’ Kiara ) dropped about 3% quarter on quarter in 4Q2018, although it was still 10% to 15% higher than the average transacted value.

Prices ranged from RM830 to RM1,810 psf in KLCC, from RM750 to RM1,200 psf in Bangsar and from RM610 to RM700 psf in Mont’Kiara.

Fewer secondary transactions were recorded in KLCC after GE14.

Secondary market in KLCC is still inclined towards the bigger units of more than 1,500 sq ft. These accounted for over half the secondary market transactions last year.

“The prospects for high-rise residential properties in KLCC remain challenging. With over 6,000 units of new supply scheduled for completion in KLCC by 2020, there is unlikely to be an upswing in market activity and pricing in the near term.”

In Bangsar, “Units of between 1,000 and 1,499 sq ft remained popular in the area, accounting for 30% of secondary market transactions last year. As for capital value, high-rise residential properties remained stable year on year.”

Mont’Kiara’s secondary market saw more activity last year despite experiencing lower transaction volume. More than 60% secondary transactions last year consisted of high-rises of 1,500 sq ft and above in size.

The article in edgeprop.my is a much longer one and has many specific information about launches in KL and Selangor too. Please refer yeah. Article in theedgemarkets.com

If we want to know whether the property market is actually in trouble or not, do not look at the usually not so popular areas and point out that the asking prices are dropping by so much etc. We should also stop asking our friends who has yet to own a property whether prices are too high. It’s best to keep following articles where actual transacted prices are revealed and look at the usually popular areas because they will reflect the actual demand vs supply (buyer vs owner). We can keep saying it’s the buyers’ market but this depends very much on the owners ability to hold on and demand. Stop waiting. Start identifying. Sometimes, that area that everyone wants will never fall to the price we want. If we ‘die-die’ must buy that area, waiting until the market becomes hot again is suicidal where prices are concerned.

Secondly, larger sized units will always be a premium because prices are getting ever more expensive. Not many developer will build big units because the final price is likely to be super high. They will only build smaller units and this will explain why prices for larger units will get stronger with passing time. There’s little need to even debate on landed versus high-rise. Just buy the one you like. Look at the newest landed properties and the actual built-up in sq ft. Anything above 2,000 sq ft was many year ago. These days, it’s usually below 2,000 sq ft already. In the near future? 😛 Happy understanding.

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<Featured Image is courtesy of Stock Photos from Andrii Yalanskyi>

Article written and edited by Charles. News article summarised by Dina Batrisyia.

written on 10 April 2019

Next suggested article:  13 things to check before buying a secondary unit

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