Price is an issue. 2 choices; Distance vs Size.
It’s important to note that the Malaysian property market is not under the ‘advanced’ category. Advanced property market would definitely refer to those in advanced nations such Australia… think Melbourne and Sydney and to a lesser extent, Perth. It’s also London in the UK, closer to home we have Singapore and the top few in Asia includes Hong Kong, Tokyo and Shanghai. What can we learn from these places is this. It’s always a choice between distance and size.
Where do property prices rise first?
A home which is within the central business district (CBD) will always start to become expensive. People would then buy a little further from the CBD. As the CBD got even more expensive, these places near CBD will also get more expensive and people buy even further away. This is also why the term called suburb came about. This is also why there are today many huge townships away from the KL city centre as well. Of course, it does not have to be further away yeah. We just need to manage our size expectations.
What if KLCC and Rawang is the same price?
If KLCC and Rawang is the same price, then I would personally buy into KLCC instead. However, if we look at many of the studies, Rawang has shown that it has also become a property choice too. The reason is back to distance and size. When one prefers size instead. Say, a double-storey terraced home at lower than RM500,000. How many cars can a double-storey home park? Here’s that earlier article. By the way, a typical landed home can still park two cars. If it’s a small-sized highrise unit, then the car park space is likely to be just one (1).
What if we insist to stay in KLCC?
If we try to use the same amount of money to buy a home within KLCC or very near to KLCC, then this RM500,000 is likely to give us only a few hundred square feet. Lesser than 500 sq ft. Let’s just safely conclude that this home is not likely to be a new property too. We may have to buy some units which are older instead. The reason is because of the price per sq ft is already many times higher in KLCC vs Rawang currently. Thus a 350 sq ft place at RM1,500 per sq ft would already be over RM500,000. There are properties which are even more expensive than RM1,500 per sq ft.
Stay in KLCC or stay in a home with KLCC view?
When we look at the market in general, most buyers / renters will have to base their decisions on price. Well, except for those who could afford anywhere they want. Else, how much we earn on a monthly basis determines where we could afford to buy and stay. Want to stay next to KLCC? Be a successful businessman. Alternatively be a senior manager of a Multinational organisation. Else, go for KLCC VIEW instead… (the further we are away from this view, the cheaper it will be too)
It’s the same everywhere, price determines the distance and size
Developers are forced to build and price the properties at the lowest possible price. Land cost is not on their side when they buy the land parcels nearby KLCC today. This is why we do see some projects having thousands of units because they just have to make it affordable. Imagine a Gross Development Value of RM1 billion and 1,000 units? They have to sell at RM1 million per unit. If they could build 2,000 units with the same GDV, they could price it at RM500,000 per unit. If they build 3,000 units instead?! It’s now RM333,333 per unit.
We will never be used to any units below 350 sq ft.
In Hong Kong, the typical unit size could be as small as 150 sq ft. In Malaysia, even for someone who’s single, I do not think we are at the stage where we could accept anything below 350 sq ft easily. However, all these would continue to be determined by price pressure. At this moment, there’s none. Everyone’s too busy staying home currently. Happy choosing between distance and size for that home sweet home which we could afford once we could move around again. Take care and stay safe.
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