There’s no property price increase in Kuala Lumpur property market, correct? Actually, quite true. There’s barely any movement based on latest numbers.
Well, according to Knight Frank’s Prime Global Cities Index for 3Q 2020, Kuala Lumpur is nowhere to be seen anywhere within the top 20. It’s not just us, our friendly neighbour Singapore is also out of top 20 as well. I consider this as good news for many buyers who wanted to enter the property market but has yet to take any action. As for the full article with more information and even the top 20 chart, let’s look below.
Report by Knight Frank in knightfrank.com (click here to view full report) Let’s just run through three super easy to understand images too.
Figure 1 shows that property price increase has continued to register positive annual growth. This is an index aggregate for 45 cities. In other words, some cities are show a positive growth while others show negative but on an aggregate basis, the number is a positive one. Please do note that this positive number is at the lowest point if we compare this over all the different quarters all the way back to beginning of 2018. Please do not be too positive yet. Let’s look at Fig 2 after this Fig 1 image.
We could see that the number of cities with an annual increase in price is still bigger than the cities showing a decline in prices. However, if we look at the trend, the number of cities showing a decline in price for many different reasons are increasing. So, where is Kuala Lumpur then since it’s not within the top 20? Please do refer to the two other images to follow.
This image shows the top 20 cities with prime property price growth:
Kuala Lumpur and Singapore belong to the bottom half. Please refer to below image:
Good news for buyers who did not enter the market, yet.
As we could see very clearly, Kuala Lumpur has shown a drop of 3.6% versus the same quarter in 2019 and on a quarter on quarter basis, we are seeing a drop of 1.1%. If every quarter we drop by 1.1%, then on a yearly basis, we are going to drop higher than the 3.6% versus the same quarter a year ago. Anyone telling you that KL has property price increase may be telling about a very specific property versus the market.
Do note that Knight Frank says this is for prime properties. It does not include the ‘bread and butter’ properties for the most of the working professionals. Therefore, do not be too surprised if that property you were eyeing did not show any drop or may have shown a much bigger drop that what was shown in the image above.
Conclusion
Generally, the buyers of prime properties may also possess a stronger holding power as well. Thus, fluctuations in the property market due to some unforeseen circumstances such as the current COVID-19 pandemic is unlikely to affect them as much as someone who’s working for a monthly salary and may have had a temporary salary cut or even lost their jobs and is now looking for a new one.
Thus, the above charts are good for reference but do not think too much about it. At least now you know your rich friend was not lying when they tell you that the property price of their prime property has dropped recently. For the owners, are you now waiting for property price increase? Happy reading and understanding.
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