This article first appeared in City & Country, The Edge Malaysia Weekly on October 21, 2024 - October 27, 2024

The residential real estate sector in the Klang Valley showed promising trends during the second quarter of the year with residential loan applications and approvals increasing 7% and 6% respectively, compared with the same period in 2023, Savills Malaysia director of research and consultancy Fong Kean Hwa says in presenting The Edge Malaysia | Savills Klang Valley Residential Property Monitor 2Q2024.

“This reflects growing confidence in the real estate market, supported by Bank Negara Malaysia’s decision to maintain the overnight policy rate (OPR) at 3%, [as well as] confidence in economic growth and stable inflation,” he adds.

The Malaysian economy showed robust growth in 2Q2024 with a 5.9% increase in GDP compared with 4.2% in the previous quarter, marking the highest growth since 7.4% in 4Q2022, according to the Department of Statistics Malaysia.

The growth, Fong says, was fuelled by strong domestic demand, increased exports, household spending during the seasonal holidays and government cash aid from the Sumbangan Tunai Rahmah (STR) programme in April 2024. “Additionally, RM6.98 billion was withdrawn from the Employees Provident Fund’s (EPF) Account 3 (Flexible Account) by June 2024, further supporting consumer spending.”

He adds that foreign direct investment (FDI) continues to be a significant contributor to Malaysia’s economic landscape. “In 1Q2024, Malaysia attracted RM47 million in FDI, mainly in manufacturing (51.3%), the service sector (47%) and primary sector (1.7%).

“Malaysia’s strategic location, skilled workforce and solid infrastructure make it a favourable destination for FDI. The arrival of well-established companies may boost investor confidence, creating a positive business environment that could attract more knowledgeable investors; this would spark increasing interest in the high-end property market, particularly in areas such as Greater KL.”

The construction industry is also set to benefit from Malaysia’s digitalisation efforts and substantial infrastructure projects, Fong says. “Budget 2024 allocated RM90 billion for initiatives such as the Penang LRT, Pan Borneo Sabah Phase 1, MRT3, extensive flood mitigation projects, Sabah-Sarawak Link Road, Kuching Urban Transportation System-Green Line and water-related projects. The near completion of the LRT3 (which is reportedly about 91.68% completed) and plans to revive five additional LRT3 stations in Greater KL are expected to boost demand for transit-oriented development (TOD) and transit-adjacent development (TAD) projects.”

Meanwhile, regulatory changes are underway with the government considering a Real Property Development Bill to provide a more comprehensive framework for property regulation. “This will enhance the Housing Development (Control and Licensing) Act 1966, which governs only residential properties. The new regulations, along with the Urban Redevelopment Act, aim to stimulate investment and growth in the real estate market,” says Fong.

He notes that developers will likely pass on higher costs due to rationalised diesel subsidies and increased construction material costs, potentially raising new housing prices by 10% to 15%.

He also expects the growth in tourism to continue, driven by relaxed visa rules and favourable exchange rates, supporting short-term stay property investments and compact unit developments targeting tourists and investors. The first quarter this year saw tourist arrivals surge by 32.5% compared with the previous year.

The KLCC, Bangsar and Mont’Kiara markets remain challenging but are still vibrant in terms of price and rental rates, says Fong.

In Kuala Lumpur, the average prices of 2-bedroom units sampled in KLCC and Bangsar increased 1% and 2.1% y-o-y respectively, while prices in Mont’Kiara saw a 1.9% drop. Average rents of the sampled units in Bangsar and Mont’Kiara increased 3.3% respectively while those in KLCC decreased 2.5%.

Kuala Lumpur saw a number of high-rise project launches during the review quarter.

In the KLCC/Bukit Bintang area, Chin Hin Group launched Dawn KLCC, a serviced apartment project offering 492 units with built-ups from 550 to 835 sq ft and selling prices from RM1.27 million to RM1.97 million. The project is expected to be completed in 2028.

Exsim Group launched Hanaz Residence, also known as Kyliez Phase 2, in Jalan Mayang. The serviced apartment project comprises 270 units measuring 323 to 657 sq ft. Units are priced ranging from RM1.04 million to RM1.34 million and the project is expected to be completed in 2028.

Berjaya Time Square Sdn Bhd launched Time Square 2, comprising 629 units with built-ups of 488 to 1,038 sq ft. Units are priced from RM688,000 to RM2.64 million. The project is expected to be completed by 2027.

Pavilion Group launched Pavilion Square, a 67-storey high-rise residential project comprising 960 units with built-ups of 504 to 1,272 sq ft. Units are priced from RM1.8 million to RM2.9 million and the project is expected to be completed in 2027.

In other parts of KL, projects launched include The Atas Residence in Taman Desa by Maxim Global Bhd, comprising 624 condominium units ranging from 1,156 to 1,518 sq ft. The unit selling price ranges from RM808,000 to RM1.1 million and the project is expected to be completed by 2027.

Avaland Bhd launched Aetas Seputeh, comprising 126 units with built-ups ranging from 3,531 to 7,147 sq ft. The selling price ranges from RM3.28 million to RM6.89 million and the project is expected to be completed by 2028.

Malton Bhd launched Parc Green Pavilion Bukit Jalil, comprising 453 units with layouts ranging from 1,201 to 1,905 sq ft and prices ranging from RM1.32 million to RM2.17 million.

Sunway Property launched Sunway Velocity 3 in Jalan Peel, Cheras. The project, part of the Sunway Velocity masterplan development, comprises 1,604 units of serviced apartments with built-ups of 721 to 1,076 sq ft. The selling price is from RM516,509 to RM924,880 and the project is slated to be completed by 2028.

CPI Land Sdn Bhd unveiled its Tuan Heritag3 Residency in the Segambut area during the quarter. The project, which is slated to be completed in 2028, offers 1,269 units with sizes ranging from 820 to 1,026 sq ft and selling prices from RM511,400 to RM660,000.

Amira Residences by Cheras Hong Soon Development Sdn Bhd was launched during the review period. Located in Taman Batu View and next to MRR2, the project offers 690 units of serviced apartments with built-ups from 923 to 1,300 sq ft. The selling price ranges from RM487,000 to RM668,200 and the project is expected to be completed by 2028.

Armani Group launched Residensi Armani @ Bukit Lanjan, offering 306 units measuring 754 to 1,103 sq ft at a selling price of RM603,200 to RM882,400. The project is expected to be completed by 2027.

In Selangor, average prices, rents and yields of 3-bedroom units sampled generally improved in most selected sub-markets.

Petaling Jaya and Shah Alam saw their average prices increase y-o-y by 0.9% and 1.3% respectively, while Subang Jaya saw a decline of 0.7%. No average price movement was recorded at Bandar Sunway.

Average rents increased 2.9% and 3.6% in Bandar Sunway and Subang Jaya respectively while Shah Alam saw rents drop by 3.8% to RM2,500. No y-o-y change in rental was observed in Petaling Jaya.

Fong says the collaboration between Malaysia Airport Holdings Bhd and Menteri Besar Selangor Incorporated to develop and promote Zone 3 and Zone 4 at Sultan Abdul Aziz Shah Airport in Subang will subsequently benefit property prices and rental rates in the area.

“As part of the Subang Airport Regeneration Plan, these areas will focus on business aviation and aerospace sectors, driving more job opportunities for the local community.”

In Shah Alam, the upcoming PKNS Square development in Seksyen 14 will positively impact residential property prices in the surrounding area, says Fong. “This urban revitalisation project will begin near the Dato Menteri LRT3 station, with improvements planned for surrounding buildings. This will cover multiple areas in Seksyen 14’s city centre, such as the Shah Alam PKNS Complex, SACC Mall and nearby plots close to the LRT3 station.” He adds that this project is set to boost the economy and bring life back to the Shah Alam city centre.

New high-rise launches in Selangor during the quarter include SkyRia by LBS Bina Group. The project is the latest addition to its D’Island Residence development in Puchong and comprises 999 units of serviced apartments ranging from 600 to 900 sq ft. Selling price ranges from RM360,000 to RM544,000 and the project is slated for completion in 2028.

Mah Sing Group Bhd launched M Terra @ Puchong Perdana, comprising 748 units of serviced apartments with built-ups from 775 to 1,023 sq ft and 251 affordable housing units measuring 550 sq ft. Selling price ranges from RM546,250 to RM909,535 and the project is slated to be completed by 2027.

In Kuala Lumpur, the 2-storey terraced houses sampled in Taman Tun Dr Ismail (TTDI), Bangsar’s Lucky Garden, OUG and Cheras’ Taman Midah showed varying trends during the period.

Average prices in TTDI and Lucky Garden remained relatively stable during the period at RM1.57 million and RM1.66 million respectively, even though most of the houses in Lucky Garden, says Fong, are in ageing condition and require extensive refurbishment.

OUG and Taman Midah saw their average prices increase 2.3% and 4.1% y-o-y to RM890,000 and RM760,000 respectively. Taman Midah however saw its average rents decline 5.4% y-o-y to RM1,750 per month.

In Selangor, the 2-storey terraced houses sampled in Petaling Jaya’s SS2 saw a 4.7% increase y-o-y in average price to RM1.01 million during the quarter.

“SS2’s housing units remained in demand, thanks to its convenient location within the reach of robust commercial hubs and excellent connectivity via key routes such as the Federal Highway and LDP,” Fong says.

Bandar Utama in Petaling Jaya also saw a notable price performance, up 3.3% y-o-y during the period. Average rents also increased 4% to RRM2,600 monthly.

In Puchong, the double-storey terraced houses in Bandar Kinrara and Bandar Bukit Puchong saw positive trends with average price growth of 4.3% and 3% y-o-y respectively.

Similarly, the 2-storey landed houses in Subang Jaya’s Putra Heights saw an average y-o-y price increase during the quarter by 4.3%. 

Shah Alam witnessed increased prices for its landed terraced homes in Bandar Setia Alam and Kota Kemuning by 4.4% and 1.4% respectively. Average monthly rents in Kota Kemuning, however, declined 5.7% y-o-y to RM1,650.

“The demand for housing in Setia Alam remains strong, thanks to the township’s established amenities including malls, hospitals, educational institutions and offices, which enhance its appeal and support higher property values and rental rates,” says Fong.

As for Kota Kemuning, he notes that the township’s growth benefits neighbouring areas such as Bandar Rimbayu to the south and Alam Impian to the north. “This spillover effect supports increased demand and development potential in these adjacent areas.”

Over in Klang, the average price of 2-storey terraced houses in Bandar Bukit Raja increased 3.2% y-o-y whereas in Bandar Bukit Tinggi, they dropped 3%.

New launches in Selangor during the review quarter include Adira Bukit Raja in Klang by Sime Darby Property Bhd. The project, which is anticipated to be completed in 2026, offers 109 units of freehold 2-storey terraced houses with built-ups ranging from 1,910 to 2,168 sq ft at selling prices from RM869,888 to RM1.75 million.

Mitraland also launched Phase 1 of 22 Quartz, featuring 116 units of 3-storey villas adjacent to Eco Ardence in Shah Alam. The homes are priced from RM1.1 million and the project was reportedly sold out within a month of its release.

During the review quarter, prices and rental rates of the 2-storey semidees sampled in a majority of the selected areas in Selangor saw favourable growth, says Fong.

The semidee market in Shah Alam witnessed a notable y-o-y improvement in price and rental rates, resulting in a positive rental yield during the review period. Average prices at Bandar Setia Alam and Bandar Tropicana Aman increased 4.7% and 3.3% respectively, and their respective rental rates also moved up 3.8% and 4.4%.

The semidee market in Petaling Jaya’s SS3 saw the average price increase 3.2% y-o-y, and in Puchong’s Bandar Kinrara, it was up by 0.5%.

Klang saw a mixed trend in y-o-y price and rent movement — Glenmarie Cove experienced an average price surge of 5% while Bandar Parkland’s dropped slightly by 0.8%.

In Semenyih’s Setia Ecohill, the average prices declined 2% during the quarter.

In terms of the overall performance of the Klang Valley’s residential sector, Fong says it has gained momentum with most findings indicating positive and stable trends.

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