Close to the line
Properties located close to train stations in KL can command premiums of up to 10 percent.
Demand for transit-oriented developments in KL is set to boom with the future High Speed Rail (HSR) network and strict guidelines in place to reduce traffic congestion.
By Romesh Navaratnarajah
In light of the 1MDB saga and an oversupply of units, many foreign investors are staying away from Malaysian property for now.
Although the market remains very challenging, some analysts and experienced investors think this may be an opportune time to snap up good deals.
According to Khalil Adis, founder of Khalil Adis Consultancy, the weak ringgit has benefitted certain sectors of the market, such as short-term home stays and commercial units. As of 19 August, the ringgit is down to almost RM3 against the Singapore dollar.
Investors looking to monetise their residential properties should capitalise on the tourism market and falling ringgit by listing their units on home-sharing websites such as Airbnb, said Adis. In Singapore, short-term leases of private residential properties for less than six months are illegal, but the practice is allowed in Malaysia.
As for commercial assets, he feels “hotel suites and retail units are the property types investors may want to look at right now”.
The Arabs are here
He thinks hotel suites are a good buy, since licenses for such developments have been frozen by the authorities, making such units a rare find. Hotels in Kuala Lumpur tend to be full during the Arab season from June to August, where hotels can command up to 20 percent more in daily rates.”
Currently, foreigners can only purchase properties in KL that are priced at or above RM1 million (approx. S$335,000), which is still a third of the price of a condo unit outside Singapore’s central business district (CBD).
Said Adis: “Go for small units as the rental market is tough in KL. Affordable rents will open your market to both Malaysians and foreigners.”
A game-changer
Meanwhile, the recent signing of an agreement between the governments of Malaysia and Singapore for the construction of a 350km High Speed Rail (HSR) project will cut travel time between the city-state and KL to just 90 minutes, boosting property prices in the Malaysian capital, say experts.
“Our research shows that properties located within proximity to transport hubs and train stations in KL can command a five to 10 percent premium in resale and rental prices,” noted Adis.
The Malaysian terminus of the HSR network will be located in Bandar Malaysia, which is about 3km from KL’s CBD. Adis said the future masterplan for the area is “impressive, comprising around 30,000 homes, as well as commercial and retail precincts”.
He reckons potential investors should look at transit-oriented developments that are located within 200 to 400 metres away from upcoming train stations. He predicts such projects will gain popularity as the city’s governing body has come up with incentives and guidelines to reduce traffic congestion.
Millionaire property investor
KK Goh, a professional property investor in his 40s, told PropertyGuru that he made more than a million dollars investing in Malaysian real estate. He began shopping for properties in KL some years back, and has since amassed “several properties” which have seen a 50 percent appreciation in prices over time.
With his business partner Kris Chan, he now runs property bootcamps to guide Singaporeans on how to invest across the causeway safely and profitably.
“A property purchase is a big-ticket item. New investors have to get themselves educated on what properties to buy, where to buy, when to buy and how to buy,” said Goh.
His advice for newbies is to study the market first. “Investors need to do their due diligence thoroughly before they proceed to sign on the dotted line to purchase any property.”
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