Mont Kiara Condominium Market Outlook 2009
Mont Kiara is one of the favourite property hotspots in the country. Many Klang Valley folks and property investors are familiar with Mont Kiara as a vibrant neighbourhood. There are currently close to 10,000 completed condominiums in Mont Kiara, its neighbouring areas in Sri Hartamas and the newer Dutamas area. Another 6,000 units are expected to come on stream in the next couple of years.
Although transactions almost halted early this year following the global financial crisis, sentiment is gradually recovering since the middle of this year, with more transactions concluded in the secondary market. Overall, the market had fared quite well although average prices of high-end condominiums in Mont Kiara have dropped by 10% to 15%. Thanks to the buyers’ tenacity and the more flexible repayment terms offered by financial institutions, there was no fire sale reported so far.
The market for high-end condominiums is still soft, but prices seem to have bottomed out especially for suburban condominiums, such as Mont Kiara area. The market is starting to show some signs of recovery as more buying activities are seen in the second half of the year. However, despite the renewed interest, the downside of the sector lies in the incoming supply of new condominiums which will be completed in the second half this year and in 2010.
The asking prices for the older residences range from RM400 to RM650 per sq ft, while the newer projects have price tags from RM450 to RM750 per sq ft. Rental rates are holding out quite well with the older developments enjoying yields of between 7% and 10% last year. The higher entry cost for the newer projects will push yields down to around 6% this year.
Although there is a short term over-supply issue, the situation is expected to reverse as the attractiveness of Mont Kiara picks up again among investors given its superb amenities, international schools and business activities.
Projects under construction are still on schedule and some, including MK10, Gateway and Ceriaan Kiara, are almost completed. The launch of some of the planned developments including MK28 and 163 Kiara have been pushed to next year. Some of the projects are highly anticipated as there are investors and owner occupiers still looking for newer properties to invest in Mont Kiara. The bigger units are always in demand by owner occupiers while lower range units are popular among investors.
Mont Kiara will continue to be an obvious property hotspot as it has gained the critical mass to continue to prosper. Adding to that is the limited supply of land that puts a natural limit on future supply. As for commercial products, products that will do well include proper service apartments and hotels, and smaller office suites with corporate designs.
