Flat growth seen for Klang Valley property market

The growth of the property market in the Klang Valley is expected to be flat this year, says real estate consultant firm, CH Williams Talher & Wong Sdn Bhd.

Its managing director, Foo Gee Jen said property components such as landed residential, purpose built office, retail and hotel would see flat growth, high-rise residential segment would decline, however, the industrial component was expected to record good growth.

"The high-rise residential is a segment where everybody is worried about as there is an oversupply of shoebox units that are coming into the market," he told a media briefing on the property market outlook 2016 here, today.

He said the bulk of the high-rise residential units would be completed in 2017 and this would inject an additional 37.2% or 13,500 units, increasing the existing units to 49,752 units.

"Incoming supply of high-rise residential in the next two years (2016/2017), will exert more pressure on occupancy rates.

"Rental rate will remain competitive to the advantage of tenants," said Foo.

He said evidently there was a mismatch in supply and demand for high-rise residential properties as there were too many small shoebox units.

"The real situation now is how to fill up occupancy, before moving on and build new ones, that is the challenge," he said.

Meanwhile, landed properties would continue to grow in terms of pricing and demand, but this would be restricted by scarcity of land, he said.

"Landed residential sector is expected to see price stability with minimal growth, however, transaction activities might contract further," Foo said.

He said the soft market sentiment might see the introduction of new developments at affordable prices to address the needs of the 'squeezed middle' population segment.

On landed residential secondary market, Foo said property transactions were expected to increase.

On the retail segment, 13 malls are scheduled for opening in 2016, offering 7.56 million sq ft of space, in central Kuala Lumpur; Metro Kuala Lumpur (municipal areas of Petaling Jaya, Ampang Jaya and Selayang 1); and Greater Kuala Lumpur (municipal/districts of Selayang 2, Subang Jaya, Shah Alam, Kuala Selangor, Klang, Kuala Langat, Putrajaya, Sepang, Kajang and Nilai).

He said this was prompted by the increasing demand by the young and affluent urban population as well as tourists that would sustain the retail malls' performance within Kuala Lumpur. Foo said competition for rental space would be high as tenants tended to move, and as with high-residential properties, it would also be pressured by occupancy rates.

"Industrial property, on the other hand, is underrated but is anticipated to register strong growth especially in terms of rental and prices," Foo said.

Overall, he said the property market saw a slowdown in 2015 but was resilient, however, 2016 would see the survival of the fittest among property players. - Bernama