One property which has dropped its prices is that of a beautiful condo development located behind my own. It sits on a hilltop within a quiet and low-density part of Sri Hartamas, within striking distance of Bangsar, Damansara Heights and Mont’Kiara. For many, you can’t get a more desirable address than that.
The property itself is gorgeous with all mod-cons: exclusive lift lobbies where unique access cards open only to your apartment, video intercom, fibre optic backbone, etc. Even though the development was completed about three years ago, however, more than 60% of this tower is empty.
“This tower was originally bought en-bloc by a tycoon who intended to re-sell for profit but it has taken some time because they are all big units like over 2,000, 3,000 and 4,000 sq ft,” says a source close to the development. “Now the bank is also involved in the sale, and although the developer’s last price was over RM800 per sq ft, the price has recently been reduced to RM720 per sq ft.”
Another condominium in a central Damansara Heights spot has been quite empty since being handed over in 2011. 92 out of 318 units are occupied, which works out to under 30%, says a source close to the development. In fact, there are still developer units available for sale.
The majority of sub-sale owners here are foreigners, including investors, from Europe and Singapore, as well as block owners holding between 25 to 40 units, who engage agents to market their units.
Many times, owners of apartments such as these would rather hang on to their investments in the hope of selling for a profit, than look for tenants, reckons MIEA president Siva Shanker.
“We as estate agents often go to these owners and ask them, ‘Would you like to rent your unit?’ They say, ‘No, no, I want to sell!’ and we say, ‘But you’re getting nothing for it now, why don’t I bring you a tenant that will give you at least 6K?’. Maybe they don’t want to spend RM150K to renovate, put in kitchen cabinets, wardrobes and all that. They just leave it and don’t care.”
“It’s a distortion of the market,” admits a young developer. “Too much money speculating on property, while the main core of market cannot afford those prices.”
“The worst part about it is when absentee buyers don’t pay management or maintenance charges. Sometimes they say there’s no income from the unit so they don’t want to pay. The result is delapidated facilities and a security concern for those few units which are occupied.”
Even developers don’t like properties which stay empty after being handed over. “We don’t want it empty,” says one representative of a leading developer. “It doesn’t looks good.”
