Malaysia housing approvals
By end-2012, around 63,008 properties were unsold, a 15.5% rise from the previous year. However, this was still way below the peak of 83,811 unsold units recorded in 2004 - a year which was not followed by house price falls. In 2012 the condominium market saw a large number of construction starts, especially in Ipoh, Johor Bahru, Kota Bharu, Kota Kinabalu, Kuala Terengganu, Melaka, Penang, and Seberang Perai, according to C.H. Williams Talhar & Wong. Overall housing approvals in 2012 rose by 47.4% to 235,249 units. The value of residential construction work rose 24.9% on the year in Q4 2012, to RM5.76 billion (US$1.9 billion).
In Q3 2013 the pressure seemed to be easing, and the number of launches drastically dropped by 74.5% to 3,736 new housing units, from 14,662 units in Q3 2012. As of Q3 2013, housing approvals declined by 22.5% y-o-y to 140,891 units, according to the Ministry of Housing and Local Government.
Moderate yields, small rental market
Kuala Lumpur’s rental yields are moderate. Condominiums enjoy higher gross rental yields, ranging from 4.67% for 300 sq. m. condominiums to around 5.44% for 65 sq. m. condominiums. Bungalows have lower yields as compared to condominiums, ranging from 3.78% to 5.04%, according to the Global Property Guide research in December 2012.
During the second half of 2013, rents of existing high-end condominiums in Kuala Lumpur City have remained stable, ranging from MYR 3.00 (US$ 0.92) to MYR 5.50 (US$ 1.68) per square foot (psf) per month, according to Knight Frank’s latest report.
Next to KL City, Bangsar’s high-end condominiums have rents ranging from MYR 2.50 (US$ 0.76) to MYR 4.50 (US$ 1.37), followed by Damansara Heights with rents between MYR 2.50 (US$ 0.76) and MYR 4.00 (US$ 1.22).
The government’s Economic Transformation Programme (ETP) has helped to increase the demand for luxury condominiums in Klang Valley, which caters mainly to foreigners, according to C.H. Williams Talhar & Wong.
Malaysia has a small rental market. Only 6% of the housing stock is in the private rental sector. About 85% of total stock is owner-occupied, while government-provided housing accounts for 7% of the stock.
