Klang: An affordable heaven for landed properties below RM300,000

This is because given the choice the general Malaysian preference is still skewed towards terrace / landed properties. According to Andrew Tan, principle from MLP Realty, “Klang has experienced an influx of newer high rise residential developments over the years and it is still predominantly comprised of older developments which lack in adequate building management and maintenance. It is also a growing trend that terrace/ landed properties, especially those located within master-planned township developments will continue to steadily outpace high rise residential developments in terms of transaction volume and capital appreciation.’’

Source: iPropertyiQ.com

To better understand Klang’s property trend, we’ll take a look at transaction data of five prominent areas in Klang: Taman Sentosa, Bandar Botanic, Bandar Puteri Klang, Taman Sri Andalas and Bandar Bukit Tinggi. Tan explains that Klang comprises mostly matured neighbourhoods which have enjoyed high capital appreciation in their heyday. Bandar Botanic, hailed as one of the oldest townships in Klang is an example of an area that has experienced high capital growth appreciation over the years in relation to other townships within the surrounding locality.

Today, the area recorded 4.2% year-on-year capital growth, with only 0.9% y-o-y transaction growth and 2.5% increase in asking rental yield. Tan suggests that given its current high prices, the principle of substitution applies whereby purchasers have access to other choices at a more affordable level. Taman Sentosa is also regarded as one of the matured developments within Klang, predominantly comprising low to medium cost landed residential developments.

Despite experiencing negative y-o-y transaction growth, Taman Sentosa recorded 15.9% year-on-year capital growth with 3.7% increase in asking rental yield, highest among the five areas due to its affordability. Tan opines that the low transaction growth can be explained by its high owner occupancy rate with limited inventory available for sale in the open market.

Bandar Puteri Klang is one of the newer townships that consists mainly of double storey terrace houses. Even with additional offerings such as a 9-acre recreational lake garden and a direct access to KESAS highway, its y-o-y capital growth stands at merely 1.1%, while its y-o-y transaction growth is recorded at an impressive 23.8%. Taman Sri Andalas on the other hand is one of the largest matured townships in Klang with plenty of amenities in its surrounding to cater to all of the residents’ basic needs. Although its y-o-y transaction growth has been negative (-1.3), its capital growth has increased by 11.1 % since last year.

The newer Bandar Bukit Tinggi is an integrated modern township in Klang that consists of 3 major development areas, namely Bukit Tinggi 1, Bukit Tinggi 2 and Bukit Tinggi 3 (Klang Parklands). Relatively new compared to the other townships there, Bandar Bukit Tinggi recorded low y-o-y capital growth at 2.0%, its y-o-y transaction growth however is the highest at 28.9%. Being a new township, it offers plenty of modern amenities and conveniences which allow it to fetch a better rental.

According to iPropertyiQ.com, terrace house sizes that fall within the range of 1501 sq ft and 2000 sq ft are preferred by Klangite’, while the preferred price falls within the range of RM480,000 and 670,000. Tan explains that residential homes that meet the above criteria are generally well received by the market given their size practicality (i.e. additional space to accommodate a growing family). Meanwhile, the price bracket is still accessible by the middle-class population which is set to expand in the short-medium term.

Source: iPropertyiQ.com

As evident in the previous data on transactions by building types, only 16.1% of Klangites prefer living in apartments. Except for Vista Bayu and Prima Bayu, the top five projects selected reveals that there is a decline in capital transactions since last year; this however, did not affect the y-o-y capital growth and rental yield across the board. Both Vista Bayu and Prima Bayu have similar positive trends which are not surprising since the medium-cost freehold condominiums are almost identical. As far as preferred size range goes, the scale tips heavily towards apartments that are in the range of 751-1000 sq ft at 66.3%, while 29.3% preferred those that fall in the price range of RM220,000 – RM280,000.

Due to the development of newer townships such as Bandar Botanic and Bandar Bukit Tinggi coupled with the affordable price tags (compared to nearby prime areas such as Shah Alam and Subang Jaya), growth has been  rapid recently and prompted the values of non-landed residences to increase. For those considering investing in an apartment or condominium in Klang, look into factors such as location, maturity of area, connectivity and amenities, developer, price, and the demographic of the resident population. However, investors should note that the high rental yields are made possible by the low capital prices of the properties.

Future outlook

In conclusion, Klang offers an opportunity for first-home buyers or upgraders to own a property at an accessible price. Looking ahead, Tan envisaged that the Klang property market will enjoy steady growth in take-up rate and prices. Klangite’ will continue choosing landed properties as their homes for the affordability while those looking for investment opportunities will look into the highrises for the rental yields.

“The impending completion of the LRT 3 Bandar Utama – Klang Line coupled with the river rehabilitation project will undoubtedly spur growth in real estate values, especially those located along the infrastructure corridors. Furthermore, Klang has the added advantage of enjoying the synergistic benefits arising from the existing / incoming mix-used master planned developments in other neighbouring satellite cities; given its excellent connectivity made possible by existing highway infrastructures.”

DISCLAIMER: The source of Sale data is from the Valuation and Property Services Department (JPPH) which officially records a property transaction once the stamp duty for the Sales and Purchase Agreement is paid while the source of rent data is from agents’ listings listed at iProperty.com. Analytics are based on the data available at the date of publication and may be subject to revision as and when more data becomes available.

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