The best-planned and most well-managed developments can also cast a halo effect on their neighbouring areas, causing the prices of properties there to rise by association. As a home, the value of a house or apartment rises with each successful generation that grows up in it. In this way, it repays the owner’s investment in the integrity of the development and its chosen location.
Luck and good timing undoubtedly play a part in choosing a house and home that grows in value, but foresight, long-term planning and patience are prerequisites for successful property investment. Prime residential locations in Kuala Lumpur were once thought of as being in the middle of nowhere. They continue to hold their value because of consistent demand, being largely indifferent to the boom-bust cycle of property bubbles.
Now, selected areas of Negeri Sembilan could represent an opportunity to secure a very liveable home and a nest egg: Bandar Ainsdale, Chemara Hills and Nilai Impian have been conceived with long-term value in mind.
Negeri Sembilan snapshot
- Those used to living in highly dense urban centres such as Kuala Lumpur might be envious to know that according to the National Property Information Centre, as at 4th quarter of 2015, 70% of Negei Sembilan’s housing stock comprised terraced, semi-detached and bungalow houses. Almost 20% (31,394 units) of this figure of 248,163 units comprised bungalows. Landed property remains the most common unit of home ownership in Negeri Sembilan. The high number of landed properties in Negeri Sembilan might be attributed to the wider availability of suitable land bank at lower prices.
- By comparison, the supply of bungalows in Kuala Lumpur and Selangor is much lower than in Negeri Sembilan, at 7% (7,092 units) for Kuala Lumpur and also 7% (48,058 units) for Selangor, despite their larger populations (KL, 1.73 mil; Selangor, 6.14 mil; Negeri Sembilan, 1.08 mil). This high-supply and low-demand trend for landed property in Negeri Sembilan means medium-to-long-term bargains are much more likely to be found here than in the Klang Valley.
- However, according to the Malaysian Department of Statistics, Negeri Sembilan’s current level of urbanisation is at 66.5% compared with Kuala Lumpur (100%) and Selangor (91.4%). This rate can be expected to increase, and districts such as Seremban (which includes Seremban town and Nilai) and Port Dickson are likely to see rising demand for a wider range of housing, especially as prime parcels of land become more scarce.
- The latest statistics also show what new households are being formed at a faster rate than ever across Malaysia. New households are forecast to comprise just four people in 2020. There is now also a higher demand for a wider range of housing (apartments, condominiums, townhouses, etc) to cater to those who need smaller, more affordable units. However, both Bank Negara Malaysia and Khazanah Research Institute note that new housing supply has not kept up with new household formation over the past five years. As Negeri Sembilan continues to rapidly urbanise, this trend means it will need to diversify its housing supply to include a lower percentage of landed property.
- In Nilai, where there are large educational establishments such as Nilai College and Inti College, demand for smaller units of housing from a large student population has already seen the construction of many high-rise developments.
- Ideally, Negeri Sembilan should eventually offer a balanced range of landed and non-landed homes that matches its demographic profile. Sime Darby Property is committed to building such sustainable communities by developing different types of housing to meet the more diverse demand trends. These should not be built down to a price, but cater optimally to the needs different markets segments.
Monthly median asking prices for residential and commercial properties in Negeri Sembilan (Jan 2015 – Jan 2016) Source: iPropertyiQ
- For commercial properties, median asking prices in Negeri Sembilan held steady at RM800,000 after their peak in mid-2015 to rebound almost to their previous high of around RM850,000 in Jan 2016.
- This is an encouraging sign for business activity and buyer sentiment in Negeri Sembilan in the short to medium-term, and for both residential and commercial property values in general. During the period under review, sellers still appeared confident of a good take-up rate at the high asking prices, despite the slowdown in the overall economy.
- From the chart above, median asking prices for residential properties show two broad trends: landed residential property prices appear to have mirrored that for commercial properties, but non-landed prices trended downwards to around RM120,000 after almost hitting the RM200,000 mark in June last year.
- It is worth noting that the median asking price for high-rise properties surged between April and May, from just below RM90,000 to roughly double in June, at around RM180,000, before moderating slightly, and then tapering off to around RM120,000 in Jan 2016.
- A clearer picture of the residential property market emerges when we consider transacted prices, below, specifically for Nilai and Seremban town, compared with Kuala Lumpur city centre and Petaling Jaya.
Comparison of median transacted prices for residential property types in KL city centre, Petaling Jaya, Nilai and Seremban (Jan 2015 – Dec 2015) Source: brickz.my
- Median transacted prices for the period of Jan 2015 to Dec 2015 show a clear trend: all types of property were transacted at higher prices in Nilai than in Seremban, except for condominiums. This trend might reflect the relative shortage of condominiums in Seremban compared with Nilai.
- In particular, prices of landed properties in Nilai clearly outpaced that in Seremban. Detached houses or bungalows sold at a median price of RM650,000 compared with RM400,000 for Seremban; semi-detached houses for RM530,000 (Seremban, RM355,000); and terraced houses for RM230,000 (Seremban, RM200,000). These prices might reflect the newer developments for landed properties in and around Nilai relative to Seremban, which might also have a higher supply of landed properties. (NAPIC statistics do not differentiate between Seremban town and Nilai, and counts them both as part of Seremban district.)
- Conversely, in Seremban, condos were transacted at higher prices than in Nilai (RM270,000 to RM190,000). However, the situation was reversed for apartments, with Nilai recording a median transacted price of RM160,000, or double that of Seremban. The small premium fetched for condos over apartments in Nilai (RM190,000 versus RM160,000) reflects the university town’s younger demographic compared with Seremban’s, which has also been developed over a longer period.
And what are the comparable prices in the Klang Valley? As pointed out by Khazanah Research Institute, there is pressing need for a national housing survey, such as on existing and incoming housing stock and demand trends at a district level. Until then, it is difficult to place a purchase decision in a wider context. However, the following figures are telling of Negeri Sembilan’s investment prospects, relative to an established property hub such as Petaling Jaya:
TL;DR – Too long, didn’t read? If you’re looking for an apartment in Negeri Sembilan, Nilai is where it’s at. If you’re looking for landed property, new townships such as Bandar Ainsdale located in between Nilai and Seremban offer potentially very good value. For an end-game, upmarket home in a mature township that offers a cosmopolitan lifestyle without the hyped-up prices, look up Chemara Hills.