This month focuses on the residential property market in Seri kembangan. iProperty.com examines transaction activities and property price trends in the state for the first nine months of 2015.
The neighbourhood which saw the highest number of residential property transactions is Taman Pinggiran Putra (75), followed by Taman Puncak Jalil (56) and Taman Lestari Puchong (53).
Stanley Toh, Executive Director of LaurelCap Sdn Bhd attests Taman Pinggiran Putra’s popularity among homebuyers and investors to the average price of the properties there is still within the affordable range. Its proximity to commercial amenities including the Aeon Shopping Centre, Putra Walk, McDonalds Drive Thru and Kompleks Pasar Borong Selangor is a huge plus point. The neighbourhood also enjoys good road access via highways such as the Lebuhraya Damansara-Puchong (LDP), South Klang Valley Expressway (SKVE) as well as Lebuhraya Bukit Jalil from the back.
Sr. Paul Khong, Deputy Managing Director of Savills (Malaysia) Sdn Bhd explained that the top 3 highlighted schemes above are residential projects lying closer to the popular suburban commercial centre of Puchong, which currently services the entire general neighbourhood. The capital values of properties closer to Puchong are relatively higher due to locational, accessibility and convenience factors.
He shared that residential properties in Seri Kembangan are still relatively more affordable than the prices in Puchong. For instance, a terrace home in Bandar Puteri will cost double the price than that of its Seri Kembangan’s counterpart. A growing number of buyers are willing to accept the longer commute to the city centre and thus, select to forgo a shorter distance in favour of a lower price/affordability.
As it is getting too expensive to stay within the city boundaries, many new developments are coming up along the city fringes, in areas such as Semenyih, Kajang, Putrajaya as well as plots of land along the LEKAS Highway and the Kuala Lumpur-Seremban Highway, all the way down to Senawang and Seremban. In comparison to most of these areas, Seri Kembangan is technically closer to the city centre and is rising in ranks as one of the townships to live in.
In the period of Jan-Sep 2015, the building type that registered the highest number of units sold was Apartments/Flats (439), followed by Terraced Houses (353) and Condominiums (89).
Commenting on the buying trends in Seri Kembangan, Toh said that the statistics clearly shows that affordability and ‘own stay’ purposes are the key drivers for property purchases last year. This is consistent with the government’s efforts to curb speculation in the market.
With serviced apartments and condominiums recording a low transaction volume, Toh feels that fewer people are buying properties for investment purposes. Bungalows and semi-detached houses ranked low on the list as the price range is beyond that of what most people can afford at the moment. Besides that, a majority of those in the higher income bracket are now holding back from upgrading their homes in lieu of the poor economic sentiment.
Khong notes that the apartments/Flats and Terraced Houses categories, which accounts for more than 78% of the total number of transactions, are the most popular products as it is typical for first time home buyers to start off with a condominium unit and subsequently, upgrade to a landed terrace house when they decide to start a family.
As a young couple progress up the economic ladder, the tradeoff will be between distance and price/size, where they could either move into a house further away (suburb) or stay in a conveniently located condominium unit nearer to the city centre.
Khong feels that many will still decide to go for landed properties and forgo a shorter commute. He also commented that many Malaysians perceive the owning of a home with a freehold land title as a sign of success and status.
Seri Kembangan is an established locality and is in a relatively strategic location. House prices there is attractive cum affordable as compared to many other areas within the Kuala Lumpur city limits. Its residential property market also still largely focuses on the local populace and has low demand from expatriates.
According to Khong ,the larger sized residential products such as the bungalows and Semi-Ds are targeted at the local, homegrown upgraders who are currently residing in the vicinity and are looking to move nearby to their parents/relatives. However, these buyers are spoilt for choice as the supply clearly exceeds the demand.
James Tan, Associate Director of Raine & Horne International is of the opinion that the potential for rental and capital appreciation of residential properties in Seri Kembangan is likely to be moderate in the near future. This is due to the potential huge supply that can come on stream as there is still quite a bit of undeveloped land around the area. In addition, the current socio-economic uncertainty adds on to the negative buying sentiment among consumers.
Toh concurs that the rental market in the area will remain stagnant as the supply of properties in the area still exceeds the demand. He explained that it will take some time for the market to absorb the excess supply. This is because residential developments in the entire southern part of the Puchong has previously targeted the student population from the surrounding tertiary institutions such as University Putra Malaysia and spillovers from universities in Cyberjaya and Putrajaya as potential renters.
Khong further commented that landed residential properties within Seri Kembangan, as well as strategically located condominiums, will continue to garner interest from home buyers. With a large population base in the neighbourhood, the demand for properties should be quite resilient. However, he notes that newly completed condo units may face some compression in yields and capital values due to a sudden spike in market supply.
The total number of transactions for landed properties in Seri Kembangan was 417 with an average price per sq ft of RM297.
Tan notes that the price trend is generally stable, albeit there is some measure of fluctuation. Toh agrees that property prices in Seri Kembangan are stable. He also commented that the price per sq ft of landed properties has been showing slow signs of waning. As of September, the number of transactions saw a drop despite the lower price per sq ft. He attributes the spike in March to the pent-up demand from pre-CNY. Toh expects prices of landed properties to maintain in the short term while in the longer-term, prices willl increase slowly but gradually.
The total number of transactions for non-landed properties in Seri Kembangan was 597 with an average price per sq ft of RM264.
Toh believes that the prices for affordable non–landed properties still has room for appreciation. He also foresees the price trend for serviced apartments to remain neutral whilst there is still room for appreciation for the medium cost apartments.
When questioned on Seri Kembangan’s property market performance moving forward, Tan said that the Sungai Buloh Serdang MRT line 2 will have some positive effect on the property market as there will be two stations, namely SS27 and SS28 in the area. This will certainly help enhance the value of properties upon completion and increase its popularity among working professionals. He expects the market to be stable in light of the uncertain economic conditions.
Khong believes that the landed segment in Seri Kembangan will continue to face stiff competition from the non-landed properties as the developers are cutting down unit sizes in order to make the purchase of condominium units more affordable.
He shared that there are more competitively- priced projects coming up in the surrounding areas such as SK One Residence @ Seri Kembangan, Trion 888 @ Taman Equine and Flexis @ One South.
In addition, non-landed properties also offer homebuyers round the clock security and standard facilities such as swimming pool, sports court and children’s playground, among many.
On the other hand, landed residential products catering to the mid and higher end markets, with their gated and guarded schemes are now being built by branded developers within large themed townships. However, the entry level for these products will be more pricey.
Given that Seri Kembangan is sandwiched between the city centre and Kajang/Putrajaya, it is fast becoming a prime area among homebuyers.
There are also a number of commercial landmarks found therein which make the neighbourhood attractive and convenient for its residents. Notable commercial schemes in the area include The Atmosphere, The Mines (CapitalLand), C180, AEON, IOI Mall Putrajaya and Columbia Asia Hospital, to name a few.
However, Khong mentioned that moving forward, Seri Kembangan still needs an overhaul to rebrand itself to be more upmarket. Even though there is quite a few newer and well-themed housing schemes in the area, there is an equal amount of older and blighted residential properties in the vicinity.
Disclaimer: The source of data on brickz.my is from the Valuation and Property Services department (JPPH) which officially records a property transaction once the stamp duty for the Sales and Purchase is paid. 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.
This article was first published in the iProperty.com Malaysia May 2016 Magazine. Get your copy from selected news stands or view the magazine online for free at www.iproperty.com.my/magazine. Better yet, order a discounted subscription by putting in your details in the form below!