KL Property Market: What to Expect in 2020 and Beyond

KL Property Market: What to Expect in 2020 and Beyond

2020 has been a year with unexpected challenges. The global Covid-19 pandemic has had a major impact in nations around the world, and with many international borders closed, it is not easy to predict what will happen in 2020 and beyond. 

Despite all these challenges, the property market in Malaysia remains resilient and, with the aid of various government incentives, we can most probably expect an upward trend. Below are several reasons why you can expect this to be so in 2020 and beyond. 

The resilience of the property market

The current market might be somewhat affected by the Covid-19 pandemic but property continues to be one of the most resilient investments that one can make. 

For example, during the 1998 economic downturn, the property market still moved forward despite the 30% decline. Transactions made during this period amounted to RM27.9 billion and, in the past few decades, house prices have continued in an upward trend. 

As reported in this New Strait Times article dated April 2020, the house price index has not declined since 1999 on the national level. Terraced houses are the most consistent in price growth among all the property types and seem to be favoured by Malaysians who are looking to purchase a home. 

In Kuala Lumpur, there has been a high demand for serviced apartments and luxury condominiums during the crisis years. Penang also saw similar popularity for high rise properties in these years. In 1999, the median price for residential properties was RM220,000. By 2004, the median price was RM400,000.

Fewer projects by developers

There is an oversupply of property in Malaysia. In addition to this numerous developers have focused on building highly-priced condominiums which normal, middle-class Malaysians are unable to afford.

Regulations have been put in place by the Malaysian government in 2018 to curb the large supply. Additionally, in 2020, units that are more affordably priced are constantly being developed, providing more people with opportunities to purchase a home. 

Rent-to-Own Homes (RTO)

Introduced by the Malaysian government to boost the property market, this program is one that is incredibly favourable for those who do not have the means to pay the initial 10% deposit to purchase a property. First-time buyers will be happy to know that this program will most likely result in lower mortgage rates and thus, increasing their confidence in their ability to own a home. 

Malaysia’s Short term Economic Recovery Plan (PENJANA)

The past year has not let up in the number of risks and challenges affecting the Malaysian economy which led to the introduction of the 4th economic stimulus package on June 9, 2020. Deemed the National Economic Recovery Plan (PENJANA), this economic stimulus package includes several incentives aimed to spur the property market and provide Malaysians with the means to own property.

Penjana

Below are a few of the benefits offered by the PENJANA initiative:

Stamp Duty Exemption

Available until 31 May 2021, this benefit known as the Home Ownership Campaign enables purchasers to be exempted from stamp duty on the instruments of transfer and loan agreement for residential property that is between RM300,000 to RM2.5 million. Do note that these exemptions are only applicable if the property you are purchasing is registered with REHDA Malaysia, SHEDA (Sarawak) or SHAREDA (Sabah). 

Additionally, the 70% margin of financing limit for third residential property will also be uplifted, meaning that purchasers can have up to 90% loan even for buying their third property. Do note that loan approval by financial institutions is still subject to internal risk assessments. 

Revised Real Property Gains Tax (RPGT)

Under the PENJANA initiative, those who gain from selling their residential property will be exempt from RPGT. This initiative is applicable until 31 December 2021 with up to three residential properties per homeowner. 

If you have been working for a few years and have the means to purchase a property, know that the PENJANA initiatives are benefits that do not come by often, which makes it an ideal option for those planning to buy a home and reap the benefits in the years to come. 

Increased interest in the MM2H Visa

The Malaysian My Second Home (MM2H) program is one that encourages foreigners to live, work and invest in this country. The minimum investment requirement is RM1 million and comes with numerous benefits including a 10-year renewable visa. In light of the Covid-19 pandemic, this MM2H program is currently being reviewed and is expected to be completed by the end of 2020. Thus, we can look forward to an improved version of the MM2H program in 2021. 

Why invest in property in Kuala Lumpur?

Malaysia’s capital is prime land, making it an ideal investment for those who have the means. Home to businesses, entertainment and numerous important landmarks, this piece of prime land is expected to continue to appreciate in the long run. The area is also home to various residential options which are seen as a symbol of prestige. This includes the upcoming YOO8 serviced by Kempinksi at 8 Conlay — an upcoming branded residence set to dominate the skyline of Malaysia’s capital city in 2021. 

YOO8 serviced by Kempinski 

Located within walking distance of Bukit Bintang, this branded residences component of 8 Conlay represents a bold new benchmark for premium city living. If this sounds like something up your alley, below are a few reasons on why you should consider investing in YOO8 serviced by Kempinski.

Strategic location

There’s plenty of things to look forward to when one is mere footsteps away from bustling Bukit Bintang that draws in visitors from all walks of life with its incredible shopping and dining experiences. Those who wish to explore beyond the city can easily access the MRT and LRT stations located nearby 8 Conlay. The branded residence is also easily accessible via KL’s main roads as well as major expressways.

Kempinski’s 5-star hospitality

Residents of YOO8 will be able to enjoy 5-star comfort at home with comprehensive in house offerings from Kempinski, Europe’s most well-established hoteliers. Kempinski offers concierge services, valet services as well as a 24-hour security system that ensures residents will be safe. 

Housekeeping and laundry services are also available and you will not have to worry about keeping the house as you go about your day. If you want to eat something delicious but do not have the energy to cook, Kempinski offers a private chef service. 

There is also an on-call butler and an on-call tailor. Families with young children will be happy to know that Kempinski offers nanny services as well as a daycare centre. 

State of the art facilities

Facilities offered at YOO8 are state of the art and include a gymnasium equipped to bring your workout to the next level. There is a Malaysian rainforest inspired water lounge where you can cool off on a hot day. At the Green Refuge, you can take a brisk walk on the elevated jogging track or just enjoy the undiluted views of the Petronas Twin Towers. 

Professionally designed interiors and exteriors

The interiors of YOO8 Tower A are designed by Steve Leung & YOO while world-renowned Kelly Hoppen takes the helm for Tower B. Both towers are designed by RSP Architects while TROP undertakes the landscaping of 8 Conlay. The immense talent combined gives one every reason to be confident that this residence will be on that combines both flair and functionality. 

Conclusion

Many are nervous in taking up big financial commitments such as a house mortgage especially with the uncertain future due to the global pandemic. However, over the years, the property market has always been resilient and we can expect that it will continue to be so. With the numerous government initiatives in place, we can expect that the KL property market will start to see an upward trend again very soon. If you are looking for a home to purchase, now is the best time to make the move into the property market.