Kuala Lumpur sees over 1,000 new residential units in Q3

These units were from two projects completed during the quarter.

During the quarter, two residential projects, Axon Bukit Bintang and Pavilion Ceylon Hill, were successfully completed in Kuala Lumpur, adding a total of 1,094 units to the existing stock. However, JLL said there have been construction delays in four projects totalling 814 units, primarily caused by administrative and paperwork issues, which have affected the timely delivery of these projects.

One project, The Lantern, located in Bangsar with a total of 180 units, was launched during the quarter.

Here’s more from JLL:

In 3Q23, the interest rate remained unchanged at 3%. However, the tightening of financing conditions has created a dampening effect, leading buyers to reassess their decisions on high-value purchases.

The residential property market was characterised by soft demand, largely influenced by transactions initiated by expatriates. Notably, in two completed projects, all units were sold prior to their delivery, highlighting their impressive market appeal. However, the overall demand in the broader market remained modest.

Strong rental demand in the residential market

Investors strategically acquired lots in projects nearing completion within 6 months for rental income, aiming to optimise timelines and generate future ROI. Steady interest rates posed cash flow challenges. Thus, projects with defined completion dates were preferred as they mitigated delays and capital risks. Investment sentiment remained moderate.

The rising rental demand is being driven by changing homebuyer preferences. In Kuala Lumpur, a resurgence of foreign tenants has been observed due to office relocations and a recovering economy with increased foreign investments. Renting has become the preferred choice for many individuals.

Outlook: Government incentives hope to boost residential segment

The domestic demand volume is experiencing a subdued trend, primarily attributed to the weakening of the Malaysian ringgit and the presence of higher interest rates. These factors have contributed to a cautious approach among buyers, resulting in a hold on purchases.

In line with the 12th Malaysia Plan (12MP) Mid-Term Review (MTR), the government of Malaysia aims to prioritise affordable and accessible rental options over ownership to enhance housing accessibility. Simultaneously, it seeks to improve rent-to-own housing programmes to facilitate easier access to home ownership financing and boost the availability of affordable housing across the nation.

Note: Kuala Lumpur Residential refers to Kuala Lumpur's prime residential market.