How to price your property right

Photo credit Andrii Yalanskyi

Many people have realised that they cannot sell their properties at market price any more, as prices are dropping. Sellers should get serious and sell their properties as soon as possible to take advantage of the buyers’ market today.

Current market prices are not the prices we see in property listing sites as these are the intended selling prices and not the actual transacted prices. Buyers are spoilt for choice today and unless that property is in a premium area where supply is in shortage, the original listed price will have to be trimmed.

Amy Wong, Savills Malaysia director of research and consultancy says that the transaction volume of high-rise residences in the secondary market dropped in both KL and Selangor in 2018 compared with 2017.

KL recorded only half of the total transaction volume compared to the previous year. The transacted value was flat in KLCC, Bangsar and Mont’ Kiara in 4Q 2018.

Note that transactions are down, meaning interest to buy may be lower or buyers did not want to pay the price the owner wanted. However, the actual transactions in KLCC, Bangsar and Mont’ Kiara showed prices remain almost the same.

So the issue is sentiment and not fundamental issues like a crisis or a bubble bursting. The average asking price in these three zones dropped about 3% quarter on quarter in 4Q 2018, although it was still 10% to 15% higher than the average transacted value.

Prices ranged from RM830 to RM1,810psf in KLCC, from RM750 to RM1,200psf in Bangsar and from RM610 to RM700psf in Mont’ Kiara.

Fewer secondary transactions were recorded in KLCC after GE14.

The secondary market in KLCC is still inclined towards the bigger units of more than 1,500 sq ft. These accounted for over half the secondary market transactions last year.

The prospects for high-rise residential properties in KLCC remain challenging. With over 6,000 units of new supply scheduled for completion in KLCC by 2020, there is not likely to be an upswing in market activity and pricing in the near term.

In Bangsar, units of between 1,000 and 1,499sq ft remain popular, accounting for 30% of secondary market transactions last year. As for capital value, high-rise residential properties remained stable year on year.

Mont’ Kiara’s secondary market saw more activity last year despite experiencing lower transaction volume. More than 60% of secondary transactions last year consisted of high-rises of 1,500sq ft and above.

To know whether the property market is actually in trouble or not, it’s best to keep following articles where actual transacted prices are revealed and to look at the usually popular areas because they will reflect the actual demand vs supply.

People keep saying its a buyers’ market but this depends very much on the owners ability to hold on and demand market price. Stop waiting and start identifying. The pricing in that location that is in hot demand will never fall to the price speculators want.

Secondly, larger sized units will always be a premium because prices are getting ever more expensive. Not many developers build big units because the final price is likely to be super high.

They will only build smaller units and this explains why prices for larger units will get stronger with passing time. There’s little need to even debate on landed versus high-rise.

Look at the newest landed properties and the actual built-up in sq ft. Anything above 2,000sq ft was many year ago. These days, it’s usually below 2,000sq ft. Happy understanding.

This article first appeared in

Charles Tan blogs at property investment site kopiandproperty. He dislikes property speculators and disagrees that renting is better than buying. He thinks it’s either property or poverty. He is presently the CEO of an auction house auctioning assets beyond just properties.