Several years ago it looked like Ampang would continue to gradually slip, relative to the other exclusive residential suburbs of Kuala Lumpur such as Bangsar and Damansara Heights. The area’s traffic and the potential relocation of the embassies there to Putrajaya were concerns.
However, what we have instead seen is a remarkable revival due to a number of factors.
The economic activities and demand for luxury condos in the KLCC area, for one, have directly benefited neighbouring Ampang and encouraged the building of lowrise luxury condominiums benchmarks against the KLCC. And then there is the up-and-coming Duke Highway that will make access from suburbs of Mont’ Kiara, Damansara and Petaling Jaya significantly easier.
Traffic is still the issue, but with Ampang becoming increasingly vibrant, people are prepared to accept it. With regards to the embassies moving to Putrajaya, there is still no sign of it happening and they do not play as influential a role as they once did since the KLCC has further fused with Ampang, making demand for properties in the area increasingly KLCC-centered.
Despite recent price increases, rental yields in Ampang are still very strong due to largely to the presence of its growing expat community.
Ampang Hilir and U-Thant – the closest of Ampang’s enclaves to the KLCC – are in short of supply of residential units and in my view, this will remain for some time to come. Their closeness to the KLCC and the embassies, the presence of the Duke Highway, the fact that these enclaves cannot expand, and their demand from the expat market which support rents make their properties great long-term investments.
Damai and Titiwangsa are a little further out but now becoming sought after as Ampang Hilir and U-Thant become increasingly expensive.
Deeper down Jalan Ampang are Ukay Heights, Taman TAR and Hillview. In normal traffic, these places area around 20 minutes from KLCC, but are supported by their proximity to the International School of Kuala Lumpur.
Finally, Kemensah Heights and Zooview had a very slow start but are now picking up with number of gated communities springing up in them. Rental yields are excellent, supply is limited and demand looks set to grow.
For investors, the tip is to buy as close to the city centre as your budget allows.
Situated on one of the last parcels of freehold lands in Petaling Jaya North growth area along the Sultan Abdul Aziz Shah Airport Road, and within the vicinity of established residential and commercial areas of Damansara and Kelana Jaya, the 299-hectare Ara Damansara (PJU1A), is fast joining the league of the preferred address in exclusive townships, in the Klang Valley.
The house prices have been appreciating steadily from RM380K to more than RM500K in 2008. Will the price increase further?
The answer is yes, considering the limited supply of house available for sale in Ara Damansara and it will be like the next Bangsar. By the way, there is no auction property available in ARA DAMANSARA!
I found a top 10 list of the most expensive cities in the world from AOL website. I wonder what is KL world ranking at the moment.
1. Moscow. Cost of living index = 134.4 With over 50 billionaires rumoured to be living in Moscow, it's no wonder the trickle down effect has started to flow. The cost of a coffee is £3.14."The appreciation of the Rouble against the US Dollar, combined with ever-increasing accommodation charges, has driven up costs for expatriates in Moscow," said Yvonne Traber, research manager and senior associate at Mercer.
2. London. Cost of living index = 126.3 We've all heard the tabloid chant of 'Rip-off Britain!'. Well spare a thought for Londoners, who bear the brunt. With average property prices hovering at £350,000, that's around 10-12 times the average rate of income."Steep property rental costs, together with the strengthening of the British Pound compared to the US Dollar, have contributed to the city's high ranking," commented Yvonne Traber.
3. Seoul. Cost of living index = 122.4 With just a 3.4% unemployment rate, and the strength of the Won against the Yankee dollar, Seoul is flying high compared to New York standards.
4. Tokyo. Cost of living index = 122.1 A two-bedroom unfurnished apartment in Tokyo costs around £2,110 to rent per month, proving that the land of the rising sun is also a place of rising costs.
5. Hong Kong. Cost of living index = 119.4 Hong Kong may be the destination for affordable electronic goods, but high property prices keep the former British colony high on the list.
6. Copenhagen. Cost of living index = 110.2 Heralded for its high standards of living and atmosphere of social equality. But a burger costs £4.99...
7. Geneva. Cost of living index = 109.8 Perhaps known for its private - ahem - 'offshore' banking services, Geneva holds some estimated £500billion, which goes to prove that money simply attracts more money. Some items in Geneva shops are thought to be as much as 10% more expensive than in Zurich.
8. Osaka. Cost of living index = 108.4. Once Japan's major economic centre, Osaka is still an expensive place to live, which makes the seemingly low average income per head (£13,318) a mind boggle.
9. Zurich. Cost of living index = 107.6 Fortunately for its inhabitants, some of the highest wages in Europe are paid in Zurich.
1o. Oslo. Cost of living index = 105.8 Based on a cost-of-living score for New York set at 100, prices in Norway's capital are a little ripe compared to the Big Apple.
1. UK housing market is currently weakening and in the middle of a price correction after seeing incredible capital appreciation for the last 10 years. A min of 10% - 15% reduction in housing prices between now and mid 2009 is widely expected according to economists and property experts. Going by that measure, then by late 2008 and early 2009 would be a good time to enter the market and take a position. Property market generally operate in cycles and falling house prices must be seen in context on the backdrop of seeing a rise of 179% in the past 10 years. Prices has risen from an average price of £70,000 in late 1997 to £195,000 at today's price. So a fall of 10% is not really that bad. Plus house prices tend to increase in line with inflation. In 10 years time, there is a potential increase of another 50 - 80% from today if we want to be conservative.
2. UK economy macro economic fundamentals are still good despite weakening house prices and increased in living costs to weather the credit crunch crisis. UK is still showing low unemployment numbers (830,000 people are registered unemployed) and credits are still cheap (average 6-7.5% interest rates). More importantly, the economy is set to grow by 2-2.25% in 2008. It has been showing a positive growth for 16 years continuously now. Although domestic consumer and investment spending activity is expected to moderately slow down, the rest of 2008 is expected to benefit from Government spending (Olympic related developments, £50billion bond exchange scheme with banks, increase in personal tax allowance level and basic rate tax cut incentive from 22%-20%) to boost the rest of the 2008 economic activity. Richard Branson as reported in Sky news on Saturday 17th May as saying he was optimistic about the UK and world economy. He said: "We have not found less people using our trains, planes or mobile phones. It seems to be a crisis mainly affecting banking." I work with a UK Home Retailer (a mix combination of Ikea and Harvey Norman to put into Malaysian context with a £1.6 billion sales turnover) and can say that we too are not seeing a massive falls in our sales mostly help by the early warm weather in May. As a retailer selling products for the home like kitchen units,bathroom suites, tiles,flooring, soft furnishing and furnitures, we are very close to the consumers and would be the first in the frontline to see falling sales due to lack of customer spending. So far we are not seeing a long period of falling sales trend yet since 2007.
3. Strong demand for residential accommodation is higher than ever due to inward immigration from East Europeans from Poland, Croatia, Hungary, Slovakia and Romania. The demand is growing steadily for rented accommodation in suburb city outside London and in London area. Also, the number of people in UK remaining single and divorce rates are getting higher than ever adding to the demand for studio/1/2 bedrooms properties. Add the potential upside of capital appreciation in properties, armed with a deposit of 20%-25% and the rental income to support the mortgage costs, Malaysian investors will be in good position to minimise the risk of negative equity. In addition, basic demand and supply theory, will help shore up house prices and avoid a massive fall in housing prices. It is a well known fact that UK current housing stock and newly built properties is still not enough to meet residential demand. Lack of housing stock supply driven by complex planning policies will continue to prevent house prices to fall magnificently. With the current slowdown in the market, developers are putting a brake on new housing developments while they concentrate trying to shift existing developments. So this will further add pressure to housing supply further preventing the supply to catch up with demand. Lack of housing will continue to be an issue and will not go away anytime soon. This is good news from an investment point of view as long as supply cannot meet demand, prices will continue find new higher level of equilibrium between demand and supply.
4. Not many know this but Malaysian who is not a resident for tax purposes, do not have to pay capital gains tax no matter how many number of properties you sold and profit from. Your profit is tax free. The only tax that you have to pay is the rental income. But guess what..being a Malaysian and as part of the Commonwealth Nation, you are accorded the same entitlement as UK resident to an income tax personal allowance of up to £6035 (2008 rate) which is tax free. So if you have a property and the rental income of £8035 per year. Your tax liability is only for the income of £2000. Applying the rate of 20%@2000 = £400 is how much you have to pay. This you can further offset the tax liability by further deducting expenses paid for property maintainence, estate agent fee and other property associated cost. So most likely you do not have to pay tax or your rental income at all.
5. Weak sterling currency. Yes the pound is dropping and will continue to be weak. This time last year it was about RM6.8 to £1. Now it is RM6.2 to £1. It will drop further (my personal view will be RM5.9 within 3 to 6 months time) as money investors are piling into gold, oil, commodity and popular currencies such as Euro/Aussie/NZ dollars to protect their wealth. As a Malaysian investor you will benefit not only from the housing price correction but also from the favourable cheaper currency rate when you enter the market. As long as your investment time horizon is to capitalise on capital appreciation in 5-8 years time, the weaker pound is negligible.
6. UK property is still affordable believe it or not. You do not necessary have to plough millions of ringgit to go for the high end properties. Average studio/1/2 bedrooms are price from RM350k onwards. Add 5% for lawyer fee, survey fee and mortgage fee. The best location to invest properties outside London are in Milton Keynes, Bedfordshire, Essex, Kent, East Anglia, Northampton, Oxfordshire and Berkshire. Traditional University cities such as Cambridge, Oxford, Nottingham, Sheffield, Liverpool, Manchester, Warwick, Cardiff and Birmingham will always be a good location. Investing in properties for student lettings can be very profitable strategy if it is managed professionally.
So...baaaaaaaasically, despite the weakening housing market at the moment, UK is still a credible choice for residential property investment for potential Malaysian buyers. Lack of housing stock will continue to shore up housing prices and a growing demand in rented accommodation will ensure rental rates will continue to provide good income for Landlords. Malaysians enjoy tax allowance on rental income and do not have to pay capital gains tax. Properties in areas outside London are still affordable and some cities make excellent buy especially in traditional university cities. Continue trend of weak sterling performance in the currency market help to increase Malaysian purchasing power. Strong Uk economic fundamentals and global growth, will not see a housing crash as seen in the 1990's. A housing price correction is underway currently and is expected to creep up again in mid 2009 for another boom until 2013 (after London Olympics which will be a good time to exit and enjoy your profits!).
I'm not so familiar with Ampang - I live West of KL and I know the Western areas better than the Eastern side. From what I've heard though I'm glad I don't live in Ampang and hardly ever venture out there! All I've heard about it is that it's so congested with traffic. And it's not particularly attractive from what I remember - large roads full of traffic, lots of concrete, not much greenery. We've got some friends who live out there and they don't go out much because they say there are very few non-local places to eat or good places to go shopping.
In contrast I live near Mutiara Damansara and I just love all the facilities there - shopping at One Utama or Ikea, eating at the Curve, there's just so much to do around here! And Bangsar is only 10 minutes away if I'm bored with my usual shopping grounds or restaurants.
Lately, I came across many reports and comments concerning the outlook of Malaysia's property landscape in view of the US sub-prime crisis. It is interesting to note there is a vast variation in thoughts over this issue. Frankly, even though I am "phsically" only a few months old in the real estate industry as a Property Negotiator, I have been an avid follower of any kind of property news.
A re-cap of a report in the Star on 19th April, 2008, it seems that property buyers and investors are cautious due to increasing inflationary pressures amidst the US sub-prime crisis. However, properties in strategic location could be buffered from such setbacks. As all of us may know, the first criteria in property procurement is Location, definitely Location, and absolutely Location!
This reminded me of a 12 hour seminar I had attended yesterday by a real estate guru from Australia, Mr. Steven Molnar. His first advice to us was Research, Research, Rsearch! Indeed, if we have done our homework well, I reckon we could still find and buy jewels amidst the increasing gloomy outlook. As a matter of fact, many real estate gurus do propagate that the best time to pick up properties jewels is when a crisis occurs.
Bangsar feels a lot less exclusive than Damansara Heights as it's a lot more of a mixed neighbourhood with link houses and townhouses, condos, semi-ds and bungalows. There are great shopping facilities though - Bangsar Shopping Centre, Bangsar Village, to name but a few - and a great nightlife! Who shops in Bangsar Village II - I wonder! Sooooo upmarket...it looks empty all the time.
My favourite part of Bangsar is Pantai Hills - some nice bungalows there with amazing views. I don't like the Taman Pantai area so much - it feels a bit messy and it's been ruined by that big highway they built just on top of it.
Mont Kiara - I guess you might like it if you're into concrete jungles... Actually it's not so bad - I guess it's reasonably green and the condos look reasonable nice and there's a good selection of cafes and restaurants. But it's so incredibly overpriced! Does anyone live there apart from Japanese people who want to feel like they're at home and expat parents who send their kids to the international schools?
Rules For Overseas Investor in Malaysia From: Malaysian Estate.com
Non-Malaysians and foreigners must obtain the consent from the state where the property is located before the purchase is considered lawful.
The Steps in the buying are usually as follows:
Step 1: The purchaser pays 2% deposit to secure the property so that the vendor is no longer allowed to sell to another party.
Step 2: A solicitor drafts a Sale and Purchase Agreement (SPA).
Step 3: The purchaser pays the remaining deposit to make up a total of 10% of purchase price until this stage.
Step 4: Complete the remaining payment of 90% within the next 3 months, although an extension for another 30 days may be obtained where an agreed interest rate is applicable on the outstanding sum.
Prior to purchasing a property, you should also provide for the following costs: Government stamp duty, valuation fee, legal fee, agent's fee (in some cases may be up to 3% of the property price), loan agreement fee (if applicable).
Recently Malaysia introduced relaxation on capital gains taxation. You should do your research and budgeting properly in line with your intended investment holding period prior to making any commitment to purchase.
If you are a foreigner and you hold the property for over 5 years, you can reduce the 30% capital gains tax to just 5%.
I have spent 3 months living in Bukit Bintang in the KLCC. It has been an interesting experience.
Before I lived in the KLCC I thought it would all be about endless traffic jams, pollution, and noise, and it would be a nightmare.
Well, there are all of those things, but after 3 months in Bukit Bintang, I am considering getting an apartment somewhere in the city - perhaps Marc Residence. And I wouldn't have believed that I could ever be interested in buying a place for myself in town.
Living in the KLCC is just so convenient - everything is so close - I think best to not use car and use LRT, taxis or best is to walk - and that means the traffic problem is not such a big problem any more.
And all the best restaurants, decent clothes shops, etc... are in the city centre, and if you're interested in the KLCC you probably work there too - so not much of a commute to work. And there is a really good mix of people too - lots of tourists, international businessment etc... so it's interesting. It's easy to have meeting with other city boys too - all the big shots are in the KLCC.
Living there is great, but I wonder if prices are going to stop shooting up soon? I'm worried about buying at such dizzy heights!
A luxury 5 star service apartment & Convention Center. Huge swiming pool offering an experience of a lifetime. Fully furnished, huge wide panoramic view of KL city and the great and beautiful Genting mountains views equipped individually controlled air-conditioning, 29-inch TV Hi-fi stereo, VCD, refrigerator, long bathtub and private standing bath both separately, paintings, lighting fixtures, wardrobe, kitchen cabinets microwave etc, There are lots of spacious area in the apartment. The best part is ofcause everything is ready and its a perfect move in condition. More than 15 floors of shopping offering an experience of a lifetime.
High demand on rental and rental returns anytime This service apartment is a dream come true for any investor.
With a huge roller coaster running across the shopping floors. With I MAX cinemas and lots of fine dining restaurants to chose around and monorail rite at your dooorstep imagine the conveience to move around from places to places without any issues rain or shine etc.......
