Property Talk Monday March 5, 2007

Property Talk Monday March 5, 2007


Better sales recorded, say developers


OVER the past two to three months, the property market seemed to have come alive after a generally sluggish 2006. The recent run-up in the stock market is said to have fuelled investors' confidence and they have parked their winnings into property.

My assumptions are based on feedback from developers who have reported better sales, the launch of more new projects as well as improved sub-sales with quite a few new owners renovating their houses.

One developer in Semenyih managed to sell nine of its 50-odd completed houses within a month or so recently, after experiencing very slow sales in 2006.

I also noticed a rather strange thing at a recent auction.

There are more people bidding for very cheap properties and in a very aggressive manner.

Take an auction in Jalan Kampung Pandan, Kuala Lumpur, last Tuesday.

There were six bidders for a low-cost ground floor flat at Pangsa Rakyat in Mantin, Negri Sembilan, and 14 bidders for a medium-cost, leasehold Birchwood Court apartment in Bandar Tasik Puteri, Selangor. The original purchase prices of both units were about RM42,000 and RM80,000 respectively.

The reserved price of the three-bedroom, freehold Pangsa Rakyat flat (615 sq ft) was RM8,000 while that of the Birchwood Court three-bedroom apartment (784 sq ft) was RM15,000.

When the auctioneer called the first bid for the low-cost flat at RM8,500, a woman who had earlier told me that she was planning to buy the flat for herself shouted: “RM15,000!”

That took all the other bidders by surprise as she could have upped the bid by another RM500. As the other bidders did not challenge her, she won the bid.

When I asked her why she jumped the bid, she confessed: “I am an estate agent and my client told me to bid at RM15,000.”

It is a good buy as the low-cost project is one of the nicest I have seen and it has three large fields with nice basketball courts, playground equipment and even gazebos.

This project is beside the proposed Kuala Lumpur-Seremban Highway that is under construction. The College Heights bungalow development is next door.


A ground-floor low-cost flat in Block G. Pangsa Rakyat, Mantin, was recently auctioned for RM15,000. The bid jumped from RM8,000 to RM15,000 in one round.
The same thing happened for the Birchwood Court apartment. From a reserved price of RM15,000, the bid suddenly jumped from RM16,000 to RM30,000 after two rounds at RM500 per bid. The unit was sold for RM33,000.

I had attended no fewer than 20 auctions over the past four years or so, and this is the first time I have come across such an aggressive bid for cheap and “cold” properties that would normally not attract any bidders.

Who are these winning bidders? Are they investors who have made some money from the recent “bull run” or are they astute and well-informed investors who realise a good buy and are determined to buy a cheap property and keep it for capital gain?

South Malaysia Industries Sdn Bhd (SMI) assistant general manager Matthew Ng agrees that the bullish stock market over the past few months has created a “good and confident” feeling among house buyers and people realise that the days of quick “fire sales” may be over.

Ng said SMI's Sterling condominium project in Kelana Jaya had also experienced better sales since December last year.

“Traditionally, year-end sales are slow. This is because people are busy taking vacation and preparing their children for a new school year between December and February.

“However, instead of single-digit sales, we are enjoying double-digit sales with 20 to 30 units sold per month.

“Our Sterling sales are still very strong and we expect the project to be completely sold out by the middle of this year. It should be completed by the first quarter of 2008,” he said, adding that the market was still very selective and projects in good locations achieved better sales.

“Some people want to buy something bigger than they can afford and this is where we package our products to make them affordable with down payment as low as RM5,000 per unit,” he said.

Bukit Kiara Properties Sdn Bhd chief operating officer Vincent Lim said 80% of the Verve Suites' first block had been sold, with the rest being bumiputra units. “We plan to launch the second block in the first or second quarter of this year,” he said.

Sunrise Bhd's Mont Kiara 10 is also one of the projects that has seen good sales despite the soft market when it was launched late last year.