Condo in Mont Kiara

Previouly, we touched on whether KL condo is priced too high, of course it is all subjected to individual intrepretation and projection. However, we do find some good condo with good architectural design which we feel is value for money when many new launching in that area are already in the region of RM700-00 per square feet. One of them is Casa Kiara II in Mont Kiara which was launched earlier this year, excellent design with all 6 corner units arranged like bangalow or semi-D in the sky, 4 high speed lifts to service the 37 storey condo, low density of only 206 units in a single block design.

Location:Jalan Kiara 5, Mont Kiara, Kuala Lumpur, Malaysia
Type of Property:Single Block Condominium
Developer:Amisia Sdn Bhd
Turnkey Builder:Sunway City Berhad
Project Manager:Dijaya Corporation Berhad
Tenure:Freehold
No. of Units:206

a) Typical unit (202 units) : (3+1 rooms, 3 baths)

b) Penthouse unit (4 units) :(4+1 rooms, 6 baths)
Built-up areas:

a) Typical unit : 1,375 sq.ft to 1,574 sq.ft

b) Penthouse unit : 3,126 sq ft to 3,219 sq.ft
Selling price:RM580,000 onwards

Location plan :

Site layout :

Floor Plans :

All units have been well designed with windows all round especially type A1 & A2 which share very little common wall with other units and they are like banglow whereas type B1 & B2 are like semi-detached.

Link to developer web site

Is the KL condo overpriced ?

A few recent newspaper articles reported that the price of condo within the KL city has continue to set record height and it was reported that some of the high end condo are being sold at RM2000-00 per square feet. Most of the condo have registered increase in price compared with their original price during the initial launches, some have increased by 100% from RM1000-00 per square feet during launching to a reported of RM2000-00 per square feet at current market value.

The question is whether the selling price of RM2000-00 per square feet is justifiable. There is no straight forward answer to it as it all depends on from which angle one look at it. If you compare the price with prices of condo in other countries such as Singapore or Hong Kong, then the price of RM2000-00 per square feet is still cheap by comparison. If the price is going to be affected by the effect of globalisation where there will be a lot of cross investment by citizen of various countries where many foreigners will invest in Malaysian property and if the Malaysian government continue to promote foreigner buying of Malaysian properties, then one can expect the prices of KL condo to rise further as the balancing act of money flowing to cheap properties in Malaysia or rather properties in Malaysia that is still considered cheap by many foreigners will result in demand that will sustain the rise in price of KL condo.

As for ordinary Malaysian, how should they react to the current pricing of KL condo, I guess it all boils down to return. If a condo can generate reasonable financial return, then it would be a worthwhile investment.

To quote an example, lets look at condos in the popular Mont Kiara area which are investor favourite. The average rental at the moment in Mont Kiara is about RM3-00 per square feet per month, monthly maintenance charges is about RM0-30 per square feet, therefore the net rental after taking into the account the monthly maintenance charges is RM2-70 per square feet.

Rental return for whole year = RM2-70 x 12 = RM32-40 per square feet.

Assuming an investor purchase a condo in Mont Kiara at price of RM400-00 per square feet by cash and assuming he spend additional RM50-00 per square feet in renovation and furnishing bearing in mind only furnished condo can fetch gross rental of RM3-00 per square feet per month, then his cost of purchase would be RM450-00 per square feet.

A return of RM32-40 over a purchase price of RM450-00 per square feet would be equivalent to return of

32-40 x 100 / 450 = 7-20%

which would be sufficient for ordinary investor. However the calculation does not take into account the quit rent and assessment charged by land office and local council respectively, the actual return could be slightly lower than the above.

From the above illustration, the higher the purchase price, the lower will be the rental yield or the monthly rental would have to be increased to maintain yield.

However, not all condo are purchased for rental yield, some are bought for own occupation because of their spectacular city night view, some are purchased for their prestigious address, some are purchased for flipping over the short term for capital gain. Some investor purchase because they fear that if they do not purchase now, they would not be able to afford it in the future.

If you are purchasing one for investment for rental return, then it would be wise to do some calculation before the actual purchase.

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Why having a web portal is a must for housing developer

Most of the companies today are equipped with a web site, some use it to disseminate company information while other use it to promote their products. Web site is particularly useful for housing developer to introduce their new project to complement the traditional or conventional ways of advertising through the newspapers, radio or TV. By using web site to disseminate information about the new housing project, developers are able to advertise in a very cost effective way as advertising over the web is very much cheaper compared with the conventional media, not to mention the worldwide exposure 24 hours a day, 7 days a week, effectively everyday until the information is taken down from the web.

In today globalised world where many foreigners invest in Malaysian properties, many potential buyers could actually gather as much information about the properties before they actually visit the showroom. The case mentioned does not only apply to foreign buyer, but also apply to out station buyer from within our country. A typical case would be if a person from Penang interested to purchase a property in Kuala Lumpur, he or she can surf the web and visit the web site of the developer and view as much information as possible before making a trip down to the showroom to visit the actual location. When the potential buyer visit the showroom , he or she may already be very familiar with the subject property and thus saving the sale person a lot of time and effort as the sale person is saved from explaining the various details.

In fact, there are many cases where potential buyers have already got a decision in their mind and they visit the showroom just to close the deal. Therefore it is extremely important for developer to include a well planned web site in their marketing strategy as having a good web site will surely make selling much easier.

Grace period or interest free period

After one is satisfied with the selection of the property he is intending to purchase, signing of the sale and purchase agreement is the next obvious step. If the property that one intend to purchase is already in the advance stage of construction, always remember to negotiate for an interest free period or grace period to allow yourself time to source for a loan as the time taken for

1. selection of loan

2. loan documentation

until the fund is released by the financier bank can be quite long. Therefore it is advisable to negotiate for a minimum of 60 days or 90 days. The interest free period is particularly important if the construction of the property is already in advance stage and if the buyer is taking maximum loan of 90% as one can expect that upon signing of sale & purchase agreement, the developer will flood the buyer with a series of progress billing that will be due 21 working days after issuance of billing that make it to about a month including the non-working days and the late payment interest is normally 10% which is higher than the loan interest rate which can be as low as zero for the first year for some loan package from certain bank. Without the interest free period, the buyer would most likely be charged hefty late payment charges as the amount of billing can be as high as 75% of purchase price which the interest calculation is based on.

However if one is buying a property where construction has yet to begin, then the issue of interest free period may not be critical but as buying a property is not something that one do very often, why not exercise your right to as much as possible before you sign above the dotted line.