KUALA LUMPUR: The market outlook for the high end condominium segment in Kuala Lumpur remains lacklustre due to the current weak sentiment as the potential buyers and investors continue to adopt a “wait and see” approach, says  Knight Frank Malaysia.

In its Real Estate Highlights for the first half of 2016 issued on Tuesday, the global property consultancy said there was also a widening gap between supply and demand as well as mismatch in product pricing and affordability in the domestic market.

To counter this weak sentiment, developers have been been innovative with their “push marketing” strategies, it said.

Knight Frank Malaysia said more developers are marketing overseas as the weak local currency translates to attractive pricing and low entry level for foreigners. 

“While the impending completion of the LRT extension line and Phase 1 of the ongoing Sungai Buloh-Kajang MRT line by end of 2016 will continue to promote more transit oriented developments (TODs) along the transportation routes, more developers are also looking to expand their land banks into the suburbs to offer a wider mix of affordable housing products that cater to the domestic market,” it said.

The report also looked into  the market performance across the various property mix, comprising residential, office and retail; and highlights the trends and outlook in the four key markets in Malaysia, including Kuala Lumpur, Klang Valley, Penang, Johor Bahru and Kota Kinabalu. 

Knight Frank Malaysia said the completion of 1,033 units of high-end condominiums / residences from three projects during the review period brought the cumulative supply in Kuala Lumpur to 43,782 units. 

On prices and rental in Kuala Lumpur, during the review period, the asking prices continued to remain resilient in most locations.

Since last year, the rental market, particular in KL City, has been under pressure following job cuts due to the slump in crude oil prices and a slowdown in the economy. With heightened competition in a tenanted market, there are owners willing to compromise on lower rentals to secure and retain tenants.

“In the primary market, selling prices of high end condominiums / serviced apartments in KL City range from RM1,300 to RM1,900 per sq ft while branded residences are generally priced from RM2,000 per sq ft onwards. In KL Fringe such as Mont’ Kiara, new launches of condominiums/serviced apartments are priced from about RM800 to RM1,200 per sq ft.

“Prices in the secondary market continued to remain resilient. During the second half of 2015, small to mid-sized units (about 600 sq ft to 1,300 sq ft) in selected schemes such as ViPod Residences, The Horizon and The Troika were transacted at circa RM1,300 to RM1,800 per sq ft.

“Meanwhile, larger units (1,600 sq ft to 2,600 sq ft) in selected projects such as The Troika, Pavilion Residences and Quadro Residences, command prices from RM1,100 to RM1,600 per sq ft,” said Knight Frank Malaysia.