5 things about Mont’Kiara and the market slowdown

Mont’Kiara is a familiar address in the Klang Valley for high-rise residential properties in the mid- to high-end price range. Remarkable capital appreciation of the properties in Mont’Kiara have been a boon for property investors in the past.

What about in recent times? No doubt the overall market slowdown of high-end high-rise residences in Malaysia has affected Mont’Kiara as well. But what the numbers show is that Mont’Kiara has held its own. 

According to EdgeProp.my’s sales transaction data, the average transacted price psf of Mont’Kiara’s high-rise residential properties were stable and only down by 0.42% and 0.41% year-on-year in 2016 and 2017, respectively. 

Based on transactions between 2012 - 2015, the average price of non-landed homes in Mont’Kiara has grown by 20.3% from RM596 psf to RM717 psf. The year-on-year growth in 2014 itself was almost 11%. 

However, from 2014 onwards till 2018, there was a marked slowdown with the average transacted price growing by only 6.43% over five years (from RM699 psf in 2014 to RM744 psf in 2018), a reflection of the overall market downturn.

But things seem to be looking up recently, with improvements in the average transacted price psf and transaction volume last year (2018). While such positive figures may indicate that the market could be recovering soon, property agents who specialise in Mont’Kiara areas are looking at the numbers with cautious optimism. Nevertheless, for the long term, they remain bullish about investing in Mont’Kiara properties.

Here are five things you should know about the current Mont’Kiara housing market:

1. Increase in transaction volume in 2018

Mont’Kiara saw some 707 residential properties transacted in 2018, a 36.7% increase from 517 transactions in 2017. 

According to Propstar Realty team manager Kevin Teh, there were more client enquiries and transactions in Mont’Kiara last year, especially after the announcement of the 5% hike in Real Property Gains Tax (RPGT) in Budget 2019 last November for the disposal of property priced above RM200,000, from the sixth year effective Jan 1, 2019. 

“It was no surprise to see more transactions in Mont’Kiara last year-end because of the RPGT announcement. Overall, the Mont’Kiara residential property market has seen a slight improvement in 2018 compared with the previous year,” Teh notes. 

MIP Properties team leader Freeman Woo says the Mont’Kiara market has been rather active over the past year, although the general market remained sluggish. In fact, he says the team has been closing deals in Mont’Kiara every week over the past one year. 

2. Asking prices down, transacted prices stable 

Besides the RPGT hike, Teh believes the higher transaction volume in Mont’Kiara residential properties was spurred by the slight reduction in asking prices. 

“Landlords and property owners are definitely more open to negotiate nowadays. I would say generally, asking prices have seen an average drop of 10% to 20% over the past few years. But the price drop is not too bad compared with other areas in the Klang Valley,” he notes. 
When it came to transacted prices however, Woo points out that Mont’Kiara homes have been holding up firmly. 

“Of course not all are transacted at good prices. About 10% of the overall transactions were most probably transacted below market price but those were mostly owned by foreigners who needed to let go of their units soonest possible when they decided to go back to their countries,” he says of the expat enclave in Kuala Lumpur. 

According to EdgeProp.my’s data, the average transacted price psf of residential properties in Mont’Kiara stood at RM744 psf in 2018, up 4.6% from RM711 psf in 2017 following minute year-on-year dips in 2017 and 2016. 

3. In 2018, the highest transacted price was RM1,479 psf 

Woo and Teh both describe Mont’Kiara as a “fairly active and stable” high-rise residential market which seems to be resilient against the general tide of low market sentiments among consumers. 

Among the transactions last year were several multi-million ringgit deals. The most expensive transactions in 2018 in the area were eight units at Kiara 9 which were sold at an average of RM1,479 psf or RM3.23 million.

Kiara 9 is a mixed residential development completed in early 2011 by Kina Bijak, a subsidiary of Mitrajaya Holdings. It comprises landed villas and a 41-storey condominium with built-up sizes ranging from 1,661 sq ft to 2,694 sq ft. It was priced at around RM790 psf when it was first launched in 2008.

Besides Kiara 9, Verve Suites and Arcoris Mont’Kiara were also selling at above RM1,000 psf in 2018. Verve Suites, a luxury fully-furnished serviced apartment with built-up sizes of 462 sq ft to 1,394 sq ft in Mont’Kiara recorded an average transacted price psf of RM1,101 last year, while Arcoris Residences at Arcoris Mont’Kiara, the latest mixed development in the neighbourhood recorded an average transaction price of RM1,050 psf for units with built-up sizes ranging from 850 sq ft to 2,000 sq ft. 

4. Yet, some units are going for RM500 psf and below...

Mont’Kiara is often considered a prestigious address that offers luxury residences. On the other hand, more affordable high-rise homes do exist here. 

According to EdgeProp.my’s data, there were five projects selling their high-rise homes at RM500 psf and below in 2018. The projects that recorded the lowest average selling price psf based on transactions in 2018 were Lanai Kiara and Aston Kiara 3. Both low-density condominiums recorded an average selling price psf of RM445 psf in 2018. 

Lanai Kiara is about 20 years old while Aston Kiara 3 was completed mid-2011. Teh expects to see more such value-buys in Mont’Kiara this year. “It is a buyer’s market now. If you have a million ringgit, you get a lot more choices in Mont’Kiara now compared to five years ago when you may only get a small unit. But now, with the same amount of money, you can get a family home,” he says. 

5. The worst is probably over 

Woo believes the worst is over for the Mont’Kiara property market slowdown. “I think the worst is over, and we can see signs of recovery such as more requests and enquiries for buying, selling and renting. Investors are also coming back to the market,” he says.

Woo also foresees that Mont’Kiara will see better sales volume and higher transacted prices this year due to better market sentiments about properties in Mont’Kiara. 
Teh however, has a more cautious view. Although he does not deny that Mont’Kiara has held up well against the market downturn, he expects the Mont’Kiara market to be stagnant in 2019 due to more incoming supply. 

“More residential units from Agile Mont’Kiara and Kiara 163 are expected to be added to the market this year and these new units will need some time to be absorbed before we can see the overall price bounce back,” Teh shares.
 

This story first appeared in the EdgeProp.my pullout on March 15, 2019. You can access back issues here