Kota Damansara non-landed housing market gains momentum

LOCATED adjacent to Petaling Jaya’s Mutiara Damansara and Tropicana, and nearby Sungai Buloh, lies the 4,000-acre township of Kota Damansara. Initially developed by the Selangor State Development Corp (PKNS), it is now a bustling township that has become a magnet for homebuyers.

The township offers various property types from landed to high-rise residential properties to industrial, commercial and retail. The residential properties in the area have shown steady capital appreciation since the early days of the township’s development.

Despite the property market slowdown in the last two years, residential property prices in general are holding although recent transaction volumes have shrunk. Data from the National Property Information Centre (Napic) collated by TheEdgeProperty.com showed that a total of 278 high-rise residences and 102 landed homes were transacted last year in Kota Damansara.

Prices of non-landed residential properties have continued to rise steadily. This could be due to the strong demand for the mid to medium high-end condominiums and apartments in the area.

According to TheEdgeProperty.com’s analysis of transactions for non-landed homes in Kota Damansara from 1Q2012 to 1Q2016, the average transacted price of around RM237 psf in 1Q2012 had jumped 73.8% to RM412 psf in 1Q2016.

In terms of absolute price per unit, Cascades Residences, I Residence and D’Shire Villa recorded the highest selling price in the non-landed residential segment with a maximum selling price of above RM700,000 in 2015.

Cascades Residences had the highest selling price of RM780,000 for a 1,044 sq ft unit.

Landed homes on the other hand have seen more price fluctuations and of late, their average selling price psf seems to be trending downwards. The average selling price of landed homes in Kota Damansara seems to be hovering around the RM400 to RM480 psf range since 2012. The average price psf was RM433 in 1Q2012 while in 1Q2016, it was down slightly to RM417 psf. Of note is that the psf asking prices of Bayu Damansara and Sierra Damansara terraced homes had exceeded RM600 psf in 2015. Most landed homes in Kota Damansara are currently selling at RM800,000 and above.

Awaiting the commencement of MRT

Raine & Horne International Zaki + Partners Sdn Bhd executive director Lim Lian Hong says the Mass Rapid Transit (MRT) line will augur well for residents here.

The 51km Sungai Buloh-Kajang MRT Line, which will begin operations by the end of the year, will have two stations in Kota Damansara — namely the Surian station and the Kota Damansara station. “Traffic congestion is a problem here and it seems to be worsening. People are looking for alternative ways to commute to work — to save money and time,” he tells TheEdgeProperty.com.

“Owning a car incurs higher expenses as the owners need to pay for petrol, maintenance and insurance, not to forget the depreciation cost.

“A house may be a costly choice but if the house is within walking distance to public transport, it could save you the cost of owning a car and the precious time that you spend on the road. Time is money,” he concludes.

Acrehill Properties real estate negotiator Michelle Lee says housing prices in Kota Damansara have increased significantly in the past due to the spillover effect from Mutiara Damansara which is just 4km away from Kota Damansara.

“Good accessibility through highways and link roads between residential areas, such as the New Klang Valley Expressway (NKVE) and Persiaran Surian, has also attracted people to stay in Kota Damansara,” she explains.

Bargains in landed housing segment?

However, Lee says the landed housing market has seen prices moving to more realistic levels lately. “Owners are asking more realistic prices as the market weakens. Prices of terraced homes in Bayu Damansara and Damansara Emas have dropped from RM1 million to around RM850,000,” says the negotiator, who specialises in Kota Damansara’s landed housing market.

Lee says homebuyers and investors can look out for some good bargains now due to the soft market.

Although the pace of growth has slowed recently, MIP Properties senior negotiator Dave Soh believes demand for Kota Damansara’s residential properties will remain strong in the long run.

“Property owners are waiting and hoping for better pricing when the MRT is completed. Most owners anticipate property prices in Kota Damansara to surge again after the MRT kicks off and many of them are holding back their plans to sell their properties for now,” Soh explains.

On the other hand, there are potential buyers who are taking their time shopping because besides looking out for good deals in the secondary market, they are also eyeing new property launches near the MRT stations that are offering attractive rebates or marketing packages to buyers, he adds.

For instance, Tropicana Gardens’ final block called Dianthus is offering rebates and units that come with air-conditioning as well as water heaters.

Dianthus is located opposite Dataran Sunway and next to Casa Indah 1 condominium. It offers 271 residential units with the selling price averaging at RM1,300 psf. The project is located right in front of the Surian MRT station.

Although housing prices have climbed over the years, there are still many non-landed residential choices at below RM200,000 in Kota Damansara.

According to TheEdgeProperty.com, the lowest average transacted price recorded in 2015 among non-landed homes was at low medium-cost apartment Gugusan Dahlia (RM75,000) located near the Kota Damansara National Registration Department. Next was the Section 7 Flats (RM78,909) which is located close to Sungai Buloh followed by Gugusan Cempaka (RM89,500) which is near an industrial area.

As for landed homes, there were still terraced homes being transacted at below RM500,000 last year including single storey terraced houses in Section 4 (RM235,000) and double storey terraced homes in Bayu Perdana (RM469,632).

In terms of rentals, non-landed residences in Kota Damansara enjoy decent rental yields ranging between 3.7% and 5.6%. Accessibility and convenience to various amenities are the two main factors that support the rental market in Kota Damansara.

According to TheEdgeProperty.com’s analysis, the top performers for rental yields in 2015 were Palma Perak & Puteri (rental yield of 5.6%), Kasturi Idaman (5.5%) as well as Cova Villa and Latan Biru which both enjoyed 5.3% yields. However, the rental yield for landed homes are mostly below 4%.

Challenging market

MIP Properties’ Soh says the landed housing market looks challenging for now as prices have gone beyond most people’s affordability levels.

“The leasehold title is also another concern for some homebuyers,” he notes.

In the long term, however, Lim from Raine & Horne believes that prices of landed homes in Kota Damansara will rise especially once the MRT starts operations.

Although some of the landed homes have exceeded or are nearing RM1 million, such as Section 6, Section 11, Damansara Emas and Bayu Damansara, they may still attract buyers who are looking to upgrade or prefer to drive to work compared with using the MRT.

But for high-rise residences, especially projects which are within walking distance to the MRT stations, they will remain attractive to both homebuyers and investors.

“Rental demand is strong in areas near MRT stations, such as for Casa Indah and Cascades Residences,” Soh adds.

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This story first appeared in TheEdgeProperty.com pullout on Sept 30, 2016, which comes with The Edge Financial Daily every Friday. Download TheEdgeProperty.com pullout here for free.