Condo prices in Mont’ Kiara, Sri Hartamas hit new high

Artist's impression of II Mont Kiara

The high-end property boom of the last few years, particularly in the top two prime locations in the Klang Valley – KLCC and Mont' Kiara/Sri Hartamas, has made it increasingly more expensive to own a condominium, serviced apartment or landed property.

In the case of Mont Kiara (MK) and its adjacent Sri Hartamas, an affluent neighbourhood popular with expatriates, prices of newly launched condominiums have shot up to over RM800 psf with some hitting the RM900 psf mark!

In the early 1990s, condominiums built by the Sunrise Bhd Group such as the MK Pines and MK Palma were around RM300 psf.

Despite fears of over building, soaring prices and congested vehicular traffic, this neighbourhood has continued to attract both investors and home owners, Today, it has evolved into a very self-contained, much sought-after residential enclave of top quality condominiums, bungalows/villas and other high-end residential properties.

As Henry Butcher Marketing Sdn Bhd chief operating officer Tang Chee Meng said there was now a greater variety of property types available compared to the early days of Mont' Kiara's development.

“While the earlier developments have average built-up areas of 1,200 to 1,800 sq ft (MK Pines, MK Palma and Vista Kiara) catering to small and medium sized families, the newer projects that have been launched in Mont' Kiara and Sri Hartamas offer a greater variety of unit types catering to different budgets and preferences,” he said.

They range from very small studio units of 400 to 600 sq ft (Mayfair and Dorchester) catering to singles; small units of 600 to 800 sq ft (Verve Suites, One Kiara) catering to singles and newly married couples; standard sized units of 1,000 to 2,000 sq ft units (One Kiara, Kiara 3, Cerian Kiara) catering to small and medium sized families and large units of 2,000 to 3,000 sq ft units (11@MK, Seni Mont' Kiara) catering to more well off families.

“There are also the super large units of above 3,000 sq ft (Matahari, MK10) for the well heeled. As the prices of the condominiums in Mont' Kiara and Sri Hartamas have gone up, the profile of the buyers also indicate that they are now of a higher income group,” he said, adding that condominium prices in Mont' Kiara have gone up significantly.

“While the prices of condos in Mont' Kiara used to be around RM300 to RM600 psf in 2006, newer projects launched since 2007 have pushed the prices to new threshold levels of RM600 to RM900 psf.”

“Some of these new projects are Sunway Vivaldi (RM800 to RM900 psf), Palazzio (RM840 psf), and Matahari (RM800 psf). Generally for a RM1mil property, based on an 80% loan and an interest rate of 5% per annum for 20 years, the qualifying monthly income is RM15,000 whilst the monthly income required to qualify for a 80% loan for a RM2mil home will be RM30,000,” he said.

According to Tang, the nearly sold-out Kiara 1888 that Henry Butcher marketed has risen 25% to 30% although it is still under construction while Kiara 9 has been released at new benchmark prices.

Meanwhile, the current economic uncertainties have seen some people adopting a “wait-and-see” attitude. There are also signs of over-building in many places including Mont' Kiara.

Tang agreed that while rentals have remained stable, vacancy rates appeared to have increased due to the large number of units that have been completed in Mont' Kiara.

“One of the chief concerns of potential investors is the fear of oversupply of condos in Mont' Kiara and whether the rental market will hold. Another concern is the worsening traffic congestion due to the increased number of residents in the area,” he said.

With scarcity of land in Mont' Kiara, industry observers believe that developments in Mont' Kiara will spill over to Segambut.

“We believe that in years to come, Mont' Kiara and Segambut will be linked up in a seamless corridor by the new developments. For the moment there is still a price disparity as projects at the Segambut side are still significantly cheaper. In future this price disparity may be narrowed although we believe that there will always be the price differential,” he added.

Tang said overall the property market would be soft, in view of the political uncertainty as well as the slow down in economic growth but the Mont' Kiara/Sri Hartamas area would still continue to attract interest.

“However, investors are now more cautious and will be more selective. Projects with more innovative concepts undertaken by reputable developers will still be able to attract interest, provided that investors are convinced that the pricing is fair value vis a vis the design and quality of the project,” he said.

By The Star (by S.C.Cheah)