8.

0 PROPERTY MARKET ANALYSIS

8.1 OVERVIEW OF PROPERTY MARKET

According to the Jabatan Penilaian dan Perkhidmatan Hartanah (JPPH) the residential
property continued to support the overall property sector with 63% of market share
followed by agriculture property by 21.5% share. For residential properties, there were
197,385 transactions worth RM68.75 billion in 2018. This is a 1.4% increase in volume
and 0.4% in value. Performance of major states are as follows: Kuala Lumpur (up 6.8%),
Johor (up 7.8%), Penang (up 6.8%) while Selangor had a very marginal decline of 0.4%.
This is not a sign of a weak market. In fact, this number is holding up despite all the
negativities in the market.

Malaysian House Price Index (MHPI increase by 3.1%. Johor and Selangor both saw
the house prices rising by 5.6% and 3.3% respectively. By type, the terrace house price
index recorded the highest increase. The terrace house price has the highest increase
because these are landed and the supply is not as many as the high-rise. Commercial
sub-sector recorded a significant increase in market activity. It increases by 8% in terms
of volume and 16% in terms of value. (22,162 transactions in 2017 vs 23,936 transactions
in 2018 valued at RM25.44 billion in 2017 and RM29.51 billion in 2018).

Under the 2019 Budget, one of the most impactful events is launching a Home
Ownership Campaign (HOC) from 1st January 219 to 30th December 2019, which has been
extended until 31 December 2019. The campaign is planned to increase home ownership
among Malaysians, as well to reduce the number of unsold houses. The HOC 2019
incentives are as follows:

a. Minimum 10% discount on sale price houses listed under the scheme.
b. For houses priced between RM300, 000 and up RM2.5 million. 100% Stamp Duty
exemption on Instrument of Transfer up to 1 of the house’s price while the remaining
value is subject to a 3% rate.
c. 100% Stamp Duty excluded on Instrument of Loan Agreement.

In addition to the HOC incentives for the first time home buyers, there is a two years
(starting 1 Jan 2019 to 31 Dec 2019) Stamp Duty exemption on instrument of transfer for
houses priced up to RM300, 000, applicable to both purchases either directly from the
housing developer or from secondary market. Starting 1 July 2019, the incentive was
extended to high-cost houses up to RM500, 000 where exemption is limited to the first
RM300, 000 of the house price.
8.1.1 Selangor Property Market

Selangor has the largest state population in Malaysia where the total population is
5.79 millions.. Malays make up more than 50 percent (53.56%) of the population in
Selangor. The rest of the residents consist of Chinese (1.32%), Indian (12.12%) and other
ethnic groups (0.72%). Selangor also has good infrastructure. A wide spectrum of
residential properties makes up the landscape of this state. Popular residential properties
include terraced houses, semi-detached units, bungalows, serviced apartments, low-cost
flats and luxury condominiums.

According to the chart below, shows the total residential transaction from H1 2015
to H1 2019. The graph shows the residential market performance slightly improved
compared with the review period based on the volume and value of property transactions
recorded. But in last year before 2019, Selangor has seen of the sharpest decline in value
and volume of transaction. In H1 2019, the value of all types of property transactions
increased 11.5% worth RM11.685 billion while the volume of transactions had risen by
5.8% (24,043 units) in H1 2019 from a year ago. The increasing of the residential
transaction is led by units price between RM500,000 and RM1,000,00 which saw a 22.8%
increase in value in H1 2019 while decreased 21.6% in H1 2018. Residential units priced
between RM250,000 and RM300,000 has increase 10.3% in value compared to 9.2% in
H1 2018. The increase was due to high demand for affordable properties because
Selangor is one of the most developed states which has a good infrastructure such as
highways and transport, and . Besides that, the growth in transaction value may have been
supported by the Home Ownership Campaign (HOC) 2019, which provided several
exemptions and incentives for those purchasing homes during the year. That means home
prices have become more affordable due to not only the current stock level, but also due
to the income supplies in the affordable price buckets.
Chart 1: Volume of Residential Transactions H1 2015 - H1 2019

Chart 2: Value of Residential Transactions H1 2015 - H1 2019

8.1.2 Subang Bestari Property Market

Subang Bestari is a 500 acre residential area and commercial town. This area
would have more affordable housing due to the overwhelming demand and government
will allocate land for more affordable housing projects as there is high demand from the
public. It has a wide range of residential properties including terraces, townhouses,
bungalows, semi-detached homes, condos and medium-cost apartments. This self-
sufficient municipality is built on leasehold land. The first medium-sized apartment in
Subang Bestari is a Galaxy Series, made of 6-storey blocks with a total of 120 units with
a building size of 840 and launches from RM92,000. The project was followed by Seri
Kejora, a 5-storey medium-sized apartment and Seri Bintang, a low-cost apartment. The
Kejora Series has 254 units with a built-in size of 827 sf and launches from RM120,000.
Meanwhile, Seri Bintang has 432 units with a 750 sf build and launched from RM64,800.
Most of the development in Subang Bestari is made from a 2-storey terrace houses which
are name Karyawan, Budiman, Pendita, Nuri and Aman. All these houses have already
sold out and most of them are completed.

Besides that, this residential area is equipped with basic amenities for the
convenience of the residents. There are 2 schools located in the township, namely SK
Subang Bestari and SMK Subang Bestari. There are also surau, public halls, football fields
and recreation areas as well as the 15-acre lake. Also located at the entrance of the
neighborhood is the Petronas petrol station with an ATM. Subang Bestari is accessible via
the Sungai Buloh Road which connects to the Guthrie Corridor Highway (access to the
New Klang Valley Expressway (NKVE)), Subang Airport Road (access to the Federal
Highway), Jalan Kuala Selangor and Persiaran Mahogani (access to Kota Damansara).
 8.2 DEMAND

Location Land Area (sqft) Transaction Price (RM)

Apartment Seri Bintang, Subang 850.36 275, 000.00
Besari

U5/71A, Subang Bestari 850.36 320, 000.00

U5/45 (Seri Bintang) Subang Bestari 750.04 165, 000.00
U5/45 (Seri Bintang) Subang Bestari 750.04 250, 000.00

Apartment Subang Suria 778.00 185,000.00

Taman Desa Subang

Table 1: Property Transaction in Subang Bestari

The table shown above shows the determination of the property market analysis based
on the location of our proposed development located in Subang Bestari.Petaling. This data
is interpreted regarding on the transaction price relating to the land area (sqft) of the exact
type of house which already in the market. It shows that the average price for condominium
or apartment in Subang Bestari area is between RM130, 000 to RM345,000. The lowest
price is RM165,000 at U5/45 (Seri Bestari) and the highest price is RM320,000 at U5/71A,
Subang Bestari. According to that information, Subang Bestari area is suitable place to
develop the affordable housing and the area is a low density area with an average of
10,000 residents. This affordable housing targeted to the lowest income group and
medium income group where the median income for the community is RM7,904. The
affordable housing that is suitable to be built in that area whether affordable housing type
C or D where the income eligibility per month is RM3,001 to RM8,000.

Besides that, the area is placed at the strategic location to enable the lowest and
medium income to be closer to the schools, hospital and infrastructure. Despite that, this
area will be suitable for families and single individuals because there are several
infrastructures available such as schools university, multipurpose hall and is connected to
major highway. Therefore, Subang Bestari is high demand area from public because the
houses built in the city and closer to public transportation systems to give them better
acces.
 8.3 SUPPLY ANALYSIS OF RESIDENTIAL IN PETALING DISTRICT
Supply of Residentials Unit by Type in Selangor

8.3.1 Existing Stock

Supply of Residentials Unit by Type in Selangor

Figure 1 Supply of Residentials Unit by Type in Selangor

From the table of Supply of Residentials Unit by Type in Selangor above, it is recorded
that the number for Condominium/Apartment unit is increasing from H1 2018 to H1 2019 in
Petaling district. The highest recorded, which is at 169,037 units, thus far is in the H1 2019
whereas, the lowest is in H1 2018 which is 166, 281 units.
8.3.2 Incoming Supply

Figure 2 Incoming Supply of Residentials Unit by Type in Selangor

According to the Incoming Supply of Residentials Units in Selangor table, there is a slightly
decrease in incoming unit supply for condominium/apartment in the H1 2019 from H1 2018. The
highest number in incoming supply for the said unit is in H2 2018 which is recorded at 10,988
units. Meanwhile, the lowest incoming unit supply is in H1 2018 which is 8, 405 units.
 In this table below, the data shows the number of incoming supply units that have already
been started. Recorded that in H2 2018, which is the highest number recorded. There was a
depleting in number in H1 2019 which recorded to be the lowest.

Figure 3 Start Supply of Residentials Unit by Type in Selangor

8.3.3 Planned Supply

Figure 4 Planned Supply of Residentials Unit by Type in Selangor

Based on the Planned Supply of Residentials Unit by Type in Selangor table, the planned
supply for condominium/apartment unit in Petaling District has a slight decrease from H1 2018 tu
H1 2019. Highest planned supply for condominium/apartment unit is recorded in H1 2018 which
is 329 units. Lowest planned supply is recorded in H1 2019, which is 210 units.
 8.4 PRICE AND RENTAL OF RESIDENTIALS IN SELANGOR

The residential property price in H1 2019 showed mix movements across the board.
Residential properties both landed and high-rise unit in prominett and established area
withnessed a marginal capital appreciation. Good accessibility and various neighbourhood
attractions such as public and private college, have influenced the price increment. Double storey
terraces in established schemes such as Bandar Baru Sri Damansara enjoyed closed to 10.0%
increase with price fetching between RM1.1 million to RM1.3 million. In the high-rise residential
segment, strong performances were recorded. Apartments unit in Section 16 and 28 Shah Alam
area recorded double digit growth by 12.0% and 18.9% transacted at the highest price between
RM280,000 to RM350,000 per unit. Meanwhile, condominium units in SS 2, Petaling Jaya and
Surian Mutiara Damansara charted increases of 18.1% and 16.0% respectively with prices
ranging between RM1.45 million and RM2.0 million. As at Q2 2019, the All House Price Index for
Selangor stood at 198.3 points, up by 0.2 % over H1 2018. In line with the index increase, the
Average All House Price increased to RM480,863 against RM480,233 recorded last year. The
residential rental market was generally stable, with few movements recorded in selected
locations. Double storey terraced units in Subang Jaya commanded rental ranging from RM1,200
to RM1,500 per month, up by 11.6%. Other area in Klang District registered rentals between
RM1,000 and RM1,800 while in Gombak were stable at RM800 to RM1,500 per month.
Meanwhile, the high-rise residential showed stable trend with increases recorded in selected
schemes. Average rental yeild for landed residential units were between 2.5% to 4.2% and high
rise generally obtained higher average yield between 3.0% to 6.5%.
 8.5 SUMMARY OF PROPERTY MARKET ANALYSIS

From the data shown above, Petaling District is a district with ongoing development and
packed with future planning constructions. It is practical to start a new development there as the
location is very strategic and convenient for everyone which makes this as a main attraction for
some. Based on the construction activities trend, Petaling District is a fast pace district
development that will attract people to move in.
Table shows that the demand and supply for residential unit for condominium/apartment
is increasing each year and the overhang of unsold houses for the said unit is showing a good
decrease in number each year. Demand and supply for the new house for this type is balance
and stable moreover, it is also high in demand. The residential overhang situation showed a better
performance as the numbers reduced slightly in the review period. There were 4,243 units
overhang units worth RM3.63 billion in H1 2019, down by 9.7% in volume and 13.6% in value as
compared to the preceding half 2018. On the contrary, unsold under construction and unsold not
construction dropped by 2.5% to 15,389 units (H2 2018: 15,783 units) and 33.4% to 892 units (H2
2018: 1,340 units) respectively.
This shows a positive outcome to start a new development in the district and ensure that
the housing constructed will have buyers due to its location and surrounding amenities. The
selected location for the proposed development is Subang Bistari. Subang Bistari will be a great
choice to develop a residential unit as it is growing rapidly right now. Subang Bestari is accessible
via the Sungai Buloh Road which connects to the Guthrie Corridor Highway (access to the New
Klang Valley Expressway (NKVE)), Subang Airport Road (access to the Federal Highway), Jalan
Kuala Selangor and Persiaran Mahogani (access to Kota Damansara) thus making it more
accessible to construct a housing unit.