On downtrend: A 'sold' sign is seen in Damansara Heights, where property prices have been on the downtrend for three years between 2015/16 and 2020. '
REALITY seems to be sinking in among Damansara Heights owners with regards to their asking prices after the Covid-19 pandemic struck.
Space Realty principal Eugene Liew says there seems to be a “a paradigm shift among owners.”
“They seem to be more realistic today. They are willing to negotiate and for some, relax their asking prices, ” he says.
The result is that agents like Liew, find to their surprise, that they are able to close more deals during the Covid-19 pandemic than before.
The other agent StarBizWeek spoke to is Zerin Properties’ Hans Fernandez and a third agent who declined to be named. All three concurred that what they have not been able to sell for 18 months to two years suddenly had firm offers after the pandemic led to the initial March 18 movement control order (MCO).
Although their comments are mainly anecdotal, Malaysian Institute of Estate Agents president Lim Boon Ping says that after the sharp drop with little or no transaction in March-April, there has been “a rebound” in the broader property market based on the National Property Information Centre (Napic) Property Market Report First Half 2020.
He declined to comment about the RM4mil-and-above market because he says this is a separate and different market altogether.
The dynamics are different and those who buy into this category make up a minuscule percentage among the broader house-buying masses, agents concur.
Despite the ravages of Covid-19, the wealth of those who can afford these properties has remained largely intact while the working classes worry about job and pay cuts.
While Napic data clearly shows a V-shaped recovery between January and June 2020, by no means is Lim saying that the market is fantastic, but that “the market has recovered somewhat from the March-April dip. After June, agents can generally expect July and August to show improvement in transaction activities, he says.
Lim’s comments lend credence to Eugene Liew’s comments.
“For Sale” signs, some of which have been hanging for close to a year or more have the “Sold!” sticker plastered over. Liew is seeing speedier transactions today.
“Covid-19 has changed our priorities, ” he says.
Liew says Damansara Heights prices have been on the downtrend for three years between 2015/16 and 2020.
In his dealings with clients, Liew says more than 50% of buyers voiced the “different feel” they had in Damansara Heights. They may be living in a strata development or a smaller house but now want to upgrade.
“Priorities have changed. Before Covid-19, they spent money on cars and holidays abroad, ” he says.
Today, unable to leave the country, they have decided to buy a house, he says. Fits of starts-and-stops does not lend certainty, bricks and mortar do. So do blue chips. Damansara Heights and Kenny Hills are the among the bluest in the property asset class.
“We are talking about the elites here. For many of them, putting aside RM10mil for a house is not an issue, ” Liew says.
Liew closed six deals this year in Damansara Heights and two in Kenny Hills, which, he says is “considered a lot.”
He says Damansara Heights transactions average about 40 annually; 80 during the euphoric times around 2014-2016.
Another agent who declined to be named says that, on average, there are 50 to 60 transactions in Damansara Heights annually. During the 2014-2016 period, there were more. But the second half of 2017 saw transactions drying up.
According to Napic’s RM10mil property deals – it started collecting transaction data in 2012 – property deals numbered the highest in 2018 at 24. Although Napic has a RM1mil-and-above category, there is a vacuum of information details with regards the RM1mil to RM10mil deals.
Based on the RM10mil property deals, the most featured location is Damansara Heights with 25 transactions for deals valued RM10mil and above between 2012 and the first half of 2020. Kenny Hills had 13, excluding Tijani Bukit Tunku which saw 10 transactions between the same eight-year period.
Says an agent who declined to be named: “The people in Kenny Hills are powerful. City Hall’s top officials can change every few years, but the people who stay in Kenny Hills remain there for aeons.”
Fernandez says Damansara Heights and Kenny Hills prices have been resilient despite the slow market since 2017. However, he has seen a 20% to 30% price drop in the less popular roads in Damansara Heights versus a 5% price reduction in more sought-after locations within the same enclave.
“Those located in premium streets are more resilient than in the more average Damansara Heights locations, ” Hans says.
Since the outbreak, Hans says there has been buying interest, especially since the two-month March-April downtime.
The reasons: changes in demographics as many owners are 60 and above, low interest rates, value buys and the recent removal of the real property gains tax for up to three units per individual.