About half of the property on sale in Klang Valley, Malaysia are condominiums and serviced apartments. We have design an interactive maps with key statistics to help home buyers to make smarter decision in choosing the right location and the right price for their new homes. This dashboard focus on condominiums and serviced apartments within 1 kilometer to the nearest train station because we know that access to public transportation is a key consideration in deciding where to buy a house.
Over the last one and half decades, Klang Valley has seen a surge in number of condominiums built. This phenomenon coincides with cheaper mortgage lending rates, access to EPF withdrawal for house down payment and installment, lengthened mortgage lending period, creative pricing and product features, rise in home and land prices and, new transport oriented developments. Furthermore, the planned High Speed Rail between Kuala Lumpur and Singapore promise a better future for Klang Valley property market as this will give spill over effect of Singapore economic strength and purchasing power. That is what happened to Paris where property value appreciated after the completion of London-Paris high speed train.
Currently, condominium is half of the property listed for sale in Klang Valley and represents the largest type of property being sold online. This means that home buyers have plenty of options to choose from and should carefully weigh their options. Please exercise caution as some of condominiums in popular areas are under pricing stress. There are pockets of bubbles and can be avoided by carefully analyzing the fundamentals.
We at Red AngPow aim to equip you with unbiased, easy to use tool for analysis and making use of technology to empower consumers to make smarter decision. Armed with decades of data analytics skills, banking experience & property expertise we are bringing to consumers the insights and technology that are previous privy to large corporate at no cost to home buyers. *We are using condominium listed online as of July 2018 for this analysis.
In this article, we are focusing on condominiums near LRT, MRT & KTM Komuter stations as these where are the most of condominiums are built. Our definition of near train stations is within one kilometer to nearest train stops.
*larger words means more frequent.
In order to make house buyers getting great information and and for us to deliver a insightful shopping experience, we have plotted current condominium listing on interactive and zoom-able map . Home buyers can glance at vital statistics at the area of choices and make comparison of the the surrounding properties in one page. It gives a bird’s eye view of insights that delivers advanced yet simple information to home buyers. At deeper level, when zooming in down to condominium your can see detail listing of the chosen properties where you can sort and according to the criteria that you choose. You can click on the link to go to the original listing by the the advertisers and property agents.
With advanced technique of Artificial Intelligence and Property Industry experience , we have built a scientifically curated listing marked with blinking lime colored dots to assist home buyers to find their dream homes or the best value for their property investment. It was done with no preferential treatment to any developers, property agents or sellers. It was built with pure facts and science with no human bias.
With our map technology, searching for condominiums nearby train stations by train lines & median price per square feet has never been easier. The first of it’s kind, easy to use and available at your fingertips.
As we can see from the maps, stops at LRT lines are most popular places for developers to build condominiums due to the fact that it pass through populous residential areas, economic centers and transportation hubs. The long stretch of KTM Komuter lines falls second in term of popularity and has the cheapest price and price per square feet. KTM Komuter passed through less affluent neighborhood and has poorer public perception in term of reliability due to frequent train breakdowns. Among the train lines, MRT is the latest addition to Klang Valley transportation system and the first line SBK was completed in 2017. Middle part to the North West part of MRT SBK line has higher property price while the South East toward Kajang offers lower property prices. There is also major upcoming township development around Kwasa Damansara and Kwasa Sentral stations that investors and home buyers are eyeing.
As evidence suggests, distance to train station has great influence to condominium price. The nearer the property to train stop the more expensive is the price per square feet and most of condominiums in Klang Valley are built within 3 kilometer radius of train stations. Thus, it is very clear that the convenience of being nearer to train stops increases property value. LRT stops has the most number of condominium around them, followed by Komuter and the least is MRT. Prices of condo near LRT train are the most expensive because it pass through strategic areas and a number of affluent neighborhoods. While MRT is new and the completion of it coincides with the softening property markets the prices around its stops are relatively lower. We foresee that prices around MRT station will catch up in the future when the economic fundamentals is on track e.g. when banks lending policy is relaxed and income of general population rise. Charts below illustrate the relationship between number of property listing online, price and price per square feet against the distance to nearest train station.
Let’s look at the histogram of condominium near train stops in Klang Valley below to understand the density of price, built up square feet and price per square feet distribution. This will give you good sense of the condominium offerings in Klang Valley. The bar represents number of condominium listed for sales while price, built up square feet and price per square feet are on the X-axis.
Price – price of most condominiums generally is between RM450K to RM1M. Condominium above RM800K are beyond the affordability of general population. We expecting softening demand for above RM800K price tag.
Built up size – built up size for most of condominiums is generally between 900 square feet to 1450 square feet. Larger size are difficult to rent out as typical renters are young professionals, couples or young family with small kids that do not prefer larger size properties.
Price per square feet – price per square feet is concentrated between RM450 per square feet to RM800 square feet. Some developments that are pricing price per square feet higher that overall average of the areas are having trouble to sell despite offering many additional features, more facilities and great design. We hope that in the future, developer do study the affordability of their potential customers before building the properties.
By visualizing the price, price per square feet and built up size in 3D, we can see a trend that the closer condominium to KLCC the higher the price is. Only LRT train line pass through KLCC and it is expected to see these expensive grouping fall under condominium near LRT station category. On the other hand there is a smaller numbers of condos near MRT stops such as Pusat Bandar Damansara and TTDI that are very expensive. Further away from KLCC as far as Subang, Kelana Jaya or Gombak you can get older condominium with double the size of KLCC condominiums and with significantly cheaper price tags but much less exclusive than KLCC and farther commuting distance for those who work in large corporations.
*Size of the bubble represent the distance to KLCC. The smaller the circle the closer it is to KLCC.
Condominium Rental Yield
This is one of the most import gauge for true economic value of home price. Unlike speculators which focus on prospective property price change, value investors often use rental yields to estimate the value of property across economic cycle. Like any form investment where we measure annual return,here we apply the same method to property. In this case, we use annual cash flow from property rentals divided by property value. This is gross yield as it does not include associated expenses of owning a property (e.g. maintenance fee etc). Whether you will be staying at that property or for investment, you must always measure this to see whether you are getting a good deal. Below is the quote from world famous investor Warren Buffet on cash flow, that stays true across all economic cycles. Among the reasons why investors like Warren Buffet is so successful is due to his ability to hold term and his rationality to assess future cash flow generated from his assets without fear and greed.
“Focus on the future productivity of the asset you are considering”… “If you instead focus on the prospective price change of a contemplated purchase, you are speculating.”
Of all the property types, condominium gives the higher rental yield % as compared landed property but lower potential on property appreciation . With this visualization, it’s easier to see the guidance of expected rental yield, the good rental yield and the bad rental yield.
The median rental yield return for both overall condominium and condominium near train station are slightly below 4%. The opportunity is that you can find condominium that can give you as high as 7% rental yields. One and half decades ago, rental yield of 6%-7% was not considered a bargain.
Charts below illustrate the relationship between distance to KLCC (size of bubbles), rental yield%, price and built up square feet of condominiums in Klang Valley. For this, we only illustrate condominiums that are near to train stations and differentiated by colors to mark different train lines. Rental yield for condo near KLCC is not great. Generally speaking, the smaller bubbles which represent condominium with shorter distance to KLCC are mostly below 4% while the larger bubbles which represent condominium farther away from KLCC offer higher than median rental yield. Looking at the second chart with different viewing angle, we can see the most expensive condominiums are predominantly come from condominiums near LRT stations because it pass through prominent areas.
Different viewing angle of the chart above.
Developers For Condominium Near Train Station
For some home buyers, developers credibility is an important factor in their decision making. Reputable developers will minimize incompletion risk and give better assurance for the quality of work. Developers are offering their products to different segment of consumers. Some are targeting young young and middle income family with more affordable price points. Some are targeting foreigners and people with high net worth. Due to softening market, nowadays many of developers are offering rebates, gifts and free sales and purchase agreement due to softening demand and affordability issues of general population.
Below are the overview of each train stops by train line types. The bubbles represents train stops, the size of the bubbles represent number of listing found online and the color represents the areas in Klang Valley that the train stops located.
As expected, the most expensive condominium measured by price per square feet are dominated by condominium near LRT stops that are in city center and Bangsar.
For condominium near MRT stops, the most expensive by price per square feet measure are Pusat Bandar Damansara and Tun Razak exchange. Please note that for condominiums near Pusat Bandar Damansara stop are divided into two areas which are Segambut and Lembah Pantai depending at which sides of the stop they are in. There affordable condominium in around MRT stops which are further away from Kuala Lumpur city center at South-East and North-West sides of Klang Valley. Click here to view the map.
Condominiums near KTM Komuter stops offer more competitive pricing as it pass through less affluent areas. KTM Komuter lines cover more land areas than the rest of the train lines and offer wider selection in term of choice of location from Batu Caves all the way to Port Klang. However this train line is perceived to be old, slower and less reliable making it the least preferred train line.
Well, it is a lot of information to digest in one article. We have to save the rest for future analysis. We will give more granular information from time to time. Thank you for reading our insights. Please subscribe to our mailing list to receive our insights direct to your mailbox.