1. Transformation of Kuala Lumpur City into Greater KL
Greater Kuala Lumpur (Greater KL) is the most developed city in Malaysia, which is well-known as a leading commercial and financial centre in the region. It is made up of 10 municipalities, encompassing an area that is 11 times larger than KL city center and its population of 7.2 million is anticipated to expand 6% to reach 10 million by 2020. Education, jobs, and commerce are key drivers of growth in the Greater KL region. With population increase, demand for KL property will increase and likely push up the prices and rental of the property.
2. KL Transforming to be a Global Metropolis
The ongoing transformation of KL is part of Malaysia’s National Transformation Programme (NTP). By 2020, KL aspires to be among the top 20 global metropolis.
Malaysia’s capital city epitomises the quality and connectivity of the country’s transport infrastructure. The KL city centre is already well-connected with a multi-network of city and suburban roads/highways, rail and air transport networks which connect intra-city, inter-state and to regional and international cities. Kuala Lumpur International Airport (KLIA), Malaysia’s main international airport, located at the periphery of KL, is well connected to key regional and international routes.
3. Transformation to Increase Income Per Capital from USD6,700 to USD15,000
The Government aspires for Malaysia to achieve an advanced economy status by 2020, with a national per capita income of USD15,000. More transactions will be expected with higher disposable income.
4. Mega Projects Underway in Kuala Lumpur
KL’s skyline is dominated by construction cranes and developments that reach ever-skyward as the urban land bank diminishes. Several mega projects are under construction in Greater KL with most purposed as mixed-use – commercial, retail, hotels, and residential.
Tun Razak Exchange (TRX), with a gross development value of RM40 billion (US$9.38 billion), covers 28 hectares in the heart of the city. Construction of 26 buildings with a gross floor area of 21 million square feet will take over 15 years, but phase one will be completed by 2018.
Other mega projects in Greater KL include Merdeka PNB118 Tower, a 118-storey, 682-metre skyscraper in the city near Stadium Negara, which when completed in 2019 will be taller than the iconic Petronas Twin Towers; Bukit Bintang City Centre (BBCC), a 7.85-hectare, integrated development in KL’s “Golden Triangle” that will include residential suites, hotels, retail, parks and gardens, and will serve as an entertainment and transit hub; Bandar Malaysia, which involves the conversion of air force land in Sungai Besi.
A.T. Kearney ranks Malaysia the third best destination after India and China for offshoring, and the demand for property in KL is due to increase when more global companies recognize Malaysia as a location to bolster their regional presence.
Merdeka PNB118 Tower – when completed will be the tallest building in Malaysia
5. Kuala Lumpur-Singapore High Speed Rail (HSR)
The Kuala Lumpur-Singapore High Speed Rail (HSR) is a strategic project between the Governments of Malaysia and Singapore that aims to facilitate seamless travel between the two capital cities, enhance business linkages, and connect the peoples of both countries closer together. With terminus stations in Kuala Lumpur’s Bandar Malaysia and Singapore’s Jurong East, the HSR link is expected to cut the travel time between the two cities to 90 minutes.
On 5 Sep 2018, the Government of the Republic of Singapore and the Government of Malaysia announced that Singapore has, in the spirit of bilateral cooperation, agreed to Malaysia’s proposal to suspend the construction of the Kuala Lumpur-Singapore HSR Project up to 31 May 2020.
When the completion of HSR, it will greatly boost economic and financial activities in KL.
6. Kuala Lumpur Property Prices among the Lowest in the Region
To-date, Kuala Lumpur’s property prices is still amongst the lowest the region. Comparing the property prices in prime area in Kuala Lumpur City Centre vicinity with prime spots in Dhaka, Vietnam, Bangkok, Shanghai, Singapore, HK, Macau – it is much cheaper in Kuala Lumpur, the city continues to attract many foreign fund into the real estate.
7. International 5-Star Hotels making Presence in KLCC
International 5-Star hotels chain such as Harrods of London, Four Seasons, W Hotel, Banyan Tree Signatures, Grand Hyatt Hotel, Intercontinental, St Regis and Ritz Carlton Kuala Lumpur are making a presence in the area of Kuala Lumpur City Centre. Upcoming SO Sofitel Kuala Lumpur and Jumeirah which are part of the Oxley Tower mixed-development will be completed by 2021.
8. Friendly Foreign Investment Policy in Malaysia
Malaysia has a friendly foreign investment policy especially for residential properties:
- Firstly, foreigners are allowed to purchase and own residential properties in Kuala Lumpur from RM1,000,000 and above;
- Secondly, foreigners are allowed to own leasehold as well as freehold residential properties in the country;
- Thirdly, foreigners are allowed to own both landed and strata properties
The above may vary by state, as land is a state-governed matter. Hence, all the acquisitions will require the state authority’s consent.
The various minimum price thresholds imposed on foreign purchases of residential property are set out in the table.
Malaysian property prices are still among the cheapest in Asia, and the KL market in particular boasts good, long-term growth potential. Much of this is driven by local demand from an expanding Malaysian middle class, but foreigner investors stand to benefit when prices start rising again in the coming years.
There are also key factors that will shape Malaysia’s residential property market in the longer term:
- Increasing population and household formation;
- Increasing household income;
- Increasing job opportunities;
- Improvement of public transportation connectivity with the boost of rail line projects (such as MRT2 and LRT3 in the Klang Valley; Kuala Lumpur-Singapore High Speed Rail)
Check out this Top Selling Branded Hotel Residence in the heart of KLCC: