I am a Singaporean working in China and now in my late 40s.
I am interested in investing in a KLCC (Kuala Lumpur city centre) condo unit. I have been doing research over Internet for the last 18 months, and visited the KLCC area in July.
A Citibank report indicated that there will be new condo units completed in the KLCC area – 2,500, 4,500 and 3,500 units in 2012, 2013 and 2014.
I am aware that the occupancy rate could be low ( less than 50%) with existing KLCC condo units.
I am prepared to buy and hold for at least five years, and be prepared to be leave it empty (difficult to rent out?) for 18 months.
When would be the best time to enter the market? 2013 or 2014 or even later?
Should I buy directly from the developer or from resale market?
Thanks for any advice.
Dear Kevin Li,
I guess you are a very careful professional as you have done your research on KLCC condo units for the past 18 months and have visited KLCC but have yet to buy any KLCC condo.
The state of KLCC condos has consolidated since the middle of 2011.
As you are in your late 40s, what is the purpose of investing in a KLCC condo? How are you going to finance your investment? How are you going to manage your residential property as you are from Singapore and working in China?
Timing of the entry will correlate with the potential capital gain/loss. Timing is very important in investment but very difficult to determine, as nobody knows the future with certainty. Therefore, nobody knows the best timing to enter the property market.
The state of KLCC condos has consolidated since the middle of 2011. From the property cycle perspective, the current Malaysian property market appears to have entered into the “autumn” period from “summer”. Each season may last a few years. If you buy property under construction now, it may take two to three years to complete. The probability of the property market turning to the “winter” phase upon completion, is higher.
If you buy from the resale or sub-sale market, what you see is what you get and you can negotiate the price. At this point in time, you may consider sub-sale or resale condo in KLCC area, as it is more certain than property under construction from the developer.
Since you are prepared to buy and hold for at least five years and prepared to leave it empty for 18 months, you may focus and search for a KLCC condo for resale in a development with relatively higher occupancy rate and relatively lower price to buy. You can even buy it now. If not, be patient and wait until the buying opportunity emerges.
From the research statistics for new condo units that you quoted, what does the data tell you? Why hurry, wait for the right condo unit with the right price before buying.
Peter Yee is the author of the books, You Can Become Rich in Property and The Certain Way to Life’s Riches. Formerly an educationist, he has also been a management consultant, stockbroker, restaurant owner, property investor and investment coach. Yee has a doctorate and master’s degree in business administration as well as a bachelor of science degree. He runs workshops on How to Make Money from Residential, Commercial and Auction Property in Malaysia.