By Yvonne Yoong | Dec 29, 2011
Anticipating property trends
With 2012 fast approaching, many property investors and buyers are wondering what the market will hold for them in terms of yield and viability as well as what to put their money in.
Three progressive developers share their views on emerging trends in the New Year and how such factors will affect their own projects in 2012.
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Ken Holdings Bhd executive director Sam C.S. Tan.
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Ever Green
Ken Holdings Bhd executive director Sam C.S. Tan predicted that the local market will have an increasing interest in eco-friendly properties in view of the global concern for the environment and depleting energy resources.
“Green will be here to stay, as it will be paramount for us to secure energy resources in the future. More homeowners seek homes which will provide them greater comfort and also a better living environment for their family members,” said Tan, whose company has been focusing on eco-friendly properties since 2009.
“Asia should continue to do well and we believe that as long as new developments are in organic growth areas, it should garner good response.
"We have to bear in mind that Malaysia has a very young population and we still have a lot of demand for housing to cater for upcoming young families,” he observed.
Over the years, Ken Holdings Bhd has garnered a string of awards in property developments. Its Ken Bangsar and Ken Rimba projects have won no less than 10 awards including the BCA GreenMark GoldPlus Award, The Edge-PAM Green Excellence Award and the Fiabci Malaysia Property Award.
Tan added that green properties were “a need rather than a want in overseas property markets especially in Europe and Japan” since sustaining energy resources has become a real concern.
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From left to right:
- “In the past, the focus was on landscaping and living concepts. We now focus on delivering tangible benefits to homeowners and with our Green-rated buildings, we can see that green features will provide more benefits than just superficial offerings,” says Ken Holdings executive director Sam Tan.
- Over the years, Ken Holdings Bhd has garnered a string of awards in property developments with no less than 10 awards including the BCA GreenMark GoldPlus Award, The Edge-PAM Green Excellence Award and the Fiabci Malaysia Property Award.
- Home buyers are getting increasingly savvy and know about construction specifications. They will seek homes which provide them greater comfort and appreciate green initiatives that have been proven to work, says Sam Tan.
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“More and more developers are incorporating green initiatives and technologies in their developments. We will see them becoming more prevalent and (anticipate) more Green-certified projects coming on stream.”
Home buyers have become increasingly savvy and know about construction specifications. They will seek homes which provide them greater comfort and appreciate green initiatives that have been proven to work.
“In the past, the focus was on landscaping and living concepts. We now focus on delivering tangible benefits to homeowners and with our Green-rated buildings, we can see that green features will provide more benefits than just superficial offerings.”
Tan advised property buyers to educate themselves on how to choose a superior product and consequently, developers will have to deliver accordingly.
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Titijaya Group executive director Charmaine Lim.
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Small & Affordable
Titijaya Group executive director Charmaine Lim believed that there will be greater demand for smaller built-up units, such the SoHo (small office, home office) concept and granny apartments.
Property trends in 2012 will be driven by factors that include the global economy, market demand in targeted segments and product innovation.
“We will see more small office/home or SoHo concepts. Other than affordability, smaller units can be attractive in terms of design, space utilisation, creativity, integrated facilities or IT-driven features.
“The demand for boutique office space has been proven with successful launches by developers especially in 2011. This type of property attracts younger entrepreneurs as well as small and medium-sized corporations that favour innovative architectural and interior design, creative use of space, security and facilities,” she said.
Apart from such office space, smaller homes have become more popular and there will be demand for small homes especially in city centres. Nevertheless, compact home concepts have improved over the years and developers have included innovative features to enhance functionality. Another emerging trend is to design homes with a granny apartment that can accommodate the specific requirements and privacy of two generations living together.
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The Subang Park Homes project was designed for a specific segment of the property market (left); The lanai takes pride of place at this Subang Park Home built by the Titijaya Group.
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The “granny apartment” in the Malaysian context, refers to separate living quarters or an annexe attached to a residential unit. It offers a solution to two generations of family members who wish to stay close to each other and yet, want to maintain their own privacy and freedom.
Such a built-up concept also offers flexibility to the homeowner, who can choose to live in the primary suite and lease out the secondary suite or vice versa.
Next year will be challenging, pointed out Lim, Titijaya Group will be concentrating on developments with smaller units in both office and residential property. The focus will be on town centres and the vicinity as well as upcoming areas.
“We will look into innovative designs that include green features and which do not put too much of a burden on costs.
“We have developed such studio units at Subang SoHo three years ago. The response was encouraging and the rental yield was also quite attractive.
“The scarcity of land, increasing cost of construction, living standards and so on will continue to push the developer to think outside the box to overcome such issues.”
For those thinking of buying their own home next year, Lim advised prospective purchasers to study their family's needs. Consider the layout and design as well as the environment, neighbourhood facilities and amenities. For example, you may need to stay near your parents’ home so that it would be easier to send your children to their place. Think of your own needs and family obligations and prioritise.
If you are an investor, study the product choice and the location. The property needs to be in the right locality for it to be “sellable” or “leasable”.
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View from the top of the Subang SoHo show unit (left); SoHo Subang show unit.
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For instance, if the neighbourhood tends to be inhabited by residents of a younger age group, you may want to consider a studio unit or apartment. If there were more family members in an older age group, you may want to consider investing in landed property.
When there is an economic downturn, consumers will tend to be more cautious. However, there will still be demand for properties in any stage of the economic cycle. Developers will to be pro-active to meet the demands of buyers from time to time and to keep up with market trends.
Lim added: “Our property will also cater to first-time home buyers who want to own property in a certain location. Deciding on property prices will be crucial to determine the demand and yet not sacrifice the quality of the concept, design or finishing material.
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Capitawealth International Sdn Bhd managing director Danny Lim Tze Hsiang.
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Diversify
Capitawealth International Sdn Bhd managing director Danny Lim Tze Hsiang said shifting market interest in Europe, China and even Singapore, would bring about renewed interest in the Southeast Asian region, especially Malaysia and the Philippines.
Such trends can be attributed to the uncertainty affecting the European economy and also due to tight property investment controls in China and Singapore. Recently, on Dec 8, the Singapore government levied an Additional Buyer's Stamp Duty of 10% on foreigners purchasing residential properties, pointed out Lim.
Also, with the uncertainty in the stock market, the property market will be viewed as a more stable and safer place to invest, particularly for second-tier property markets.
“Our philosophy is to choose locations that are always in demand. This is even more so during potential downturns as investors will stay away or liquidate their assets in uncertain locations to more stable locations.
“We will continue to venture into properties that have intrinsic value, rather than perceived value. The adage proclaiming “location, location, location” remains true until today. There must be demand from local rental markets rather than just property flipping.
“Don't put all your eggs in one basket or one country,” cautioned Lim, whose property development and investment company, undertakes both local and international projects.
“If you are a property investor, besides Malaysia, consider spreading your risks in proven emerging markets such as the Philippines which has experienced 45 quarters of growth and a market that has escaped the recession twice. Why did Donald Trump choose to license his Trump Tower to the Philippines instead of China, Singapore or Malaysia? It is a good point to ponder!” he added.
Capitawealth is in collaboration with Century Properties from the Philippines which is currently staging a preview of the Trump Tower project in Manila. This project is touted to be one of the tallest and most iconic residential buildings in Asia when completed in 2016.
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Property location is a key consideration as reflected in Capita View's lush surroundings (left); The Capita View project offers hillside living.
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Penang Hill
At the local front, Capitawealth projects include Capita View on Penang Hill in Air Hitam, Penang. Spanning 2.76ha (6.83 acres) with scenic views, this Penang project involves bungalow lots where buyers can opt for the company’s panel of architects to built their dream home.
“The previous market trend was more speculative in nature and this has led to property prices going sky high. That is why some countries such as Singapore and China are implementing drastic cooling off measures. They want to prevent a repeat of the US financial crisis resulting from the sub-prime mortgage problem. Even in Malaysia, prices of land in certain parts of Penang increased 1,000% over a two-year period. For example, Balik Pulau land which used to go for RM2 per square foot is now going from RM20-RM50psf.
“I see a cautious economy and while there may not be a major downturn, people will be more careful with their spending and their money.”
Purchasers will be more picky and selective in the location and pricing, predicted Lim.
“Developers like us will have to strategise to meet their demands. When there is uncertainty, there are also more opportunities. It takes a visionary investor to venture into the unknown and grab these opportunities.
“For us, as developers, we will venture into smaller projects that have fast turnaround time spanning six months to one year. We have also gone into partnership with real estate companies in Singapore and China to tap into their need to invest out of their respective countries due to tight property control.”
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