Fair prices for a Park pad

PUBLISHED : Wednesday, 12 October, 2005, 12:00am
UPDATED : Wednesday, 12 October, 2005, 12:00am

Property costs are rising in Kuala Lumpur - but they are still a bargain

Malaysia, like much of the region, has bounced firmly back from the economic doldrums triggered by the 1997 financial crisis, but while property prices in the capital have risen they are still very affordable.

The Hong Kong General Chamber of Commerce has described Malaysia as one of the most progressive markets in the region and an ideal place to invest in property.

The chamber's iBulletin website, citing figures provided by Malaysia's Low Yat Group, said in June that property prices in the Kuala Lumpur City Centre (KLCC) development and the Golden Triangle area had risen rapidly.

The developer's figures showed prices in some properties had reached M$1,000 ($2,060) per sqft.

But property prices in Kuala Lumpur are still reasonable compared with other cities in the region. Take, for example, Park Seven, an SDB Properties project in the KLCC that is due to be completed in the first three months of 2008.

The development will comprise seven 20-storey towers with a total of 105 residential units, which is considered low density for Hong Kong but high density in Kuala Lumpur.

The towers house only one unit per floor and the access lifts can only be activated by the owner's key.

The units range in price from M$1.6 million for a 2,257 sqft two-bedroom apartment - including two parking spaces - to M$5 million for a 7,192 sqft duplex with its own pool, gym and entertainment pavilion.

'We have deliberately limited the number of floors to 20, compared to over 26 in other nearby developments,' said Teh Lip Kim, managing director of SDB.

'Each unit is at least 2,200 sqft and that limits the number of house owners in the development as well. 'We want to make sure that people who live here won't end up seeing different people next door everyday.

'We want to create a community at Park Seven,' she added.

The average price per sqft in the development is M$760. That compares with prices of between $8,700 and $13,000 per sqft in Henderson Land's CentreStage - possibly the nearest comparable property in Hong Kong.

The only concern about Park Seven is that oil company Petronas is likely to build another high-rise development on nearby land, which will block the view for those owning units facing the KLCC.

The rest of the surrounding land has been zoned as parkland or for embassy buildings.

Eighty per cent of Park Seven has already been sold. Units still available include three-bedroom apartments in towers C and D, which look towards the Royal Selangor Golf Club.

Prices range from around M$1.9 million to about M$2.3 million.

Five-bedroom flats ranging in price from just under M$3.3 million to about M$3.7 million are on offer in three of the towers.

But potential investors should make sure they fully understand the taxes involved if they want to sell units for a profit.

Real Property Gains Tax applies to any gains accruing on the disposal of property in Malaysia.

Malaysian citizens and permanent residents are charged slightly lower rates than foreign investors.

For non-citizens and non-permanent residents, gains from selling a property within five years of purchase are taxed at a flat rate of 30 per cent, after which the tax rate will be 5 per cent.

According to Ms Teh, many of those who have invested in Park Seven apartments are retirees, including many from overseas.