Residential sub-sale market report - Worth considering - Part 3

HAVING covered both the sub-sale residential markets in Sabah and Sarawak over the last two weeks, we highlight the outlook in Selangor via this brief summary by iProperty Group data services general manager Premendran Pathmanathan.

In terms of sales volume, Selangor emerged the best-performing state against the country's market share (refer C). Although there was a drop of 17.6%, looking at year-on-year (Y-O-Y) figures, Selangor achieved 31.7% (28,467 transactions) according to data retrieved between November 2015 and October 2016.

Interestingly, Penang was the only state which performed better than Malaysia's average (-20.4%), while Kelantan was the only state that recorded a positive trend where its Y-O-Y transaction movement increased by 6.7%.

From data shared by iPropertyiq.com, the most transacted areas in Selangor were:

1) Klang
2) Shah Alam
3) Puchong
4) Ampang
5) Cheras
6) Kajang
7) Seri Kembangan
8) Petaling Jaya
9) Subang Jaya
10) Kapar

These top 10 areas comprise 50% of (roughly 14,234) the number of transactions of sub-sale residential sales in Selangor (refer B).

Looking at the top transacted areas, it was noted that transaction volume fell across all areas except for Setia Alam which rose by 15.4% in sales, from 596 to 688 transactions. This is said to be caused by the price factor.

In all, 11 other areas in Selangor performed better than the state's average of -20.4%, with four doing above average – Subang Jaya, Cheras, Petaling Jaya and Shah Alam.

Price wise, capital appreciation for each state is measured by the annual change in median prices per sf. From data recorded, all states flourished except for Sabah.

Selangor fared below average while Johor led the pack, more than doubling that of Selangor's performance, four times more than KL's performance. Johor's median price per sf increased to RM266 psf from RM221 psf.

In terms of Y-O-Y capital growth performance in Selangor, Puncak Alam emerged tops with annual capital growth reaching 23.4% (refer A). Performing above average were Kapar, Seri Kembangan and Klang. Of the top 10 areas, Subang Jaya and Petaling Jaya suffered capital depreciation with values declining by 0.14% and 1.7% respectively. Residential prices in Setia Alam dropped in value by 8.5%, from RM397 psf to RM368 psf.

While terrace homes measuring 1,500sf to 2,000sf made the cut as the most popular product type aspiring home buyers searched for, the most popular products that were actually sold turned out to be flats measuring 500sf to 700sf, costing below RM100,000 (refer D). Information garnered from data revealed that that there is a huge difference between what home buyers are interested in and what they are purchasing. Affordability could be the main reason.

In all, there are plusses and minusses, whether buying new or sub-sale. Weigh the pros and cons and do your research before making a decision. While new properties may cost more (depending on the size, location, etc.), sub-sale residentials can come with a can of worms or bring you years of happy and comfortable living.

Follow our column next week on interior decor, followed by residential sub-sale market reports on Johor and Penang.