PETALING JAYA: The residential leasing market in the Klang Valley, which saw almost 30% difference in rental expectations, will be stuck in a rut for some time, said Speedhome CEO Wong Whei Meng.
According to the one-stop home rental, buy and sell platform, the first quarter of 2019 has shown that the gap in rental expectations between landlords and tenants have increased to almost 30% due to the significant increase in supply.
With the Home Ownership Campaign period coming to an end in June, Wong said some buyers might want to buy their own place as soon as possible in order to enjoy the exemption on stamp duty fees.
“If you buy a house for yourself, that’s no problem. But if you’re looking to invest, then you need to be more cautious,” Wong said.
Based on Speedhome’s transaction data for the past two years, rent returns in several popular areas in Kuala Lumpur have not increased mainly due to the higher supply of properties.
“For owners who bought their houses five years ago at lower prices, they can still get good returns. For new owners and current owners, it’s much more difficult as new homes in the market cost more than RM300,000. This causes the rental return to be lesser,” he said.
From its analysis of transacted rental deals and the median selling price of the Valuation and Property Services Department (JPPH), Speedhome found that Hartamas, Selayang and Ampang had the highest rental returns of 5.6%, 5.3% and 4.8% respectively.
Hartamas achieved the highest rental yield with 5.6% due to a low median transacted price of RM420,000 followed by Selayang with 5.3% rental yield due to newly launched mid to high-end rentals which drove the average rent higher while the median remained low at RM330,000.
In Ampang, the rental yield stood at 4.8% while median was at RM387,500.
Wong said homeowners expect too much rent, as reflected by the data, while the increase in new high-rise residential properties has also increased the gap in rental expectations between tenants and homeowners.
For instance, homeowners of Hartamas set a rent of RM2,772 but tenants are only willing to pay RM1,972. In USJ, homeowners expect an average rent of RM1,721 but tenants are only willing to pay RM1,229. In KLCC, the rental expectation gap is 25%.