KUALA LUMPUR: The Malaysian real estate market has improved to some extent since last year but not to pre-pandemic levels, said Glomac Bhd group managing director and chief executive officer Datuk Seri FD Iskandar Mansor.
According to FD Iskandar, there is growing interest in property investment and real estate in Malaysia, but there are still many challenges.
"Yes, sentiments are there, and take-up has improved. However, among developers, we are concerned about the rise of construction costs and compliance costs, which in the 1990s were about four to five per cent compared to around 25 per cent today. There is a rise in development costs, and materials costs have also gone up."
Before the pandemic, industry players were paying about RM2,200 to RM2,300 for one tonne of steel, which is one of the main components of construction. During the pandemic, it went up as high as RM3,800 per tonne.
"Today, it has stabilised at about RM3,200 to RM3,300 per tonne. From RM2,300 per tonne to now about RM3,300 per tonne, it has gone up by about 35 per cent to 40 per cent. So material prices have gone up, but purchasing power has not.
"We cannot increase the prices of houses because the majority of potential buyers want houses at a certain price. That is why, in the first phase of Loop City, the units are priced at RM230,000 to RM660,000. I think that is the price range that people want, especially first-time house buyers," he said at the unveiling of the Loop City project in Puchong yesterday.
FD Iskandar said there are some positive market developments, such as an increase in foreign direct investments (FDI) and domestic investment.
He urged the government to attract more FDI and to put the investments into action as soon as possible.
"There are a lot of announcements, but we need to get started," he said.
Loop City is a 3-in-1 integrated project with a total estimated gross development value (GDV) of RM1.6 billion.
The project is the continuation of Glomac's Lakeside Residences, a township development with a GDV of RM4 billion spanning 188 acres that started in 2012.
FD Iskandar said that Loop City will be developed over four phases.
The low-density project has three serviced residence plots featuring lakeside terraced homes, semi-detached units, and apartments, as well as one commercial plot slated for a private school or hospital.
The first phase of Loop City, which has a GDV of about RM345 million, consists of 980 units of serviced apartments.
The units are sized at 450 sq ft, 550 sq ft, and 750 sq ft, making them suitable for starter families, young working couples, empty nesters, or singletons looking for homes that require minimal maintenance yet can fetch good capital appreciation in the future. The selling price per unit for the apartments starts from RM230,000 to RM660,000.
FD Iskandar Mansor said with the rising cost of living, many individuals working in Tier 2 locations like Bangsar, Petaling Jaya, and Puchong have resorted to living in Tier 3 areas such as Rawang, Sungai Buloh, and Cyberjaya to alleviate financial burdens.
"What we seek to establish, especially with young Puchong dwellers, is a choice to live and work in the area, to be closer to their family instead of living away from the Puchong city centre. We have 18 bankers with us here today who are very keen to give a good deal to prospective buyers and property agents," he said.