Property Insight > Area Focus > 2019: Revisiting Mont Kiara

2019: Revisiting Mont Kiara

Introduction

Mont Kiara is famous for being one of the most luxurious districts in the entire Klang Valley. Known for its strategic location, just 15 minutes away from the heart of Kuala Lumpur, it is also well-known for its heightened quality of life. Referred to as an international condominium township, many expatriates are residing in this area, with a majority of them being South Koreans & Japanese.

Few out of the many iconic condominiums in Mont Kiara include Arcoris, Solaris Mont Kiara, Plaza Mont Kiara, One Mont Kiara and Gateway Kiaramas. Despite being the concrete jungle that it is, the area is paradoxically dubbed one of the “green lungs” city in Kuala Lumpur, being the base of Bukit Kiara.

Brief History

Before it was called Mont Kiara, it was called the Segambut Dalam Rubber Estate in the 1990s. There were no major access roads in and out of this area, and the ground was graced with nothing but undergrowth and rubber trees. The uneven terrain and hilly surface made it very difficult to transport goods and materials – not exactly the most accessible place to start a real estate development project.

Datuk Alan Tong Kok Mau, the founder of UEM Sunrise, acquired the land at a relatively low cost. He had big plans for this area, to turn it into a lavish township centred around comfort and quality living. The name “Mont Kiara” was the only one that didn’t end up on the cutting room floor, and the name has attracted plenty of foreign investors and expatriates.

Initially, Mont Kiara’s emergence served as a direct competition to Bangsar, which was already one of the most opulent neighbourhoods at the time. Being relatively unknown in that period, Mont Kiara attempted to pull attention towards itself through heavy promotions and offering enticing, competitive prices. Properties in Mont Kiara could go as low as RM190 psf, a steal when compared to Bangsar’s RM300 psf at the time.

 

Present

In stark contrast, units in Arcoris Residences average out at about RM1000+ psf as of 2018. It is shocking to see how far Mont Kiara has come. With a brand new year and a fresh new start, we would like to get to know how Mont Kiara has been performing as of lately.

Property Insight reached out to Johann Paul Greggory, to get his insights on Mont Kiara from a resident’s point of view. Johann Paul Greggory is an author, speaker, trainer, consultant & real estate partner, with plenty of experience dealing with real estate.

 

Living in Mont Kiara

As high-class as Mont Kiara is, there are still several problems that have been plaguing the area for the past decade. The most prominent issue would be the traffic congestion in the area, which has raised many complaints from the residents and the community. Traffic could stop to a halt during school pick-up hours, but there are pockets of time where traffic is smooth sailing, especially during school breaks.

Despite the usually congested traffic flow, Mont Kiara still boasts great connectivity as it is situated at a prime location. There is the Penchala Link Expressway that links Mont Kiara to Petaling Jaya, Kota Damansara and Damansara Perdana, allowing easy access to offices and shopping malls. You can reach Kuala Lumpur City Centre using the Kerinchi Link Expressway as well.

There are plenty of property value boosters such as Mont Kiara International School, and Gardens International, and a new Hyatt House hotel. Amenities are aplenty with everything you will ever need within a 15-minute drive away, and that includes banks, hospitals and post offices.

 

Transaction Rate

Figure 1: Recorded Transactions of Condominiums in Mont Kiara

Figure 2. Recorded Transactions of Serviced Residences in Mont Kiara

The best way to understand how an area is performing is by, you guessed it, looking at statistics.

As you can see from the density of the clusters, the amount of transactions in the condominium sector has somewhat dropped since 2015. This is more apparent in the serviced residences sector, which experienced a significant drop in transactions in 2015 as well. This data falls in line with the statistics in Figure 3 and 4, brought to you by PropertyAdvisor.

Figure 3.

Figure 4.

Looking at the pricing trend line, despite the drop in the rate of transactions, prices have consistently increased at a rate of 5% on year on year basis.

Figure 5. Media Price Psf for Mont Kiara & Kuala Lumpur

In terms of value, Mont Kiara has been fairly consistent when compared to market trends throughout the entirety of Kuala Lumpur, though prices have been erratic in the second half of 2018.

 

Data Interpretation

It is great to have these charts and all, but how does this data relate to us? We approached Mr Michael Lam, associate partner of CH Asset Management, to get his interpretation of the information presented to us.

According to Michael, this data spells good news to property investors in Mont Kiara. “There is a steady appreciation in prices and not a stagnation as some are led to believe,” he said. “Judging from the House Price Index in Mont Kiara, you are looking at a 5% year-on-year increase of house prices up until 2017. I predict that the median price of sub-sale units in Mont Kiara will be around RM700 psf in 2019, but don’t expect many transactions to happen in this period.”

If you are looking for good value, it is still best to stick to sub-sale units, due to their relatively lower price per square feet. We have new projects such as Pentamount and Sefina by UEM Sunrise, which is still a great buy due to their newly built status, but these units are priced around RM650 to RM790 psf,” Michael explains.

“The most critical factor to consider is the location of the property within Mont Kiara. Those existing units surrounding the heart of Mont Kiara like Solaris are stable and consistent in their rate of capital appreciation. Newer projects are situated near the outskirts of Mont Kiara, and we do not have enough data to give a concise prediction on their potential gain. It is essentially a high-risk, high reward situation.

 

Rental Yield

When asked about the rental yield and its potential moving into 2019, this is what Michael had to say.

“Like all areas in Kuala Lumpur, not just the Mont Kiara region, there is a massive influx of residential projects flowing in. Tenants nowadays have more choices to choose from, and I foresee a steady flow of expats coming into Mont Kiara for that simple reason. That said, investors need to work harder to attract tenants to their properties over the competition. However, the demand is definitely still there.

Regarding rental yields, TheEdge has published statistics indicating that rental rates by the end of April 2017 averages out to about RM3 psf. Fast forward to 2019, and you can see that the rental rates did not change much at all,” Michael noted.

City Valuers director, Mr Lim Choon Yong, also echoed the points made by Michael. In local news outlets, Mr Lim has been quoted saying that rental rates in Mont Kiara are expected to remain flattish during most of 2019.

With tightening regulations regarding short term rentals like Airbnb, investors are forced to stick to the current rental rates. Personally, I believe that Mont Kiara will remain as an expatriate hotspot region for years to come.”

When asked about what advice Michael would give to property investors, he has this to say: ”For capital appreciation, I would dare say that it is the survival of the fittest. If we are talking about landed properties, then there should not be anything to worry about. But if we are talking about high-rise condominiums, I can honestly say that it depends on many factors.

Judging from the data I have on hand, the rate of transactions have slowly stabilised, yet the price psf has been dropping steadily. Now would be an excellent time to purchase sub-sale units, but it all depends on the location of the property. Sub-sales is where the real value is, and more importantly, don’t expect much from rental yields.”

 

Conclusion

Considering the fact that the property market has been under-performing for the past few years, Mont Kiara, compared to other districts, somehow holds up well against the competition. It is still an attractive option for people who are looking to move into a matured, affluent neighbourhood, and properties still have plenty of potential for future growth.

 

Read up on our top reasons to consider living in Mont Kiara here.

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