Strong buyer interest in high-end condominiums in Kuala Lumpur continued in H2 2010 thanks to sustained economic growth, and these positive factors spurred developers to release new and previously deferred projects, according to Knight Frank Research's real estate highlights for the period reviewed.

It noted projects offering smaller units, such as M Suites and The Elements@ Ampang, were well received by the market, registering sales rates of over 80 per cent due to their lower entry prices and ease in future leasing.

Meanwhile, sales at soft launches such as Vipod Suites and 6 CapSquare in KL city reportedly exceeded 60 per cent.

Elsewhere, Icon Residences in Mont' Kiara, "despite its high pricing", set a new benchmark with an average of RM1,200 psf and commanded a take-up rate of over 50 per cent in blocks one and two.

Global estate agent Knight Frank expects more condos to be completed in H1 2011 with an estimated 1,692 units in KL city and 2,202 units on the fringe. These include Panorama, Swiss Garden Residences and Regalia@Sultan Ismail in the city, and Seni Mont' Kiara and Sunway Vivaldi on the fringe.

On prices and rentals, it said those of existing condos in the city and its fringe areas were stable in H2 2010. However, popular addresses such as KL City Centre and Mont' Kiara saw price increments in projects including Marc Serviced Residence, K Residence, Hijauan Kiara and Kiara Designer Suites.

Some marginal declines were noted in rentals, especially in older condo locations where there are new completions which increased competition in a tenant's market.

Going forward, Knight Frank is cautious about the near-term outlook for high-end KL condos with the maximum loan-to-value ratio of 70 per cent imposed on third mortgages, a government measure to reduce speculative activities.

For the medium term, it expects the Greater KL plan and Economic Transformation Programme to augur well for the city's residential market.

On the Penang market, it said developers continued to buy land on the island to build more homes. Also, high property prices on the island led to increased demand on mainland Seberang Perai which saw prices of newer and better designed homes in good locations rising between 10 and 15 per cent last year.

On the Johor market, Knight Frank said demand for mid-high to high-end homes is growing and the outlook is positive in view of advanced stages of completion of major infrastructure works in Johor Baru and coming onstream of projects in Iskandar Malaysia. - New Straits Times Property