Recently, many people have asked me about yields and rental yields. I mean, I have been telling everyone out there about the dangers of property investments in recent volatile times, and it is highly critical and essential what you invest in, and what you decide to buy. =)
In my opinion, I believe that rents in Kuala Lumpur is likely to fall a bit. By looking at the prospective projects coming up, looks like there are quite a number of high end homes to be completed in the coming months, right up til end of next year – and that is a rather healthy supply of high end condominiums coming along. Further to that – from what I have been hearing, the expat remuneration packages in Kuala Lumpur have somewhat turned to be less lucrative as compared to before. In fact, not many companies pay the luxury RM25-30k/month rental for a high end KLCC property nowadays.
Mont Kiara is still amongst the preferred locations for investments.
If we were to look at our neighbours Singapore – I have read that luxury home rents have dropped by two percent in six months… in fact, in some cases, rents had to be reduced by almost 10% to attract tenants. Similar to KL, the pressure on rents is also seen in a lot of multinational corporations – who have tried to apply local terms for expats. This means the expats must now pay for rent from their salaries instead of enjoying a separate housing allowance.
However, properties in Singapore generally have low yields, but exorbitant capital appreciation figures – a vast difference as compared to Kuala Lumpur.
SO… back to Kuala Lumpur.
Where would be an ideal property to invest in and still get good yields? For the higher rents, Mont Kiara is still perhaps the best areas to invest in, especially with all the international schools and so on in the area – but in smaller sized units though, cos rents are rather fixed. Go for the 700-900 sf units – that somewhat is the most ideal investments. The larger units… say 1,500 sf and above, would face resistance in getting similar rental rates. Units with nice facilities… i.e. infinity swimming pool, gym etc… those are ideal properties to get.
Marc Residences, KLCC
KLCC vicinity would still be an ideal location too due to its close distance to KLCC and the prime financial centre of the city. But same thing goes… invest in smaller sized units for the best yields. =)