More New Launches for Second Half of 2020

The real estate market cannot afford to stay quiet. I had expected more new launches for the second half of 2020 and Mah Sing among others, proved me right. On 16 July, Mah Sing officially launches M Adora with the Housing and Local Government Minister, YB Puan Hajah Zuraida Kamaruddin, as the guest of honour.

M Adora, which sits on 4.5 acres of land has a total of 677 units with three types of layouts. The three layouts range from 3-bedroom units, 3+1-bedroom units, 4-bedroom units/dual-key units, ranging from 850 sq ft to 1,200 sq ft. The price per unit starts from RM468,000. M Adora's two residential towers are located in Wangsa Melawati, about 9km from Kuala Lumpur city centre.

M Adora, according to Mah Sing's press release, targets first first-time homebuyers, upgraders, young families or couples as well as the city’s professional population who would like to stay close to the city centre. At a gross development value (GDV) of RM378 million, Mah Sing continues to target the middle income group of buyers.

The challenge for the mass developer is that a large percentage of this income group may have been affected by the global pandemic. Recently, The ASEAN Post quoted Lim Boon Ping, President of Malaysian Institute of Estate Agents (MIEA) as saying that as a result of the pandemic, the Malaysian real estate market will shift to a buyer’s market from a previously seller’s market. Lim believes that property prices in Malaysia could decline anywhere between 10 to 20 percent.

Considering the fact that most property developers' profit margin sits between 20 to 25 per cent, this kind of price contraction may hurt many smaller developers, especially developers that already have cash flow issues even before COVID-19.

I do agree with Lim that the current real estate market in Malaysia is a buyer's market to a large extent. But the bigger question is for how long.

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