Unsurprisingly, terrace homes dominated the state’s landed residential property segment from October 2015 to September 2016. The best performing neighbourhoods in terms of sales volume are as follows:
On top of that, at RM185 per sq ft, as shown in the table above, the overall prices of these units are still affordable to the masses – a typical 3 bedroom double storey house measuring 1,400 sq ft will cost approximately RM259,000.
The top 2 areas, Krubong and Durian Tunggal which neighbours one another, owe their popularity to their strategic location and the many commercial components in the area. Located within a 10km radius are amenities such as the Batu Berendam International Airport, the Malacca International Trade Centre (MITC) and Technical University of Malaysia Malacca (UTeM).
Residents of these two areas enjoy less traffic congestion as well – the Ayer Keroh Interchange which connects to the North-South Expressway is only 10km and 11km away from Durian Tunggal and Krubong, respectively.
Ongoing projects in Durian Tunggal further boosts its appeal as a residential hotspot; particularly, the Skyline Industrial Park - a gated and guarded industrial scheme which was completed in end-2015.
Barry notes that Taman Malim Jaya in Bachang was once the top pick for home buyers due to its proximity to Malacca City (it recorded the highest number of transactions for residential properties from January to September 2015).
It has now slipped down to the third spot, mainly because there is not much land left for development and most of the available homes there bear leasehold titles.
Thus, the population has progressively shifted outwards to ‘Greater Malacca’, into areas such as Durian Tunggal and Krubong - explaining their rise in popularity.
Investors will struggle to reap Return on Investments (ROI) as rental yields are quite low at the moment. Hence, it is safe to say that the bulk of the buyer profile consists of first time home buyers and upgraders.
Nevertheless, the population growth in Malacca is not an exponential one – many young adults migrate to bigger cities such as Kuala Lumpur, Johor Bahru and even Singapore in search of better job opportunities.
Transaction trend throughout the one year was generally stable with a slight fluctuation between months – the average monthly sale amounted to 164 transactions. Meanwhile, median prices per sq ft recorded a gradual and slight increase, albeit two inconsistencies in Dec 2015 and January 2016. Prices appreciated roughly 13.2% from RM178 to RM202.
Barry believes that landed homes will always be in demand in Malacca as long as the price is right. New products will enjoy a high take-up rate but there is a risk of overhang for Bumiputera units, as these are not snapped up as quickly. Barry feels that the state’s Bumiputera quota for residential properties is too high - as evident by the high number of unsold units in this category for most new developments. More so, this ruling might cause developers to shy away from building new homes in Malacca in the coming years.
HIGH RISE RESIDENTIAL
The Apartment category was the best performing sub-sector in Malacca’s high-rise residential market for the same review period.
Barry shares that there are not many high-rise choices for Malacca home buyers. Nevertheless, apartments located within Malacca City continue to generate demand from locals for convenience to work, schools and commercial facilities.
Homebuyers can look forward to having more options as there are new developments popping up along the coastal line such as Hatten City in Malacca City Centre as well as Marina Point and Cheng Ho City in Klebang.
The Bukit Baru area also holds appeal due to its strategic location. The Multimedia University (MMU) Malacca is situated right next to the Ixora Apartments, making it a favourite among investors and property purchasers. On top of that, Jusco Malacca is a convenient 5-minute drive away.
The median price trend for apartments observed a rather sluggish pace with monthly figures fluctuating between RM110 to RM180 per sq ft. Monthly sales mimicked a similar pattern – average transactions topped only 18 per month. Barry says that ‘lifestylefriendly’ apartments boasting good facilities and security measures such as The Green, Atlantis Residences and The Wave are doing well among locals and investors. He shares that of late, there has a been a steady flow of enquiries from aspiring apartment buyers for high-rises in the city centre, particularly in Malacca Raya and Kota Laksamana. Nevertheless, these homebuyers will have to settle for smaller units to raise their family in, as compared to landed homes.
Moving forward, Barry predicts that there will continue to be healthy demand for non-landed homes in Malacca, especially in the city centre and Klebang area as various new retail and commercial components are being introduced. Two new malls, Elements Mall and Imperio Mall, located within Hatten City were launched last year while upcoming malls including Harbour City Mall in Pulau Malacca and Vedro by the River, are slated for completion by 2019. These commercial aspects could possibly attract the younger generation to reside in the city centre, besides providing job opportunities. In addition, the state government is in the midst of setting up the Hang Tuah Trade Centre in a bid to boost economic activities for the locals. The project includes the upgrading and development of new buildings in the town centre and will be carried out over a 5-year period.
As quoted by REHDA Malacca Chairman, Dato’ Sri Ngoh King Hua in the REHDA Bulletin (Jan 2017), “Apart from the continuous uncertainty in the economy, the state’s policy regarding Bumiputera quota and other compliance cost have also impeded the property market performance.
What are your thoughts on this issue and what do you propose to the state government to help spur the property market in Malacca?
The State Government is currently targeting to build roughly 50,000 affordable homes or “Rumah Mampu Milik” (RMM) by 2020 through the intervention of Government-owned land and Approved Low-Cost Housing Land. Where affordable homes are concerned, there is ample incoming supply to serve the lower income segment.
Since this sector of housing is taken care of through Government initiatives, the State Government should relax building and development policies for privatelybuilt homes particularly the restriction on the construction of luxury homes costing RM500,000 and above. The rakyat should be given more home options across various price levels.
The Bumiputera quota should be relaxed as well for certain types of properties. Maybe homes costing RM300,000 and above should have a lower Bumiputera allocation.
This would help alleviate the current overhang situation. Allowing eligible non-Bumiputeras to snap up any unsold stock will be a win-win situation for both developers and genuine homebuyers.
With home loan approvals being a challenge, which areas/projects should aspiring homebuyers be looking at?
It is true that home loan requirements are now stricter but it cannot be ignored that it is currently a ‘buyers’ market’. There are numerous good deals out there – many units are being offered for sale at discounted prices.
Those who are able to secure a loan will not go wrong purchasing properties around Gapam, which houses the state’s administration centre as well as Ayer Keroh, the location of the upcoming High-Speed Rail station.
What are the emerging property hotspots in Malacca - If someone is looking to invest in property in Malacca this year, what would be the best kind of property to buy?
High-rise units in the secondary market are still very affordable when compared to newly launched developments. Aspiring home buyers can look out for seafront homes, especially in the Kota Laksamana area.