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KUALA LUMPUR, Mar 12 (AFP): The Malaysian capital's luxury condominium market, which has enjoyed an unprecedented boom over the past two years, is facing the threat of oversupply, experts say.
Some 23 high-end condos are being constructed around the Petronas Twin Towers-the world's second-tallest building- including one plush development that features private swimming pools for each of its 94 units.
At the end of last year there were 1,222 apartment units in the city centre, but industry analysts say that figure will rise to at least 5,000 once the developments now under construction are completed.
"Luxury condominiums and serviced apartments especially in Kuala Lumpur city centre are unlikely to experience the bullishness of previous years," said leading property consultant C.H. Williams Talhar and Wong (WTW) in a recent report.
"There are some concerns of oversupply," said WTW managing director Goh Tian Sui. Condos launched off the plan in the second half of 2005 were "a bit slower" compared to earlier launches, he said.
"If sales slow down, developers will not be optimistic and raise prices... unless you are really very niche, and you are facing the Petronas Twin Towers," he said.
Malathi Thevendran, executive director of research and consultancy at Jones Lang Wootton Malaysia said that city centre condos started to "mushroom" from mid-2003 thanks to an economic recovery and lower interest rates.
"In terms of sale prices, new benchmarks have been achieved," she said.
The price of premium condos in the area has more than doubled, breaching 1,000 ringgit (269 dollars) per square foot, from an average of 500 ringgit previously.
Buyers are now faced with a minimum price tag of 500,000 ringgit for a studio with a fashionable address. The same amount could easily purchase a comfortable four-bedroom family house in the suburbs.
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