Kuala Lumpur climbed two places to reach the 26th spot at Knight Frank’s latest Prime International Residential Index (PIRI), which is considered a leading guide to the world’s best luxury property markets.
Notably, prices of high-end real estate there rose 5.5 percent in 2013 compared to a one percent uptick in the previous year.
“Despite a drop in total transaction volumes, we are seeing an increase in the average prime values transacted as high-end product remains in demand, especially in KLCC. We are also seeing a trend towards smaller units with higher psf value,” said Knight Frank Malaysia Managing Director Sarkunan Subramaniam during the launch of the 2014 Wealth Report.
In addition, Malaysian real estate remains attractive to local and foreign investors who are bullish on the country’s long-term economic potential, said Goh Cheng Ean, Executive Director at United Overseas Bank (Malaysia) Bhd and Country Head of high net worth banking.
“The appreciation in real estate prices in key economic centres like, Kuala Lumpur and Iskandar, is driven by the implementation of the government’s economic transformation programme, rise of the middle class and rapid urbanisation.
However, property values in Malaysia are still relatively lower compared to its Asian neighbours, she noted.
Meanwhile, Ultra High Net Worth Individuals (UHNWIs) in Malaysia are becoming more sophisticated when it comes the investment strategy, Goh pointed out. With a net worth of at least US$30 million (RM100 million), these kind of people are willing to pay a premium for properties with good value.
“Super rich Malaysians are confident and invest with a long-term view. In the past, investments used to be made within the region, their comfort zone; today, UHNWIs residing in Malaysia have more confidence and exposure to investing in developed markets. With continued signs of economic recovery in the US and the Eurozone, we foresee increasing fund flows from emerging markets into developed markets.”