Is Mont Kiara still a good place to invest?

Mont Kiara is a popular residential area in Kuala Lumpur, Malaysia, owing to its high-end condos, shopping malls and international schools. Step in and you will find friendly people of locals and expatriates making it quite a melting pot. If you stay around here (which is tempting since there’s a lot to do and see), I doubt you’ll need to go elsewhere. High-rise buildings pepper the skyline, with numerous projects also in various stages of development in and around it. The property market in Mont Kiara was reported to have slowed down; this should not have come as much of a surprise. Today, we discuss the Mont Kiara property market where many wonder if it is still a good option for investment.

Oversupply

In a November 2016 article published by Focus Malaysia titled “Mont’ Kiara values, rentals under economic pressure”, it was reported that the property market in Mont Kiara had slowed down. The article cited an oversupply of high-rises and a sluggish property market as contributing factors.

I have taken note of the significant points mentioned in the article.

1. Capital appreciation of properties in Mont Kiara had not risen as much as in nearby Bangsar and Damansara Heights. Prices peaked around 2012.
2. A large number of property launches caused an excess in supply.
3. Although prices were subdued, demand for properties remained high if the price was right, as reflected in the volume of secondary transactions.
4. The general cycle of property prices doubling nearly every decade might be true for landed properties in Bangsar and Damansara Heights, but this might not apply to high-rise condominiums in Mont Kiara.

Due to the abundance of completed and upcoming projects, buyers now have more options to find the right property, creating a buyer’s market.

Although an oversupply of properties could lead to lower prices and rentals, it doesn’t mean all properties here would have difficulty attracting reasonable offers. There are still opportunities to invest in properties with good returns. However, one must carefully select the right project and unit, especially for investment purposes.

The National Property Information Centre (NAPIC) has predicted that the property market will remain cautiously optimistic in 2023. The gradual increase in the overnight policy rate (OPR) since May 2022 is expected to affect property market activity, mainly residential demand.

Finding gems among the masses

I recommend following these guidelines to optimize condo prices and rentals. The examples provided are for reference only, and other desirable projects exist.

1. Prime location within Mont Kiara

Residensi 22 was completed in 2017, and the initial launch price for the smallest unit (1878 sq. ft.) was around RM750 per sq. ft. Even though the site is situated between two developments, which obstruct the view for most of the units, the subsale prices have been impressive. In 2022, some units were sold for as high as RM1000 per sq. ft. However, it is uncertain whether this growth will continue at the same rate. If you need more details on the transactions, you can refer to Brickz.

Based on NAPIC’s data, a property market report has listed this project as one of the best-selling high-rise properties (above 1,500 sq. ft.) in Kuala Lumpur from July 2021 to June 2022. It is a popular choice among tenants due to its convenient dual entry from Jalan Kiara 4 and Jalan Kiara 3 and its proximity to various amenities. Garden International School is located just across from Jalan Kiara 3, while 163 Retail Park and Arcoris mixed project is opposite Jalan Kiara 4, further adding value to the project. It is worth mentioning that 163 Retail Park was completed after Residensi 22.

Anticipated projects can significantly impact existing projects, either positively or negatively. To be ready for such changes, it is crucial to consult with industry professionals and local council officers or do your own research.

2. Unblocked views

Many projects in Mont Kiara are located close to each other. Buyers prefer units with good views; higher demand equates to better prices. For instance, properties situated on higher floors in buildings such as Seni and 11 Mont’Kiara that offer views of KLCC are performing well.

A large piece of land is in front of the 11 Mont’Kiara KLCC-facing blocks. I could not find any published information about upcoming developments on this land that may block the view of some of the KLCC-facing units. Land use and ownership can change over time, and it is difficult to predict future developments with certainty. Therefore, it is recommended that you contact the developer or relevant authorities for more information.

In 28 Mont’Kiara, units on Block A3 at higher levels with unblocked views of Mont Kiara are popular. A fully furnished and renovated unit on the mid-level of this block is currently fetching RM10,000 per month.

The Pavilion Mont’Kiara offers unobstructed views on two sides, one of Mont Kiara and the other of the palace and KLCC. These units are on sale at premium prices.

Arte Solaris is expected to be completed in 2026. Residents are already concerned about traffic congestion at the T-junction, which leads to properties such as Seni and Pavilion. It is uncertain whether this will impact property prices. People may be willing to tolerate additional traffic if the demand for these properties remains due to their strong selling points. This is a general observation and the actual impact on property prices can vary.

3. Road conditions

The main arterial road, Jalan Kiara, is well-maintained with manicured sidewalks. This contrasts Bangsar’s main road, Jalan Maarof, which has many uneven areas. Beyond beautifying the area, improved road access could increase the value of properties. Notably, an active residents’ association in Mont Kiara working alongside authorities has helped improve the infrastructure and landscape.

Even though 10 Mont’Kiara and 11 Mont’Kiara are more than ten years old, they still offer reasonable prices and rentals. Another plus point is that these two projects are located in a quiet cul-de-sac, just a short drive from the central Jalan Kiara.

4. Proper maintenance

A property consultant spoke at a property exhibition and shared an interesting anecdote. He once asked a well-known developer in Malaysia about the factors that influence the selection of a property. The answer he received was clearcut: “location, location, and location”. I suggest adding good management to this list as it plays a crucial role.

Well-maintained older properties can retain their value and provide good rental returns. Generally, compared to newer properties, unit prices in older projects tend to be lower and less popular. However, despite being over 20 years old, some condos along Jalan Kiara are still in demand as they are well-maintained. Although the rate of capital appreciation may not be as high as before, nicely furnished units in well-maintained projects can still be rented out at reasonable rental returns.

5. Limited edition

Economics theory tells us that the availability of a product or service and the level of interest in it determine its price. It’s about demand and supply. If you invest in a development with many identical units in size, layout and orientation, it will be challenging to sell or rent out, as numerous options are available. Select properties where the supply is restricted. When supply is limited, there’s a sense of exclusivity and distinction, which increases demand and prices.

If you have the budget, investing in landed properties in Mont Kiara is advisable. Due to the limited supply, landed properties have better long-term capital appreciation than condos.

Jalan Kiara 3 connection to Mont Kiara main road

The front section of Jalan Kiara 3 has recently been converted into a four-lane road, increasing the appeal of properties in this part of Mont Kiara. The following section of the road remains a small two-way carriageway that goes uphill, and then the road opens up again at Jalan Segambut Dalam after the flyover highway. Further down at Petron station, road widening works are underway to reduce traffic congestion.

Beyond the highway, the areas adjacent to Jalan Segambut do not fall under the Mont Kiara postal address. According to Google Maps, Jalan Kiara 3 ends where the upcoming Bon Kiara and TWY 2 projects are situated. The Bon Kiara site is behind 28 Mont Kiara.

Many individuals have been inquiring about the possible connection between Jalan Duta Kiara and Jalan Kiara 3. Jalan Duta Kiara is the road between 28 Mont Kiara and TWY on the primary Mont Kiara side. There are no official confirmations yet on when this entry will open, although the authorities have provided guidelines to connect the roads. Please refer to the update at the end of the article for further information.

Please take note that the entry point will be through the proposed connection of Jalan Haji Hamzah to Jalan Duta Kiara, as indicated in Pelan Induk Trafik Kuala Lumpur 2040 on page 40, No. 36. Jalan Haji Hamzah is the road between the side of Bon Kiara and TWY2 at Jalan Kiara 3. On Google Maps, Jalan Haji Hamzah is also known as Jalan Duta Kiara, but on the site, it is referred to as Jalan Haji Hamzah.

Once the two roads are connected, Jalan Kiara 3 will become directly linked to the primary side of Mont Kiara. Depending on how this connection is made, the residents of Jalan Kiara 3 can use this shortcut to get to Jalan Duta Kiara. Please fill out the contact form if you require a copy of Pelan Induk Trafik.

Buying for own stay

When selecting a property for investment purposes, it is crucial to remain emotionally detached and focus on the potential return on investment and saleability. A suitable investment property may not align with your personal preferences for your residence. On the other hand, purchasing a property for your stay should meet your needs and align with your taste.

Before investing in Mont Kiara, which remains a highly desirable location, do your due diligence: conduct thorough research and seek advice from a real estate expert.

Updated status of road connections as of 24th October 2023

On August 30th, 2023, Bon Estates announced plans to improve connectivity between Jalan Duta Kiara and Jalan Kiara 3 with a new road link, as reported in EdgeProp (Ref 3).

During my recent visit to the local authorities two weeks ago, I was verbally informed that Bon Estates had received approval for the road connection. The two roads have a height difference and a drain separating them. The plan is to have a multi-way four-leg junction, but they have not announced yet whether the roads on each side will be connected without the need for U-turns. This type of intersection would provide greater flexibility in terms of traffic flow.

References:

1. https://www.mof.gov.my/portal/en/news/press-citations/property-market-activity-declined-by-5-7-pct-in-1q-
2. mof#:~:text=In%20the%20meantime%2C%20NAPIC%20noted,activity%2C%20particularly%20on%20residential%20demand
3. Bon Estates to boost connectivity with planned road link between Jalan Duta Kiara and Jalan Kiara 3 | EdgeProp.my