If you flip through newspaper or visit any property fair, you see condominiums and apartments being launched like sprouting weeds. You see faraway places like Sekinchan (One Residence) and Semenyih (Ascotte Boulevard) launching high rise condominiums. Even as far as Ipoh (Dfestivo Residence) and Melaka we see launching of high rise condominiums being the norm now.
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| Sekinchan One Residence |
If we analyze landed properties, there only ones being advertise are 3 storey units (Eg Duta Villa, Putrajaya) and no longer do we see 2 storey units anymore.
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| Duta Villa 3 Storey Link at Putrajaya |
A significant realization is emerging within the property development industry: landed property is no longer as profitable as it once was. This conclusion is supported by the HDA (Housing Development Board) schedule H, which outlines payment stages for buyers. By completing the foundation below an entire condominium building, developers can collect 10% of the property's value at stage 2a from all buyers. To illustrate, let's consider a condominium with 100 units, each priced at RM 300,000. At stage 2a, the developer can collect RM 3,000,000 (3 million). In comparison, for landed properties, developers must complete the foundation of each individual unit before they can collect the 10% payment. Notably, the foundation of a condominium, while slightly more complex in engineering, is significantly smaller in size compared to that of a landed unit. These factors contribute to the reduced profitability of developing landed properties in recent times.
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A sample of payment stages of a condominium
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Contrary to popular belief, land scarcity is not a universally accurate statement. While it holds true for central Kuala Lumpur, it is not an issue in places like Sekinchan and Semenyih. The availability of land in these areas is relatively abundant. However, the diminishing profitability of building landed properties is a growing concern due to the escalating costs of construction and increasing land prices in recent years. Consequently, the future landscape suggests that the launch of new landed property developments may become increasingly rare, particularly if our incomes remain stagnant.