KUALA LUMPUR, Jan 24 — A property consultancy research firm has found that there are more high-end condominium launches and preview in the second half of last year compared to the previous half, despite falling demand for such properties amid the sluggish economy.

In its latest research report on real estate for 2016’s second half, Knight Frank Malaysia showed that seven such projects were even completed in that period, adding 2,265 more units to be sold in the market.

“Despite the subdued market, there were noticeably more launches and previews in the second half of 2016,” said the report.

The firm said there was an excess of 46,047 units of high-end condominiums and houses at the end of 2016 after the completion of seven projects: KL Trillion, Le Nouvel, Setia Sky Residences (Divina Tower), Three28 Tun Razak, Nadi Bangsar, KL Eco City and Serai Bukit Bandaraya.

Knight Frank said seven more projects are expected to be completed by the first half of this year, adding 3,185 more units to the market.

“There were noticeably more launches and previews during the review period compared to the first half of 2016,” it added, listing The Estate, Sentral Suites, Setia Sky Seputeh, Aira Residences, and Alya Kuala Lumpur (Senada Residences) as notable launches.

Its managing director Sarkunan Subramaniam explained that the sales of these units have been affected by various economic factors which includes the dwindling ringgit and the reluctance of banks to approve property loans.

“2016 was a challenging year with both high-end condominium and office market subdued. This year, homebuyers will continue to face financing difficulties with banks holding out loans.

“Loan interest rates may rise and this will affect investor’s returns,” Sarkunan said.

Putrajaya’s move to increase the stamp duty rate for real estate worth more than RM1 million which comes into effect in 2018 would be a double-edged sword for the market as it may help boost sales of properties this year and force developers to build cheaper in the future, the report pointed out.

“Whilst this announcement is expected to further dampen the high end condominium segment in 2018, it may boost sales of million ringgit homes before 2018.

“Post 2018, more developers may price their products below the RM1 million threshold, offering smaller built-up and lesser furnishing,” it read.

Knight Frank also noted that due to public sentiments on the rising cost of living, the retail property market is due to face problems this year.

Sarkunan however was optimistic that the property market in 2017 would expect to bounce back at the end of the year following possible general elections.

“Going forward in 2017, the hotel and logistic sectors are foreseen to do better, as investors look for better yields in this sector to diversify their portfolio.

“At the tail end of 2017, the market is expected to pick-up after the national election and as the dust settles, business will be running as usual,” the country director predicted.