Investing in real estate: Is KL’s Desa Park City a good investment?

Reading Time: 3 minutes

sponsored_investvine_desa-park-cityInvesting always come with a certain level of risk, even if it’s investing in real estate which has traditionally been considered as a “safe” investment for ordinary people. In this article, what will be explored is one of Property Guru’s most searched locations: “Desa Park City” in Malysia’s capital Kuala Lumpur. Comparable to Manila’s Bonifacio Global City or even the much acclaimed Palm Island in Dubai, Desa Park City is considered as a prime example of a master-planned city where everything goes right.

This is based on how the developments are not bunched together, there is adequate space for traffic and it combines aspects of nature and modernity. However, despite all these positives, it must still be questioned whether investing in Desa Park is a good idea.

Over-saturation of rental units in Kuala Lumpur
Malaysia’s real estate sector has experienced a surge in development over the past decade with heightened sales and the creation of increasingly ostentatious development projects that are meant to cater to the middle and upper class within Malaysian society. The problem with this rapid rate of development is that demand for rental properties has not sufficiently matched the amount of supply that is available. In other words, there are more people that renting out their property than there are people that are willing to rent it.

This is in part due to the high prices some of the latest projects have with buyers attempting to recoup their losses by charging high rent. Unfortunately, the problem with this is that the higher rental cost combined with limitations in the amount of people that can staying inside a unit has resulted in more people renting near the suburbs instead of within the city. Taking this situation into consideration and applying it to Desa Park where prices are actually higher than what you would find in the central business district, this creates an issue of oversupply.

Presence of foreign firms in Malaysia
Despite issues when it comes to the overabundance of apartments in Malaysia, there is a thriving demand for office space within the country. Due to the subsequent economic boom that Malaysia has been experiencing, this has resulted in a number of foreign firms looking to enter into the country. Office space has increased in demand and has become a prime investment method for many people.

All that you would need to do is invest in buying sufficient floor space within one of the many new buildings that are under construction in Desa Park, install all the necessities needed for an office and then advertise it online or via a newspaper. It is likely that you will get a response in short amount of time due to the sheer amount of demand present.

Cost versus benefit
When looking at the different units that are available in Desa Park, what is immediately obvious is that they tend to cost twice as much as their counterparts from other less prominent locations. The average price of a studio unit is 400,000 ringgit which is more than 100,000 ringgit than its closet counterpart that is not located within Desa Park. While the location and amenities of each building can definitely rank among the best in Malaysia, it must be questioned whether it’s actually a good idea to purchase a unit in this location at their current price levels.

One alternative that comes to mind is to avoid buying a unit altogether and focus on retail locations within the area. Due to it’s reputation as a master-planned community, there are actually quite a lot of people from around Kuala Lumpur that go into Desa Park in order to take in the sights. This has increased the amount of customers for various retail locations in the area and has made it a prime retail destination.

Living in Desa Park
Another alternative that should be considered is to simply live in Desa Park instead of investing in a rental property. Considering the fact that the entire area has been master planned, the location of government services, malls, supermarkets and restaurants are all within easy reach of each other. This makes living in the area a very good prospect considering the sheer amount of convenience. Aside from this, there is also the fact that the buildings in the area are competing on the type of amenities that they are able to provide to their tenants. This has resulted in many residential buildings having in-house laundry services, magnificent lobbies and a wide assortment of other benefits that are meant to entice people.

Conclusion
There are several things that you can draw from this article, the first is that over saturation makes investing in an apartment just to rent it out in Desa Park a bad idea. The second is that living in Desa Park seems to be a better alternative than investing in it. All in all, Desa Park is a great location, but the over-saturation of people renting out their apartments does present itself as a challenge.

 

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Investing always come with a certain level of risk, even if it's investing in real estate which has traditionally been considered as a "safe" investment for ordinary people. In this article, what will be explored is one of Property Guru's most searched locations: "Desa Park City" in Malysia's capital Kuala Lumpur. Comparable to Manila's Bonifacio Global City or even the much acclaimed Palm Island in Dubai, Desa Park City is considered as a prime example of a master-planned city where everything goes right. This is based on how the developments are not bunched together, there is adequate space for traffic...

Reading Time: 3 minutes

sponsored_investvine_desa-park-cityInvesting always come with a certain level of risk, even if it’s investing in real estate which has traditionally been considered as a “safe” investment for ordinary people. In this article, what will be explored is one of Property Guru’s most searched locations: “Desa Park City” in Malysia’s capital Kuala Lumpur. Comparable to Manila’s Bonifacio Global City or even the much acclaimed Palm Island in Dubai, Desa Park City is considered as a prime example of a master-planned city where everything goes right.

This is based on how the developments are not bunched together, there is adequate space for traffic and it combines aspects of nature and modernity. However, despite all these positives, it must still be questioned whether investing in Desa Park is a good idea.

Over-saturation of rental units in Kuala Lumpur
Malaysia’s real estate sector has experienced a surge in development over the past decade with heightened sales and the creation of increasingly ostentatious development projects that are meant to cater to the middle and upper class within Malaysian society. The problem with this rapid rate of development is that demand for rental properties has not sufficiently matched the amount of supply that is available. In other words, there are more people that renting out their property than there are people that are willing to rent it.

This is in part due to the high prices some of the latest projects have with buyers attempting to recoup their losses by charging high rent. Unfortunately, the problem with this is that the higher rental cost combined with limitations in the amount of people that can staying inside a unit has resulted in more people renting near the suburbs instead of within the city. Taking this situation into consideration and applying it to Desa Park where prices are actually higher than what you would find in the central business district, this creates an issue of oversupply.

Presence of foreign firms in Malaysia
Despite issues when it comes to the overabundance of apartments in Malaysia, there is a thriving demand for office space within the country. Due to the subsequent economic boom that Malaysia has been experiencing, this has resulted in a number of foreign firms looking to enter into the country. Office space has increased in demand and has become a prime investment method for many people.

All that you would need to do is invest in buying sufficient floor space within one of the many new buildings that are under construction in Desa Park, install all the necessities needed for an office and then advertise it online or via a newspaper. It is likely that you will get a response in short amount of time due to the sheer amount of demand present.

Cost versus benefit
When looking at the different units that are available in Desa Park, what is immediately obvious is that they tend to cost twice as much as their counterparts from other less prominent locations. The average price of a studio unit is 400,000 ringgit which is more than 100,000 ringgit than its closet counterpart that is not located within Desa Park. While the location and amenities of each building can definitely rank among the best in Malaysia, it must be questioned whether it’s actually a good idea to purchase a unit in this location at their current price levels.

One alternative that comes to mind is to avoid buying a unit altogether and focus on retail locations within the area. Due to it’s reputation as a master-planned community, there are actually quite a lot of people from around Kuala Lumpur that go into Desa Park in order to take in the sights. This has increased the amount of customers for various retail locations in the area and has made it a prime retail destination.

Living in Desa Park
Another alternative that should be considered is to simply live in Desa Park instead of investing in a rental property. Considering the fact that the entire area has been master planned, the location of government services, malls, supermarkets and restaurants are all within easy reach of each other. This makes living in the area a very good prospect considering the sheer amount of convenience. Aside from this, there is also the fact that the buildings in the area are competing on the type of amenities that they are able to provide to their tenants. This has resulted in many residential buildings having in-house laundry services, magnificent lobbies and a wide assortment of other benefits that are meant to entice people.

Conclusion
There are several things that you can draw from this article, the first is that over saturation makes investing in an apartment just to rent it out in Desa Park a bad idea. The second is that living in Desa Park seems to be a better alternative than investing in it. All in all, Desa Park is a great location, but the over-saturation of people renting out their apartments does present itself as a challenge.

 

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