Construction workers lay roof tiles in a residential development in Puncak Alam, Selangor November 1, 2018. — Picture by Yusof Mat Isa

GEORGE TOWN, April 12 — Houses in Kuala Lumpur are among the cheapest compared to 34 other cities worldwide, according to the latest Global Living report released this week — even though many Malaysians struggle to buy their first homes.

The Malaysian capital ranked 32nd out of 35 global cities with an average property price of RM494,266 (US$119,738), according to Global Living report by real estate firm CBRE.

The report which compared investment residential properties across 35 cities listed Hong Kong at the top spot with an average property price of RM5,098,864 (US$1,235,220) while neighbouring Singapore, came up second with an average property price of RM3,609,320 (US$874,372).

Kuala Lumpur recorded a healthy 4.9 per cent house price growth last year despite being ranked as the city with lower priced residential properties.

In terms of housing price growth, Kuala Lumpur was ranked 15 out of the 35 cities while cities such as Barcelona, Dublin, Shanghai and Madrid saw double-digit growth of between 16.9 per cent and 10.2 per cent.

Even the average price of prime properties in Kuala Lumpur was fairly low at RM1,712,372 (US$414,829), placing the city at number 24 in the list compared to the highest at RM28,369,199 (US$6,872,550) in Hong Kong.

The report pointed out that the cost of living, the prices of hotel accommodation, vacations and fine dining in Kuala Lumpur were also among the lowest in the world but the cost of cars is now among the highest.

It said Kuala Lumpur has a good transport infrastructure, good road connectivity and numerous rail network systems.

“Above all, Kuala Lumpur is a modern city that retains a relaxed lifestyle and has plenty of future potential,” it said.

Residential market prices in Kuala Lumpur only saw increases in recent years due to speculative investments, it stated.

“This has led to a mismatch between product and affordability, with most of the local population rarely able to afford properties in new and prime housing developments,” it said.

It noted that the government had then introduced cooling measures such as the Real Property Gains Tax, foreign ownership restrictions and tighter lending policies.

It concluded that the cooling measures managed to keep property prices under control which led to properties in Kuala Lumpur remaining relatively affordable compared to other Asian cities.

The report also said Kuala Lumpur is ripe with many investment opportunities especially in the luxury high-rise segment.

“The luxury high-rise segment is largely a foreign investors’ market and the majority of such properties are developed in the heart of Kuala Lumpur,” the report said.

It predicts a moderate launch activity in the near future due to a high number of existing supply in the market but that housing demand in Malaysia will continue to persist due to rapid urbanisation, improving infrastructure and constant population growth.