Geographically, Negeri Sembilan is just right next to Klang Valley and it takes only about an hour's drive or slightly more via the KTM Komuter to go from one capital to another - Seremban to Kuala Lumpur. The convenience makes it an ideal place for many Negeri Sembilan folks to continue living here but attend to their daily professional work in Kuala Lumpur or elsewhere in Selangor. The short distance to the Kuala Lumpur International Airport, located nearer to the border of Negeri Sembilan, has also positioned it as one of the best candidates for corporate relocations looking to expand operations but without incurring the hefty cost of the city centre. This alone has created many job opportunities in the state, with international companies such as Coca-Cola, AkzoNobel, Philip Morris International, just to name a few, headlining their multinational presence in the state.
Although there was to be a catalyst that could have spurred the value and development potential of Negeri Sembilan further through the East Coast Rail Link (ECRL) with stations in Nilai and Kuala Klawang, of which the former has been earmarked as a full-fledged transportation hub, the realignment of the rail line by the Perikatan Nasional government has dashed all hopes through the removal of the two planned stations. A compensation of sorts would now come in the form of a highway linking to three potential growth areas that will drive the western side of Negeri Sembilan's urbanisation plan forward for the next 20 to 30 years.
Coming to completion in July 2021, the subject of interest is a 16.82km dual carriageway that links Nilai from the North-South Expressway to Bandar Enstek in Labu. The RM415 million linkage featuring three major junctions and six bridges will greatly improve accessibility to Gadong, Labu and the Malaysia Vision Valley 2.0 (MVV 2.0) development. Aside from adding to Negeri Sembilan's development stock and potential, it will also compete head on with newer townships not too far away in the Selangor territory since the 379,087-acre MVV2.0 also forms part of the Greater Kuala Lumpur ambition to ease saturation in the Kuala Lumpur metropolis. This is yet another reason why many in Negeri Sembilan will never really have to uproot to other states for the work-life balance between handsome commercial opportunities just within the doorstep and the more manageable cost of living compared to Kuala Lumpur.
Owing to the Covid-19 pandemic, 2020 was not the year for good buys. However, contrary to popular belief, prices of certain market segments such as landed residential, development lands, and industrial properties are still not adversely affected. Investors, property buyers, and developers are generally still cautious on the overall battle against the pandemic.
Negeri Sembilan's market in 2021 will depend largely on the efficacy of the Covid-19 vaccines which at present are also facing mutating strains as part of the risks. If the vaccines are proven to be effective, then the positive market sentiment should possess enough firepower to elevate the country's economy. And assuming it does trend that way, the Malaysian economy will gradually recover from the vaccination efforts and a property market recovery can be expected in Negeri Sembilan. As such, there will be some good picks on the horizon, and property developers, purchasers, and investors should continue to keep an eye for them. But with the second Movement Control Order (MCO) rolled out from 13 January 2021 and the Emergency order valid until 1 August 2021, one can only be a little more cautiously optimistic about the market.
Residential - review 2020
Following the nationwide trend, Negeri Sembilan's property market started to recover in the third quarter of 2020 after the MCO was implemented on March 18, 2020. There was however a reprieve subsequently with the different MCOs such as the Recovery MCO and Conditional MCO, enabling the resumption of production and trade activity. This led to a slight improvement in market conditions and private sector expenditure.
Up to Q3 2020, the number of residential transactions according to NAPIC has fallen by 25.58 per cent to 7,099 units in 2020 from 9,539 units in the corresponding period in 2019. The total value of transactions too declined by 20.83 per cent to RM2.063 billion from RM2.606 billion in the same intervals over 2020 and 2019 respectively. Thus far, although market sentiments seem challenging, there has not been overbearing news or movement in the rental market and rental rates, and there was no significant increase in foreclosures taking place in 2020. However, despite the "new normal" of working from home, it did not translate into an increase in purchases of bigger residential units. While some developers attempted to persuade potential buyers to secure larger residential homes to cater to WFH, the persuasion did not materialise due to various reasons, and chief among them is the weak buyers' sentiments and prevailing tight credit criteria.
Residential outlook 2021
Generally, developers in Negeri Sembilan are expected to continue launching landed properties in the affordable price range of RM200,000 to RM500,000. It is possible that higher-priced properties such as semi-detached houses at RM600,000 to RM1.2 million would also be making their way to the market but these are believed to be experimental launches and in smaller quantities to gauge the market's appetite.
Commercial review & outlook
In the commercial sub-sector, NAPIC's preliminary data for Q3 2020 revealed that the market appears to be fairly stable with a marginal drop to 213 transactions compared to 217 in the corresponding period in 2019.
In terms of tenancy, there was already a steady drop in previously tenanted units since 2018. If anything, the global pandemic merely exacerbated the vacancy rate but this did not transpire into a sudden drop of rental in the market, thanks to the emergence of food, courier, and logistics operators in recent months, making the situation less dire. The trend is expected to continue into the near future as market forces naturally create new demand for such operators to adequately meet the needs associated with the new normal and fanned with the rapid growth of online shopping as well as food delivery services.
The local tourism sector has also taken a hit despite not being a major tourist hotspot. Unlike Malacca, Negeri Sembilan is not famous for its tourism activities but due to fewer interstate travel opportunities, many hotels in Port Dickson and Seremban are experiencing low occupancy rates and as a consequence, affecting their room rates.
One of the top-notch resorts that previously fetched more than RM1,000 in Port Dickson are now only charging less than that (about 35 per cent discount) while budget hotels in Seremban are noted to be going at less than RM100 per night, suggesting that business is no longer as usual and should any of the stringent policies of MCO, physical distancing and quarantine are implemented at extended lengths, and a new wave of Covid-19 sweeps across Malaysia, hotels of all classes and relevant tourism service providers will be challenged to stay afloat in 2021 and beyond.
Factors to watch in 2021
● Availability of a proven vaccine will spur the country's economy and consequently Negeri Sembilan's property market.
● Interesting properties entering the market as a consequence of the Covid-19 pandemic.
Bright spots for 2021
● 16.82km road linking Nilai to Bandar Enstek, enhancing accessibility to Gadong, Labu, and the Malaysia Vision Valley 2.0.
● Restoration of inter-state travel post-MCO will improve traffic flow into Negeri Sembilan and its economy. - Henry Butcher Malaysia