Prices of luxury condos that have mushroomed around the Malaysian capital’s Petronas Twin Towers in recent years are crashing as the global financial crisis hits.

Cashed-up Malaysians and foreign investors from Asia and the Middle East fuelled a boom in plush inner-city apartments that saw some 28 high-end buildings thrown up in the city centre. But the economic slowdown has seen prices at some buildings slump by up to -30%, while one in five properties languishes unsold on the depressed market, according to analysts.

Tenancies are also down, and landlords are offering steep discounts on rentals, nervous that the traditional flood of new expatriates during the northern hemisphere summer may not materialise this year.

Rahim & Co estimates that sale prices for top Kuala Lumpur condos will slump between 15-20% this year. Prices at the glitzy 607-unit Marc building have plummeted by about -30%, according to analysts.

Despite the global crisis, none of the five new luxury condo projects still under construction in the Twin Towers area has been put on hold, and they are expected to be completed on schedule. Developers said they were optimistic of clearing the backlog when the economy bounces back, allowing buyers to take advantage of what by regional standards is now an even better bargain.