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Jan 10, 2014
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There
is a unique charmabout Penang.
With its idyllic sea views, significant
heritage and hillside residential living,
many consider this state, conferred a
UNESCOWorld
Heritage site status, to
be the ideal place to
live, work and raise a
family in. Property
wise, this alsomakes
owning a home here,
very attractive.
The statistics
Statistics from the
National Property
Information Centre
(NAPIC), indicate that
residential properties
remained the state’s most dominant
property sector
, with the highest
number of transactions. However, the
performance of Penang’s residential
propertymarket decreased
in 2013 compared to 2012. The total
number of properties transacted during
Q3 of 2013 was recorded at 4,522 compared
to 6,398 transactions at the same period
the year before. Flats remained the most
transacted property type with 901
transactions. This was
followed by 2 to 2 1/2 storey
terrace houses which
amounted to 897 transactions.
Residential
property trends
There is scarcity of land
in Penang. This has prompted
developers to become
more innovative in terms
of space utilisation. “The
trend is now for apartments
and condominiums to
be smaller in terms of
build-up sapce,” says
Datuk Jerry Chan, chairman
of Real Estate Housing
Developers’ Association
(REHDA) Penang.
“Residential properties are
also incorporatingmore of an all inclusive
lifestyle concept, with full recreational
facilities and 24-hour security (G&G
residences),” adds Shawn Ong, senior vice
president, Asset Valuation at Henry
Butcher Malaysia (Penang).
As for buying power, Ong says that
the
average affordable price range for
Penangites is belowRM600,000 and for
other local investors, the average
affordable property price is
belowRM1 million, for
properties on the island.
For
foreign investors, the new
rule is to buy residential
properties above RM1 million
for strata high-rise and RM2
million for landed properties.
According to Datuk Chan,
current
land prices in Tanjung
Tokong, Tanjung Bungah
and other prime locations
in the northeast district,
come between RM500 and
RM1,000 per sq ft.
Whereas in
the
southwest district, land prices range
fromRM120 per sq ft onwards
.
new regulations
To prevent the adverse effects of a
property bubble and to attract genuine
buyers rather than speculators, the Penang
state government has introduced several
new housing regulations as part of the 2014
Penang state budget (to be effective from
Feb 1, 2014).
The
Penang
factor
>What 2014 has in store for
the state’s residential market
2014will not be imposedwith this levy.
In addition, any purchased affordable
housing (classified as houses initially
purchased belowRM400,000 on the island
and RM250,000 on the mainland), must not
be sold for at least five years.
Thosewith
intention to sell their property during
the first five years have tomake an
appeal to the state government. Only on
approval can the property be sold, but
to ‘listed buyers’ only.
(Listed buyers -
people registeredwith the housing
department of the state government and
certified as middle-income groups who
qualify to purchase affordable housing.)
“Property is a long term investment and
these new budget measures will bring
positive notes to promote long-term
investment and deter excessive
speculation,” says Ong.
The state government has also
set up a RM500million Public and
Affordable Housing Fund in order
to build 20,000 units of public and
affordable homes. This amount is
the largest set by any state
government inMalaysia, for
affordable and public housing.
Foreign investors
in Penang
Although their share of
residential transactions is
comparatively low, (only five per
cent according to 2013 figures from
Henry Butcher Malaysia) Penang is
still a favourite for foreign property
investors. In a move
to protect the
housing interests of local
buyers, the State Government
has recently imposed a three
per cent levy on foreign
property buyers.
Local industry professionals are
happy about this. They say the rule is
sufficient enough to discourage foreign
purchasers who buy properties in bulk and
only have short-term speculative intentions
inmind, unlike the genuine foreign property
investors who purchase either to occupy
it themselves or for medium to long-term
investment purposes.
“The foreign purchasers market in Penang
is foreseen to come to a slowdown in the
short term. This is due to the additional
acquisition cost incurred for foreign buyers.
Nevertheless, the market is expected to
self-correct or cushion the impact of this new
measure in the medium term,” explains Ong.
Nonetheless, Datuk Chan adds that the
levy here is alsomuch lower than Singapore
andHong Kong. He believes genuine foreign
investors will continue to see Penang as a
good investment choice.
Property outlook
The general industry view is that Penang’s
residential propertymarket will remain
cautious but optimistic.
“The
outlook for 2014will be guarded
and prices of developments in growing
and hot spot areas will not be coming
down
. The reasons are because land prices
are continuing on an upward trend
everywhere due to scarcity and also the
upcoming opening of the Second Penang
Bridge. Furthermore, construction costs
continue to escalate,” says Datuk Chan.
“The opinion of astute investors is that
buying properties in choice locations in
Penang present an excellent mode of wealth
creation. The consumer confidence that local
and international investors have in Penang’s
properties also remain buoyant. Therefore,
Penang’s propertymarket is expected to see
more excitement in the Year of the Horse,”
adds Ong.
Goh PS/http://www.flickr.com/photos/27757645@N08
Investor tip
Land banks around the
intersection of the new
proposed highways and
the Second Penang
Bridge are potential hot
property locations in the
near future.
*Information sourced from
Henry Butcher Malaysia
Breakdown of value of residential property
transactions according to type in Q3 2013
Property Type
Total (RMMillion)
Vacant plot
53.68
1-1 ½ storey terrace
109.73
2-2 ½ storey terrace
449.34
1-1 ½ storey semi-detach
63.59
2-2 ½ storey semi-detach
222.79
Detach
159.51
Condominium/Apartment
492.81
Cluster house
4.03
Town house
18.17
Flat
180.38
Low cost house
17.74
Low cost flat
28.86
Others
0.49
Total
1,801.12
Information:
Value of transactions by price range
for residential properties in Q3 2013
Price range (RM) Total (RMMillion)
0-25,000
0.49
25,001-50,000
9.70
50,001-75,000
22.51
75,001-100,000
31.37
100,001-150,000
68.01
150,001-200,000
87.26
200,001-250,000
84.20
250,001-500,000
405.59
500,001-1,000,000
502.52
1,000,001 & Above
589.47
Total
1,801.12
Information:
General industry view - Penang’s
residential property market will
remain cautious but optimistic.
Goh PS/http://www.flickr.com/photos/27757645@N08
The
Property Outlook Conference is scheduled back this weekend on Jan 11 and 12, 2014.
Top property investment gurus, experts, valuers, developers and other relevant market
players will be sharing their viewon the propertymarket for the newyear.
This includes a
two per cent levy on
any property purchased after February 1,
2014 and soldwithin three years from
the date of the Sales &Purchase
Agreement (SPA). Properties purchased
with the SPA signed before February 1,
topics covered include:
• Will 2014witness a good time for the
property sector;
• Property outlook and investment
strategies for 2014 and beyond;
• Regional vs local real estate outlook;
• Secondarymarket performance outlook;
• Industrial properties as an alternative
property investment asset class;
• Will IskandarMalaysia remain attractive
in 2014;
• The officemarket including shop houses
in KL;
• How to achieve infinite returns on
property investment etc.
Featured speakers:
• MilanDoshi – Property guru and best
selling author;
• Renesial Leong – Asia’s queen of
property;
• Veena Loh – GMof Malaysia
Property Incorporated;
• Siva Shanker – President of Malaysian
Institute of Estate Agents;
• Datuk George LaBrooy – CEO and
executive director of Axis REIT
Managers Berhad;
• Dr Daniele Gambero – CEO and
co-founder of REI Group of Companies;
• Wong Kuen Kong – CEOof Dynasty View
Sdn Bhd, UMLand Berhad;
• Elvin Fernandez –MD of Khong & Jaafar
Group of Companies inMalaysia;
• PrudenceWong – Property Entrepreneur;
Datuk Soo Kai Chee – executive director
of finance andmarketing division, MCT
Group; VincentWong – Best selling
author and lease optionmentor;
• Datuk Sri Vincent Tiew – Executive
director of AndamanGroup.
The conference is organised byWealth
Mastery Academy. It will be held at Hotel
Istana, Kuala Lumpur. Seats are limited and
going fast.
For more information or to secure a seat,
call 012-438 8178 / 018-208 1178.
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