MARCH 21, 2014
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T
he
property
scene in cities
like Kuala
Lumpur,
Selangor, Penang and
Johore is for themost
part robust, fuelled by
demand that comes
naturallywith being in
cosmopolitan parts of
the country. For those
who enjoy the daily rat
race and fast-paced
grind of city life, a
metropolis is the place
to live andmake a
living in. It is also in
these principal cities
where economic
activity is buoyant,
influencing a
continuous buzz in the
propertymarket.
While active and
analytical property
investors prefer
investing in urban
areas to reap the best
and fastest profits, we
look at the real estate
scene in
Kedah, a
more quaint, quiet
and charming part
ofMalaysia.
Also known as
Darul Aman, Kedah
consists of mainland and
Langkawi, along with an archipelago of
around 100 smaller islands. Kedah borders
the states of Perlis in the north, Perak in
the south and Penang, to its southwest.
Alor Star is the capital of Kedah. The state
was once known for
its paddy fields and rice exports.
Today the government, in its Ninth
Malaysia Plan, has made preparations
for Kedah to prosper increasingly as an
industrial-based zone, under its Northern
Corridor Economic
Region blueprint.
Kedah in
general
REHDAKedah/
Perlis chairman
Datuk Rick Cheng
(
pix
) said: “Property
prices are surely and
definitely going up
although, not
drastically rising. Overall, Kedah is a good
place to purchase property and live in it.
Themarket is not as vibrant as in the
bigger cities but the good point about
Kedah property is that when the economy
slows down, prices in Kedah are not as
affected as in the bigger towns. However,
likewise, when the economy is up, the
prices also don’t fluctuate that much.
So it is a very stable, calmand reliable
market.” A reasonable stance, according to
Cheng, he thinks that Kedah is a peaceful
place, ideal for one looking to enjoy a quiet
and contented lifestyle.
plus points
• Lower cost of living
• Less hectic due to slower paced lifestyle
• Hardly any traffic jams
• Less pollution
• Cheaper land and real estate
• Government launched the “RumahMampu
Milik” affordable housing programme
• Kedah is being developed under the Ninth
Malaysia Plan
Property investors hoping to turn around
their purchases quickly andmake profit fast
may not find the Kedah propertymarket
exciting enough. “Especially those who
intend to flip their purchases or make huge
profits,” says Cheng. He adds that most
buyers purchase homes in Kedah because
they have some connection to the state.
“Many city folk are actually from smaller
towns. We find that those who have Kedah
‘roots’ (and fromother small towns) will
normallywant to retire in their hometowns.
A lot of people purchase property in Kedah to
retire in or for their aged parents, although
some buy as holiday homes, second homes,
and some, as very long
term investments.”
Up and coming
Areas in Kedah that are
up and coming apart
from the state capital
Alor Star are Langkawi,
Pokok Sena, Kuala
Kedah, Jitra, Changlun,
Bukit KayuHitamand
Sintok. “Since the new
government took over,
there have been a lot
more investment
opportunities. There are
five-star resorts and
luxury properties and
hotels like Four Seasons,
The Datai, St Regis and
Shangri-La who have
plans to come in. On the
other hand, there are
also budget and
economy hotels
andmotels. Generally
there is more activity as
tourism is getting a
boost from the state and
tourismministries,”
shares Cheng. While
Bukit KayuHitam,
Kulimand Sungai
Petani have always
been favoured towns,
newdevelopments
and highways that
link the smaller
towns in the outskirts
have broadened
the Kedah “developed”
boundaries.
With the government
widely promoting Langkawi
as a tourist destination, not
only are newhotels being built,
there is the Langkawi
Convention Centre coming up
soon. Newdevelopments like
this have caused reason for the
construction of highrise and
serviced apartments, a new
residential property trend on the
island. Other areas where
residential property is inwant
are Sintok, Changlun and Bukit
KayuHitamdue to the
establishment of UNIMAP
(Universiti Malaysia Perlis)
andUUM(Universiti Utara
Malaysia). There is also a logistics
hubwhich the government has in the
pipeline, close to the border. Further south in
Kulim, the industrial scene is flourishing
inline with the government’s plan. With
development of land on the rise, businesses
are sprouting and economic activity is
bustling. All this leave a positive effect on the
propertymarket in Kedah.
The meat and potatoes
Cheng says there are not many speculators or
investors in Kedah, thus, it is quite unlikely
for a property bubble to form, let alone burst.
“Alor Star property prices are relatively the
highest in the state, being the capital but
Langkawi prices are shooting up, higher than
any other district in Kedah.” Property prices
on Langkawi island cannot be compared to
those on themainland as transportation costs
to ferry thematerials across need to be
considered. “Overall, Langkawi is a vibrant
and tourist’s market. Youwill need to add in
at least 20% to 30%extra for transportation
for Langkawi properties. Sungai Petani is still
a hot favourite. Prices are reasonable with a
substantial amount of freehold land available.
Alor Star remains expensive due to low
supply and huge demand. Generally, the
propertymarket in Kedah is very reasonable
as the cost of living is still very affordable.”
Though affordable, Cheng says about
90% to
95%of land inAlor Star is gazetted as
Malay Reserve Land.
This leaves only 5% to
10% as Freehold.
“In Langkawi, about 80%of land is
gazetted asMalay Reserve Land; and the
balance 20% is very expensive, selling
between RM30.00 to RM60.00 psf. Land on
the outskirts like inGurun, Pokok Sena and
Kuala Kedah is much cheaper. Then again,
freehold land is difficult to attain throughout
Kedah.” The REHDAPerlis/Kedah chairman
adds that REHDA has been in dialogue with
the state government to find a solution to
solve this ‘problem’.
“‘Swapping’ of gazettedMalay Reserve
landwith Freehold land is not allowed
>Exploring theproperty scene inKedah
CUT AND KEEP
Interesting places and things to do
• If history and archeology is your cup of tea, learn about the
oldest Sultanate in Southeast Asia when you visit Alor Star
and the Bujang Valley.
• Quaint villages and small towns are a must to stop by:
Bukit Kayu Hitam, Kuah, Kodiang, Kuala Nerang, Kuala
Kedah, Tanjung Dawai, Merbok, Sungai Petani and Baling.
• Island hopping, snorkeling and scuba diving operators are
aplenty and often eager to take you on a tour to show you
the many islands of Langkawi and its Geopark.
• Hike up Gunung Jerai and stop for a dip at the waterfalls.
• Tourist attractions, historical landmarks and places of
interests include the Paddy Museum, the SevenWells,
Mahsuri’s Mausoleum and others.
• Known as the land of myths and legends, don’t forget to
persuade the locals to share their tales.
• Shopping for good deals and great buys is a must.
Kedah Transformation Lab
* The Kedah state government aims to have 40,000
affordable and low-cost homes constructed
throughout the 12 administrative districts in the
state by the year 2018.
* The homes will come under the PR1MA project
and fromprivate developers. These will include
single and double-storey terrace houses, as well as
single and double-storey semi-detached homes.
* They will be tagged between RM100,000 and
RM400.000. Application is open to all Malaysians
with a monthly household income of between
RM2,500 and RM7,500.
* The Kedah Transformation Lab was established
to boost the economy of the state. It was
initiated by KedahMentri Besar Datuk
PadukaMukhriz Mahathir.
for residential and commercial
properties. For industrial and in
some cases certain commercial
projects like resorts (in viewof
boosting the tourism industry),
the state government is willing to
consider swapping, provided the
Bumi quota is raised to 50% (terms
and conditions apply).
“‘Transferring’ of property under
Bumi quota to anOpen Lot is not
allowed. Then again, the swapping
conceptMAYbe applied and
accepted, depending on a case to case
basis,”
Cheng informs.
The state
government stands by the 30%quota
of Bumi lots for ALL developments
that do not involve swapping.
“If you look at commercial and
industrial property, most of ourMalay
friends prefer not to invest in these
property types. So, there are a lot of unsold
Bumi lots which other races cannot
purchase due to the status of the property.
The developers have to bear the holding
costs at the end of the day.”
Another problemwhich developers
face in Kedah is the length of time the state
takes to approve a project. “All these affect
supply and demand, and in the long run
will cause property prices to increase.”
Followour column next week to learn
about some real estate steals and discover
elusive opportunities in Kedah.
Northbound
possibilities
Swapping
- Bartering between land
that holds the Malay Reserve title and
Freehold title.
Transferring
- Changing the status of
a piece of property under Bumi quota
to an Open Lot.
Housing policies in
discussion between
REHDA Kedah/Perlis and
the state government
1) To retain the 30%Bumi lot quota for all
property types as the state government
has imposed a 50%quota for
“swapped” land.
2) The abolition of the “Release
Mechanism” for unsold Bumi lots by the
state government for housing project
developments. Developers will be at a
disadvantage having to bear holding
costs if unable to sell off these lots.
Primary owners intending to sell their
Bumi lots will also be at a disadvantage
having to sell only to Bumiputeras.
3) In terms of commercial and industrial
property, due to the fact that majority of
Malays prefer purchasing residential
property instead of commercial or
industrial; there are many unsold lots of
which developers have to bear the
holding costs.
4) It takes two to three years for a project
to get approved. This causes a back-log
in the amount of applications awaiting
approval. Thus, projects are unable to
be carried out, causing increased
demand and insufficient supply.
This will ultimately cause property
prices to increase.
LANGKAWI
ISLAND
PERAK
THAILAND
BUKIT
KAYU
HITAM SINTOK
JITRA
KEPALA
BATAS
KUALA
NERANG
POKOK
SENA
NAKA
GUBIR
GULAU
KUALA KEDAH
PENDANG
YAN
GURUN
SIK
BALING
SUNGAI
PETANI
KULIM
BUTTERWORTH
GEORGETOWN
PENANG
BANDAR
BAHARU
ALOR
STAR
