Penang mainland property – 2nd Bridge effect

A Toastmaster friend asked, ‘please comment on mainland properties’. I sent Whats App message to 10 friends, half of whom are Penangites and another half non Penangites. ‘With new bridge, would you be willing to move to mainland since it’s just around 20 minutes to places like Bayan Baru, Batu Maung?’ The property prices there are so much lower than Penang island. The answers I got was, 100%, NO. After listening to their reasons, I have come to 3 conclusions. Oh yeah, the focus for this short article is mostly on Batu Kawan.

Perception is not something which can change easily. For people who are staying in island, they already have the mindset that island was much better, more convenient and a lot of their friends stay in island. They already know that prices are much more expensive but since they already have a place, it would never work for them to sell the property and use the money for investment while getting a new and bigger place in mainland. Little worry though as some time back, Batu Maung had the same laidback perception. So did Sg. Ara, Relau.

Mainland, especially the Batu Kawan area is still very under developed. Even developers have yet to really make their presence felt over there and there are also no plans for any huge catalyst based projects as yet except for the opening of the new 2nd Bridge. In Penang, there are also such areas such as Balik Pulau. Nevertheless this is also changing a lot. There are even famous international school there now; Prince of Wales.

Majority of the population even those from outside Penang are all staying in island. Thus they have grew accustomed to the island. This is especially so if you have been staying for many years. Even in terms of rental for these non Penangites, it is still very affordable. RM550 is all you need to rent one whole apartment to yourself and if you share, the costs becomes even lower.

For Batu Kawan to grow, there has to be a catalyst project. Perhaps moving the airport over? I would fully support this. However, if I am a non Penangite who is moving to Penang for the first time and I stay in mainland, chances are, I will continue to stay in mainland. In fact if developers launch very nice projects such as some of those in Butterworth, I will most likely buy them if it’s my first property. I have been to my friend’s condo which is right next to Carrerfour. I think the condo’s great.   The question for Batu Kawan for now is just, ‘WHEN’ will it increase in price faster. It is not ‘IF’. Taking a longer term view and buying a landed property, it may be worth considering.

written on 18th dec 2013

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Penang’s mega projects can now be completed earlier

The sky in Penang seems brighter today than before the GE14? I believe in general, Penangites would welcome the announcement by the newly minted Chief Minister Chow Kon Yeow. He said this in an article in
TheSunDaily. “Need for Penang’s mega projects to be expedited.”
  Specifically, he said this in the article, “We have also received requests from Land Public Transport Commission (SPAD) to discuss how best to develop the projects.” Actually, this is a very powerful sentence because it showed that the federal and the state government are now working on the same side. Usually, this meant that there is now speed in everything that’s proposed. As long as the projects are beneficial to the state and its expedited, we are definitely looking at much brighter prospects for Penang moving ahead. Yes, also the property market even if everyone must still buy carefully because the number of unsold units remain high.
Here’s an earlier article.

Some of the projects being classified as state mega projects are the underwater tunnel project which includes the construction of three major highways, the Southern Penang reclamation project, Penang Sky Cab and Light Rail Transit (LRT) with an estimated total cost of RM46 billion. Chow said that the implementation of the two major highways connecting the Tun Dr Lim Chong Eu Highway to Air Itam and Tanjung Bungah to Teluk Bahang under the Zenith Consortium will start first since both of these major highways has received Environmental Impact Assessment (EIA) approval.  These mega projects are under the Penang Transport Master Plan. It will help to overcome traffic congestion in Penang and also connect the island to Seberang Perai. They are the 7.2km undersea tunnel project which will connect Persiaran Gurney to Bagan Ajam in Seberang Perai. The main highway construction comprises the 10.53km from Tanjung Bungah to Teluk Bahang, the Air Itam-Tun Dr Lim Chong Eu Expressway and the Persiaran Gurney-Tun Dr Lim Chong Eu Expressway.
Full article in TheSunDaily here.

For owners with homes in Penang today, you have made a great choice of buying and waiting. 🙂  Well, to those who believe the new CM of Penang, I guess it’s time that viewings start? Perhaps not yet the buying stage but the viewing stage can certainly start because property investment
takes a lot of time to complete. Earlier article here.
As for the actual projects that will proceed, I think it’s important that the it goes through the right stakeholders so that it is really beneficial to the state and not because it was something that was delayed and now it should be expedited. Connectivity is extremely important but the state government should also have an overall plan for the development of Penang for the next 5 years,10 years and more. I think this is the best time to sit down with the relevant stakeholders and discuss objectively. The element of ‘I am not on your side’ has been cast aside. We only have the Malaysian side today as demonstrated by majority of Malaysians. Happy investing.

Featured image source:
PenangPropertyTalk.com

written on 18 May 2018

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Penang new launchings in 2014

Would there be lesser property launches in Penang for 2014? Would Penang be the least affected property market? Thanks to Mr. Michael Geh, Senior Partner of Raine & Horne, we can view many of the upcoming official new launches easily within one page. Some of the projects below were already unofficially launched earlier where buyers have paid bookings etc. The dropout rate may be there if the price the buyers bought is now thought to be a little pricey. There are only a few condo projects in Penang at RM1,000psf today. Even for the completed projects which are RM1,000psf and above, there are very few units with lights on at night. Demand remains there but if RM1,000,000 for a unit of condo, how likely is it for a average salaried Penangite to buy? Rely on foreign buying? No doubt, the foreign purchase % will rise but you would be very wrong if your investment mode is to buy now and wait for foreigners to buy. However, if you have a 1,000sf condo at RM500,000 today, even at current slow market situation, I can already think of a few of my friends who would most probably buy one. A young friend of mine just bought one unit of Summer Place for RM650,000 with two car parks.

Well if you look at the types of properties to be launched majority remain to be condo. This is due to the scarcity of land as well as due to the price of land which has gone up way too much. The days of RM5 psf ended many years ago. The list below shows all the major launches and we can see the total number of units remain high, easily over 6,000 units. Based on estimation of 4:1 ratio in terms of 4 people to a house, this is still insufficient and Penang will face shortages soon.

There are a few projects below which will be priced affordably. Some would target at people who are more richer than majority. I term affordable as anything below RM500psf. The reason being, today if you intend to buy any condo in Penang at 1,000sf, it is highly unlikely that you can get one for RM500,000 or lesser. Thus the current slowdown gives you an opportunity because if developers continue to launch their projects even higher than before, think what will happen? For those who are buying for the first time, if you can wait do register for both the Penang state’s affordable housing or PRIMA first.

written on 15th Jan 2014

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7th July is a new beginning for Penang’s COVID-19 recovery journey. Penang is in SOP Phase 2 for the National Recovery Plan from COVID-19.  Congratulations all Penangites and please continue to take all necessary steps to keep this status and soon to move on to the next phase in the very near future. No dine in yet but next phase, can.

A few notable happenings.

#1 – restaurants are open from 6am till 10pm.

#2 – mechanics could open from 8am to 8pm.

#3 – malls are open again

#4 – finally stationery shops are allowed to open from 8am to 8pm.

Please refer below for all the rest.

The below image
comes from Majlis Bandaraya Pulau Pinang FB page.

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Penang: Prices up 8.6%, Income up 5.4%.

In his speech during the Malaysia Property Exhibition (Mapex) 2015, the chairman of the Real Estate and Housing Developers’ Association Malaysia (REHDA Penang) Datuk Jerry Chan Lim revealed that the house prices in Penang have been increasing by 8.6 percent annually while the average household income has increased by 5.4%. This meant that the gap between what one can afford has become larger over the years. As for the actual house price index, it has showed that the Penang house price has doubled since 2003. While I agree that the average household income in percentage for the majority has not kept up with the average prices, I have to say that from 2003 till today, for the engineers or even accountants who were in the right disciplines and roles, they would have more than easily doubled their pay too.  That explains why some of the more higher end properties in Penang were also snapped up in the years beginning 2009. This does not happen today because the prices has finally reached a stage where a breather is needed.

With regards to the gap between the average property prices versus the average household income, it is an important note for those who are thinking of buying a property in Penang. The affordability factor is becoming rather critical and this has caused the newer launches to be focussed more on price. The missing range of RM500,000 to RM600,000 are now the focus again. Anything higher meant that the location has better be the usual favourites. Sorry, mainland is nowhere near the top few favourites today. This is happening even amongst more famous developers. Yes, this is happening even for locations within the island. Read here:
Penang affordable homes? RM300,000 – RM650,000 lah

 As for the actual places as well as how to register or qualify for one, read here:
Penang Affordable Homes: Where and How.

Of course REHDA is also asking the state to be more flexible in the review of residential property plot ratio guidelines. This will allow developers to have more units to divide the fixed costs with. In the end it would allow for more affordable units for the people of Penang. Do you want to know what are the available properties in Penang? Do drop by MAPEX Penang. It starts from 21st and ends on 24th Feb 2015.

written on 21 Feb 2015

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Penang properties? From 9,667 units to just 3,909 units per quarter.

According to Michael Geh, the Raine & Horne Malaysia senior partner, the Penang property market in terms of number of transactions has dropped from its peak in Q4 2011 of 9,667 units to just 3,909 units in Q2 of 2015. In actual percentage, this meant that after nearly 4 years, the total transactions has actually dropped nearly 60 percent. I think we can sort of understand that the 9,667 units during its peak was not just due to demand but also due to many investors thinking of quick profits. The fortunate thing is that thus far, the property prices in Penang has not shown a drastic drop. In Q4 2011, the average price was RM234k and by Q22015, this has risen to RM407k. Read about some latest Penang numbers here:
Residential Property Market in Penang 2015

Nevertheless, Michael said that when it comes to good prime locations, the high-rise units are selling well. Besides that, the prices of landed residential units are holding their value to the scarcity. Once sold, it’s going to be impossible to buy back in the future. He said that another reason for the drop in transactions numbers would also be due to the stricter loan requirements which affected the approvals. The next catalyst that everyone would be looking for would be the Penang TransportMaster Plan (PTMP). Any area nearby the LRT stations will see its current values staying strong or even increase once people could see that moving around the island is going to be much easier in the future.

Meanwhile, C H Williams Talhar & Wong’s (WTW) Property Market Report 2015 showed that overall there are now more focus on landed residential developments in Seberang Perai due to the availability of lands at a comparatively lower land cost as compared to the island side. The current total supply of landed in Penang, as per the NationalProperty Information Centre is as follows: 141,599 units in total of which 104,804 units (74%) are in Seberang Perai and 36,795 units (26%) in Penang Island. Due to the scarcity, the prices have either stayed the same of increased slightly from last year. It also said the landed properties remain favourite even with more attractive and relatively affordable condominiums which are being launched in the market. In terms of prices, it is not likely to be increasing like the few years before because there are now much more choices coming into the market.

Actually, in terms of new developments, I think the PTMP would be the only major catalyst. This is because the new PTMP includes a plan for a new international airport as well. Without connections and more happenings in mainland, I can safely say that the Penangite islanders would still prefer to stay within the island. Just look at the traffic on the second bridge and you would get my idea. However, I firmly believe that prices cannot keeping up. In fact when I look at some of the condo prices in the island, the prices has either stagnated for past one year or facing downward pressure. Most of the time, this is also due to the current pessimism where wait-and-see is the order of the day. Yes, I believe Penang continue to have good property potential.

written on 8 Dec 2015

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Penang Properties – Now we get serious – GDV of RM25 Billion

A good news for Penang property market, even if majority of us including myself may not be able to afford it. Eastern & Oriental Bhd (E&O) has gotten a conditional approval from the Department of Environment (DOE) to develop the Phase 2 of its Seri Tanjung Pinang (STP) Project. It was reported that they have gotten this approval only after three years to start their Phase 2 development involving a reclamation of 891 acres of sea fronting land in Penang. For those who do not know, their STP Phase 1 is one of the most expensive in terms of price psf for Penang. Imagine, what’s the price going to be like in Phase 2? I would say the first launch may be cheaper to ensure a smooth start. We shall see.

Every time we hear of projects in Iskandar or even Klang Valley, the GDV would be in double digits. However when it comes to Penang, ahem, a GDV of over RM1 billion is considered huge. Except for selected projects like Penang World City or The Light by IJM. Do not worry, Penang has its own RM25 Billion GDV project now.
With the approval in principle from the DOE in the bag, E&O now needs to get clearance from the state government before it can start work on phase two. No issues expected though as STP2 is 21.2% owned by the Penang state government.

Personally, I feel that Penang still have room to continue growing for the next 20 years. The new 2nd bridge has just started. It’s effects will start to drive development but this will easily be another 8-10 years, all the way until IKEA opens and beyond. The number of Singaporeans flying in would only increase and not decrease. In fact, I always believe that Singaporeans would find it more at home in Penang than even Iskandar. If I am a Singaporean and I intend to have a place to retire, between Penang and Iskandar my personal choice remain to be Penang. However, if you ask me, what about for investment? I think both have their own strengths but if both properties are the same price and I have a 5 year horizon, I would take Iskandar but I have none there at this moment.

written on 24 April 2014

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Penang properties – Tanjung Tokong

I stayed for a few years in Tanjung Bungah when I was still working in Menara Boustead ( formerly PSCI). I stayed in Leader Garden. In fact that was the very first time I stayed in a condo because before that, I used to rent a room along the huge houses in Barrack Road. I loved condo from then onwards. I was able to enjoy the facilities, including playing tennis, squash and even swimming pool. It was also convenient enough because I can just walk out of the condo, go down the hill and I would have restaurants, mini market and even buy vegetables. During the weekends, I can drive for less than 20 minutes to reach Ferringhi beach. Alternatively, 20 minutes to Gurney Mall. Life’s good. 🙂  That was then. Today, jams have started.

If we compare Tanjung Bungah and Tanjung Tokong, I would like Tanjung Tokong slightly more than Tanjung Bungah though I understand there are more richer people staying in Tanjung Bungah. My reasons are ‘distance’ and ‘time’. Tanjung Tokong is even nearer to Gurney Mall and Georgetown when compared to Tanjung Bungah. Thus, the time needed to travel there is even lower compared to Tanjung Bungah.

Secondly would be potential appreciation. With the reclamation, more projects would be launched and thus prices would continue to hit new benchmarks. It will bring up prices in both Tanjung Bungah and Tanjung Tokong. When you buy at a matured area, the price increase would be more stable, gradual and perhaps slow. However, when new projects continue to be launched, prices of all existing projects nearby would naturally move up. One caveat, ‘only if jams are manageable’. Imagine too many developments and every time you go out, you need to be jammed for 40 minutes?

Besides all the reasons above, I give you one more new reason. Lifestyle. I can visit Straits Quay mall and even Tesco hypermarket and its just few minutes away. These are conveniences which appeals to a lot of working adults because after work, they can drop by for happy hour in the mall and then buy groceries at Tesco before going home. On weekends, they can have lunch at Precint 10 followed by a shopping at the nearby Gurney Mall or Paragon Mall. If their friends come visiting, they can bring them for seafood nearby and visit Ferringhi night markets.

Tanjung Tokong actually has nearly everything you need including even banks and famous western food, chicken rice, a small departmental store and lots of other eateries. Though considered a mature neighbourhood, it has lots more potential to grow and majority of Penangites I know prefers this part of Penang compared to the Sungai Ara / Bayan Baru area. Oh yeah, one of the best Starbucks with a open and relaxing environment is also in Tanjung Tokong.

Don’t wonder or wander any further. If your office is not too far away, Tanjung Bungah may be a good choice.

written on 10th January 2014.

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Penang Properties the bright spot in uncertainty

I read in The Star that RHB Research is bullish about Penang properties. It gave two reasons, the opening of the new Penang Bridge as well as the potential of many good news. Actually, I do not think the second bridge would suddenly bring up prices within 2014. It is definitely a good thing but to expect properties in Batu Kawan to suddenly appreciate seems far fetched unless there are any huge catalysts being announced by the state government or federal government.

Nevertheless, the property market in Penang would definitely be strong moving forward simply because of continuous demand. The chart shows the completed units in Penang by type of house. Total units in 2012 was 9,371 units. Is this sufficient? Actually, it is still very far away from satisfying the demand. Nevertheless, with so many uncertainties arising from the cooling measures, the sentiment in the market is more bearish and thus contributing to the current buyers’ market.

According to the projected population growth of Penang, by 2020, there would be a total population of 2 million which meant that the total growth of 400,000 is expected from now till the year 2020, just 7 years to go. In developed countries, typically, one property is inhabited by around 3. In Malaysia this is higher. If we assume 4:1 ratio, it means Penang would need an additional 100,000 units within 7 years or a total of about 14,000 units per year. Developers have better build faster or buyers should buy earlier because when shortage happens, the prices have no way to go but up.

Note though that if you are thinking that if I buy a condo for RM750,000 today it will rise to RM1 million, think again. There is a limit to the affordability of such properties. This is especially true when the said condo is also of a smaller size than 1,000sf because if it is for a typical family of 4, a condo with a size of above 1,000sf would be more comfortable compared to a 850sf one. If I am a first time buyer, it is highly likely that I would not be able to afford such a price. However for those expecting the prices to drop, I can only wish you the best because unless the world goes into another mortgage crisis, it is unlikely to happen. Note that even if prices increase by just 1% per year and you pay 10% downpayment for it today, after 5 years, your ROI is actually much higher than even FD interest rate. To be exact, based on simple calculation, the return is around 10%.  3 times better than FD, even if we assume property prices will increase by just 1% per annum.

written on 8th jan 2014.

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Penang Properties Update, Eco World, PDC and theme park

Many have asked me about Batu Kawan. My replyremain the same, what’s your investment purpose and horizon. For rental? Impossible. 5 year is okay for you, then yes I think Batu Kawan is indeed good for you. I no longer wish to repeat that IKEA will only open in 2020. Few days ago, end June, Penang Development Corp will be awarding the development of two projects to two famous developers. These two projects comprise of a theme park with a resort and golf course. Golf courses may not attract that many people. After all, why would I need a golf course view if I am not even playing golf in the first place? However, theme park may be a good catalyst for the new area which is near the Second Bridge.

As usual, there are still no formal announcement but sources said that one of them would be Eco World Development Group Bhd which is now already very famous with their spectacular growth, both in brand and in the projects they are undertaking everywhere in Malaysia, all at once. Out of the 190hs, Eco World would use 60ha for the golf course and the balance 130ha for a mixed-residential property project. With regards to the adjoining land measuring 121.4ha, a large Kuala Lumpur based resort and theme park operator would be taking it up together with an overseas developer which specialises in theme park development.

It does seem that Batu Kawan or even the mainland part of Penang is starting to heat up. The only issue is, there are at this moment, plans, awards, announcements but none are really building yet. Personally, I think Batu Kawan would be a good place if you have the right strategy in mind, which is to buy and wait. If you intend to buy the secondary property and rent out, I can safely tell you, not yet. Not even next year or 2016. Oh yeah, with the boom in transactions in 2011 and 2012, the new stock is starting to flood the markets. Thus we can see all new projects are facing pressure unless they sell at a lower price. Fortunately, I think they can sustain with a lower margin. No matter how great the economy may be, anything above RM500,000 needs a longer decision making process.

written on 3 July 2014

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Penang properties – what Singaporeans ask first

I was on duty in my previous company in a property show in Singapore. It was early morning, even before 930am and the show does not start until 10am. Yet, there were already a few Singaporean investors arriving early. They also try to listen to each and every seminar throughout the day and loves to ask questions if they are unclear. As they enter, we ask them about the properties that they were interested in to guide them to the right rooms. They also ask us questions.

What do Singaporean buyers ask first when they buy Penang properties? Prices? Location? Seaview? Actually, they ask all these questions but beyond that, the first question they always almost ask is, ‘Who is the developer? What other projects have they built? Is it a famous developer?’. Actually, if you think carefully, this is a very important question, especially if you are buying a place in another country. You may have a very attractive price which is 2.5 times lower to start off with. The location may be right smack by the beach with an amazing seaview from 10th floor onwards. You gladly pay the deposit and suddenly, the project did not start on time. Worst still, the project is delayed for many years!

These days, not many developers take your money and run away in Malaysia. This is because even the loans etc is released as and when they complete the different stages. Thus, it makes little sense for them to just take your deposit and run away. Nevertheless, you can see many projects are delayed. Some developers are well known to cut some corners here and there. 🙂  Don’t ask me who. Ask your reliable agent and they would be able to point out to you. Therefore, as a buyer, we should also be like the Singaporeans. ‘Kiasu’ and ‘Kiasi’ may be a good trait for property buyers, especially first timers.

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Penang property – Another RM1.5billion GDV project

I do not normally write on individual projects but RM1.5 Billion GDV is not a small one. The reason being this is Penang. Land is limited and thus GDVs do not normally become too huge for people to notice. Sunway Bhd has plans to buy four parcels of land in Penang for RM267.42 million. From these, they will develop it into commercial shops, SOHO and high rise residential units with an estimated gross development value of RM1.5 billion. I had hoped that Sunway may be buying lands in the mainland but apparently, it is located near Kek Lok Si temple. I would say quite a matured area and thus should have very high demand if the concept and pricing is attractive.

It would be very interesting to see what’s the price psf that they would be launching their SOHO. In KL, for a lot of matured areas, SOHO is already at RM700psf or higher. A Mah Sing SOHO in PJ area is over RM900 psf, though it comes with some discounts. In Penang island where the land is limited, what would be a good benchmark price for SOHO? The particular area that their land is located is also not known to have any luxury condos, more on landed properties which are not new ones. Nevertheless, my advice is to read about news of people queuing up when it’s launched. Unless of course they priced it higher than the sky. Haha.

Penang transactions has fallen and market continued to be slow and with new 2% levy being introduced, it should slow down the market further. At this point of writing, my friend is looking to negotiate for a better pricing for the condo that she wants to buy. For projects where a lot of units are available, the market is now on the buyers’ side. The bright point is, majority of all these sellers already profit a lot. Question now is just whether they want to profit lesser when they sell. Not a question of loss or profit.

written on 20th dec 2013.

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Penang property – Balik Pulau – Is it ‘far’?

I remember many years ago when my wife and I visited the Botanica CT showhouse in Balik Pulau.  Construction was going on feverishly.  The road leading to the project was winding and there were not too many developments on either side of the road. We went up from the bukit jambul hill road and it really does seem rather far. As we did not know the area well, it took us just 45 minutes. Why did we not buy the place? There were a few reasons but the chief reason was, ‘distance’.

Looking back, we lost the opportunity to earn good profits if we had bought the property then.  It was just less than RM300,000. However when I asked my wife if she would have loved to stay there,  she said no.  She said too far. I said, ‘everyday you also spend 35 minutes just to arrive at your office eventhough it is just in Bayan Lepas area while we are staying in Sungai Ara’. I think the main reason is still the distance perception. Whenever we drive over hills, it feels far away. However when we drive from Sungai Ara to Gurney mall, it does not seem so far. You feel the same? In KL, when drivers tell you that the distance is not that far, what they meant was, it’s less than 1 hour. However, in Penang, Balik Pulau or even mainland is considered ‘far’.

Just to let everyone know a public information, Malaysia’s largest developer, SP Setia has bought lands in Balik Pulau as well besides MTT which has a huge integrated project there together with their very own British international school and a famous one too. Prince of Wales International School. If you are okay with the driving around 35-45 minutes depending on how fast and which route you take, I seriously think Balik Pulau may be a place you may want to move to. Especially when you can sell your condo in Sungai Ara and get a landed property within Penang island. Is it still far? Well, if you ask me today, my answer is NO.

written on 20th dec 2013.

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Penang property – Balik Pulau vs Batu Kawan (current prices)

Let’s look at current prices first.

Current price. If we refer to
http://www.propertyguru.com.my
, we can see typically there are a few prevalent projects which are being published for Batu Kawan and a few projects for Balik Pulau. Projects in Batu Kawan would be Bandar Cassia and Taman Mutiara. Both are landed projects and the price psf ranges a lot, depending on the actual unit which is very normal for landed properties. The ranges were from slightly below RM200 up till slightly over RM400 plus psf. These prices are still very attractive as soon you compare to the area just after Penang Bridge 2. One thing Batu Kawan has which is famous is the Batu Kawan seafood village where a lot of islanders actually drive to satisfy their crave for seafood. Used to be cheap, now it’s affordable. 🙂

When we look at Balik Pulau, the choices are many times more than Batu Kawan. This was not the case many years ago. Nevertheless, there are still no condo projects. Mostly advertised ones are just flats. For landed, the most expensive listing was a RM3 million bungalow! RM600 + psf. Followed by a modern looking Ferringhi Park Residence. RM1.8 million or around RM465 psf. There are also quite a number of choices for terrace houses below RM400,000! A sum not even achievable for majority of the condos in Bayan Baru, Sg. Ara or even Relau. In terms of developments, there are also non stop new projects being launched in Balik Pulau and most likely in the near future, projects by the largest developer in Malaysia; SP Setia.

I asked only 4 friends, all non Penangites, all are working in Bayan Lepas Industrial Park, all are either IT / Engineering professionals. All four chose Balik Pulau though they mentioned if Balik Pulau becomes as expensive as those in Tanjung Tokong, they will then consider Batu Kawan. However one said, if it’s Butterworth, he may just choose it over Balik Pulau. There are more things there and it’s more happening. Balik Pulau is still mostly for durians instead of as a serious consideration for residential.

In my own opinion, I would also be choosing Balik Pulau if we are to compare these two.

written on 22 dec 2013

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Balik Pulau, is it ‘far?’

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Penang property – below RM600,000 and should be new

A close friend told me that after she has asked many agents in Penang, they kept giving her the same answer. ‘You can buy The Peak Residences.’ Walao, there are no other properties in Penang below RM600,000? This time, I did not search, I jogged my memory a little and said, actually there are quite a few. However, you wanted to buy something quite new, then I think the answer is quite clear. I also gave her another name XXX, she said No. It’s quite new and the leaking has started! She also said no to Summer Place which she said Jelutong is not her cup of tea.

For someone buying a second property, she is really quite choosy. This coming weekend, she will be viewing quite a number of properties, including Oasis, The Peak Residences, Sunrise and perhaps decide on which one she should negotiate for the prices to be lower. With the current market slowdown and also the fact that The Peak Residences had just given out the keys, it may be wise for her to concentrate and see if there is just one owner who needs the money and may be willing to sell lower than usual. Actually, at RM580psf, The Peak Residences would be one of the cheapest condos you can buy in Tanjung Tokong area. It also have the one and only garden at the top floor with a spectacular view of Penang.

Another friend said that prices may drop further. I told the friend, prices are always demand vs supply. Currently, there are a lot of owners looking to sell, thus prices are easier to negotiate. Once all these owners sold off and you start to reach the tougher negotiators, that’s when prices may start going up. Nevertheless as one of my readers said, if crisis happens again, the prices would definitely be coming down. He said it may happen in a few months or in a few years. 😛

written on 16th dec 2013

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Penang property expensive versus expansive

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Penang property market getting bigger and exciting

I think Penang property market is starting to get more advanced. There was a time when developments were just a few hundred million in terms of gross development value (GDV). Then the bigger players arrived and bought huge pieces of lands. There are now more integrated developments. On a yearly basis, if we use Q1 2015 as a benchmark the total transactions in terms of amount would be around RM6.2 billion. Do refer the attached image. Well, according to a report in a local daily, the total new launches in Penang by the major property developers are up to RM16.3 billion. All these launches are supposed to be launched within the next two years despite the current negative overall environment.

This RM16.3 billion of new developments include GDVs from IJM Land Bhd, Eco World Development Group Bhd and Sunway Bhd with RM4 billion, RM10 billion and RM2.3 billion respectively. As for those with existing developments, they include
Mah Sing Group with RM2.09 billion GDV, Tambun Indah Land Bhd with RM4.1bil and Penang’s very own Ivory Properties Group Bhd with a GDV of RM2 billion. Yes, these would be just the major ones and there are still many other smaller ones. These new integrated developments are getting popular because many buyers are now exposed to all these lifestyle products. As for the developers, due to these developments being integrated, they are able to have the best of both worlds; residential and retail portions.

I think it’s great that majority of these developers are big names. They would definitely have deeper pockets and should be able to still continue launching these projects and attract many of their loyal buyers. As for investing in properties, it should always be for the long term. Based on the high loan rejections thus far as per many property players there, I think the market remain healthy and should have a more orderly price adjustments for both the developers’ launching price and buyers’ more objective assessments. Gone are the days when launchings in Penang meant queues which form days ahead. In fact Penang is having many new affordable projects from both the state government and private developers that I think would definitely have  cooling effects which will benefit Penangites too. In the meantime, if you need a home, anytime is a good time to buy. Just buy within your means.

written on 17 Aug 2015

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Penang property market Q1 2015: Qty down, RM up

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Penang property choices – RM400,000 – RM500,000?

A close friend asked me what properties can she buy because she would really want to buy a property for herself. I replied, ‘Regency Heights’. She said aiyo, why you have only one proposal? I am looking for something from RM400,000 – RM500,000 and I want it to be in Penang and I hope the size can be above 1,000sf. My mind was blank. I said, ok, let me do some homework so that both of us know what are the types of properties available if you are looking at the RM400,000 – RM500,000 bracket. A brief search in
http://www.propertyguru.com.my
 revealed following:

Island: Sunny Ville Condo (the one near USM), Midlands Condo in Burmah Road, Desa Bukit Jambul, Halaman Sentosa (Gelugor), Lakeside Towers, Villa Emas, E-Park.

Well, I found quite a few. The next thing that we need to do now is to view the properties, do some online search for them so that we know more about them. Whether the management of the place is able to do a good job. Are the condos clean? Would there be huge parking problems if there is just one car park. Are there a lot of units rented out to students / foreign workers. Are there a lot of empty units? If majority of answers to all these questions are positive, my advice is just buy and stay.

Buying a good property is actually easy if only we do our homework so that the risks are minimised. In terms of 1,000 sf condo which is well maintained, RM400,000 is definitely a very attractive price because these sizes are perfect for upgraders from smaller apartments as well as families of 4. The only downside for these older condos would be the parking slots because newer condos of 1,000 sf typically comes with 2 car parks. That would be one point against you when you want to sell in the future. Car ownership will only increase, never decrease.

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Penang property choices? Whether landed or high-rise, plenty of choices to choose from.

I know that many kopiandproperty.com readers are from Penang or have high interest with the Penang property market. Let’s look at some of the potential viewings which we could do during the weekends. Of course, also depends on the MCO situation yeah. Thanks to my good friend,
Kevin Low of Rahim & Co,
we have these easy to refer images of the potential choices in the Penang property market.

Landed Homes are always popular

Prices range from just RM329,000 for Bertam Lakeview in Bertam a 1-storey terrace which is due to be completed in 2022 (means started some time back) all the way to starting prices of RM1.9 million for a bungalow in Brydon @ Eco Horizon in Batu Kawan which will be completed in 2024. (Means just starting now).

It’s not surprising that nearly all of these landed properties are in the mainland part of Penang yeah. This is because of the price. For those who ONLY want landed homes within the island, there’s the Tierra Residences in Bayan Baru which is a 3-storey terrace and priced from RM1.18 million onwards. Just note that the typical reason for 3-storey is also because of the land size. Building up versus wider saves space and the price could also be lowered too.

High-Rise will be prominent moving into the future

Here, we would have more choices whether within the island or the mainland of Penang. Prices also start from the affordable category; RM316,000 for 1 City Residences in Juru (mainland Penang) and this will be completed in 2023 and all the way to RM778,000 for a condominium called Queens Water in Bayan Bay. (within Penang island).

If we look on an overview basis, high-rise units may just be the only way Penangites who must stay within the island to stay within the island. (Yes, there’s always that debate between the islanders and the mainlanders on whose food is better too. This is despite both being known as Penangites and both are Penang food)

Happy evaluating based on your needs and wants and of course how much we could really afford. As someone with properties in Penang, all I can say is that Penang remains a very small state and once we are back to normal, Penang will be jammed again during holidays and weekends with tourists from all over Malaysia and when flights resume, foreign tourists as well. This is good for the state’s economic growth. We just have to ride this out first starting with COVID-19 vaccinations.

The full report by Rahim & Co can be downloaded here.

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Less than 1% affordable homes in Penang unsold

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Penang property (condo) – Buyer’s market today

My friend asked me if she should wait for the market prices to drop further. She was buying her first property, for her own stay. I told her, I seriously think currently you have the upperhand. The total transactions has gone down so much that I think some sellers may be pressured when they read about news in the market that there are potential bubbles building up, transactions for Penang properties down over 30% year on year and there has been quite a lot of new condos flooding the market recently. This meant that the negotiation powers of sellers are weak. This is especially for new projects because at the same time, there are so many sellers / units being put into the marketplace.

She said that the prices are still high. I told her, if she is serious, after viewing the unit, offer a price she thinks is reasonable for the property. In fact if  she wants to try her luck, give a number which is even below what she believe the market price to be. Who knows, the buyer may want to part with the property due to the many uncertainties and also the new RPGT rates which will come into effect next year. She has viewed quite a number of units and I believe she will decide the ones she really loves and will give her offer soon.

For market prices to continue to go down, the prices must be so high that no one could afford and there should be a world crisis. At this moment, no matter which media you read, there has been a lot of pessimism. The demand must also be weak or else the prices cannot continue going down. For example, current price is RM500,000 and the condo is in a good location and the developer is a reputable one. If the price comes down 10%, what would happen? Well, a lot of people would enter the market and buy the units because they really needed a place to stay. Would there be a chance for the property to drop further to 20%?  I think you know the answer. No idea how long it can last but for condo market (Penang), especially new ones, I think it is buyers’ market currently.

written on 22 dec 2013

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Penang property RM600,000 and below and new.

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Penang Property Convention 2018. FREE for Early Birds.

Taking Miichael’s words, ‘Learning about property investment is extremely important before we start. This is one event that everyone should not miss.’  Now, for my own sentence. Yes, I am one of the speakers sharing my views about working professionals and their property investment. Personally, I think it’s important for everyone to have a roof over their head and many times, buying earlier is better too. Oh yeah, if you are looking for a talk to learn how to buy 10 properties at one go, I do not think this Penang Property Convention 2018 is for you. For the rest who believe property investment if for the long term, these topics may be of interest to you:
Click here to register for FREE Early Bird tickets asap.

National and Penang Property updates

Is property bubble coming?

How to be a millionaire property investor?

10 mistakes in property investment

How to increase your ROI using AirbnB

Pre-Budget forecast

Will SST affect the property market

Property Forum and more…

Event Details

Venue: Vistana Hotel, Penang

Date: 29th September 2018

Time: 9am – 5pm

Click here to register. FREE only for Early Birds.

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Penang Property Digest – Nov 2013

What has happened in the Penang property market in November 2013? Here’s a digest of the news reports. 🙂

Shared Ownership Scheme –  Chief Minister Lim Guan Eng launched a scheme to help low-wage earners buy their own home through a Shared Ownership Scheme. For those who qualify, 30 per cent interest-free funding would come from the Penang state government. Thus, the applicants need to only apply for 70% loan.

Penang Second Bridge – It enters its final 1% construction stage and is slated to open before year end. It is ranked amongst the top 20 bridges in the world and is expected to reduce the current traffic at bridge one by 25%.

Major market for Penang properties – Medan continues to be a major buyer of Penang properties. This is especially so with the many Medanese who travels to Penang for medical treatment and thus may purchase properties here for staying during recuperation or follow up.

Budget 2014 effects on Penang property market – Dato Jerry Chan, REHDA Penang’s chairman said that the impact of the proposed goods and services tax (GST) on the property sector would directly/indirectly increase costs as the construction materials were not exempted.

Increase of assessment rates in 2015 – Chow Kon Yeow said that MPPP has started the revaluation exercise and it will affect some 274,000 commercial and residential owners. This is in addition to the 20% surcharge on water announced earlier.

Possible transaction slowdown for Penang properties – Henry Butcher Malaysia Penang Sdn Bhd director Dr Teoh Poh Huat said that while there would be knee jerk reaction, “Penang’s property market is relatively strong, given that the state is underpinned by healthy fundamentals, such as its young population demographics, shrinking average household sizes, low unemployment rate, vibrant local and foreign investments, state income levels and bright job opportunities.”

Levy of 3% on foreigners – Penang government is planning to impose a 3% levy on properties bought by foreigners to curb speculative property buying activities in Penang. Nevertheless, according to Dato Jerry (REHDA Penang chairman), this measure is not a deal breaker since it is much lower than stamp duties in regional markets like Hong Kong or Singapore.

Next article suggested:
Why buy Penang Property – my personal reasons

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Penang Property Essentials 4-In-1 on 18th June 2016

A friend told me that most of the time property events happen mostly in Kuala Lumpur. I must say that this is not true. Penang has many good property events too. I love to attend events, especially good ones where I get to learn more ‘kungfu’ to continue my investment adventure. There’s an upcoming one called Penang Property Essentials 4-in-1. The highlight of the day would be for those who believe in the longer term potential of property investment and that now is the best time buy. Developers are much more willing to listen and be accommodative. Within this event is Malaysia’s First ever LIVE BIDDING for limited units of
Mont Residence luxury condominiums.
Better
register
 or call the numbers soonest for the potential to own a unit at an irresistible best price.
 Besides that, we get to learn about the following too.

Mortgage Must-Knows:

For those who have often heard the saying of ‘high mortgage rejections,’ it may be good to understand a little more. Sometimes, those who got their mortgages approved were those who happened to do the right things instead of simply applying. Just look at the industry. On one hand, many are shouting it’s hard to get their loans approved but the authorities are saying that they have not done any extra tightening recently. Come and listen and then ASK the expert speaking during the event.

Fast Track to know-how:
It’s not whether we buy or we don’t buy. It’s about whether are we buying the right property for the right reasons. Do we really understand enough about what we intend to do before we buy? Is it for our own stay and hedging against inflation? Is it with the potential for positive capital gains? Are we looking at ensuring steady rental and potential positive yields? Come and listen and then ASK the expert speaking during the event.

Estate Planning for What Ifs:
I am very sure majority of us feel like a Superman. Nothing unfortunate will ever happen to us. Truth is, when it happens, it would have been too late to do anything. Do google and read about all the unfortunate cases where the loved ones actually loses out to strangers simply because of poor planning. These strangers may have been missing for a very long time but if they are related to us, they may get everything we own today.

Master Mak’s Fengshui Analysis:
There are many reasons why the wealthy spend a lot to get their fengshui right. Numbers are especially important because it may affect many things happening in our lives. Come and listen to him on Complementing the period 8 for wealthy and prosperity.

Happy learning and continue investing. Penang property market is a definite addition or a diversification target beyond just Greater Kuala Lumpur.

written on 29 May 2016

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Slowing market and the auction potential

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Penang property – expensive versus expansive

Expensive areas would include pulau tikus where only the rich or the super rich can afford. Even the condos are very expensive. For example, Desa Melor, Bellisa Court, Villa Indah, just to name a few. I think price psf is over RM1,000. However, in terms of ‘expansive’, pulau tikus have no huge tracts of land to build more and more. In fact, typically new developments are built on small pieces of lands and may even be taking over car park grounds etc. If you look at the price psf, do you think it can grow to RM2,000 psf? 100% up from current price? Maybe it will. Maybe a sudden happens where everyone just wanted and must stay in Pulau Tikus. 🙂

What is ‘expansive’? These are the areas which still have more / larger tracts of lands which can be developed, compared to the expensive areas. Newer areas, typically which Penangites feel ‘ulu’ or ‘not so hot’ areas. Secondary places that comes to mind include Bayan Baru, Sg. Ara, Relau etc. These areas still have more lands to expand as compared to Pulau Tikus. The good thing is, the price psf is also much lower. Typically between RM400 – RM500 for majority of the 1,000 sq ft condos. Can the price go up 100%? to RM800 – Rm1,000 psf?  It may not happen so fast but in terms of probability, I think you have the answer.

Penang island is still an island. When the population continues to grow, it no longer make sense for one area which is just 30 minutes from one another to be priced so much different. The premium will still be there but over 100%? My personal opinion, buy in ‘expansive’ areas. Meaning still have continuous growth. Not in expensive areas where you need huge capital to invest and in terms of actual return based on your capital invested, the % is likely to be very much lower. I don’t like to speculate, thus I prefer to buy in areas where the prices would grow because more people are staying, not because it’s a favourite place for a few.

written on 13 dec 2013.

Next suggested article:
Penang Property Potential

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Penang property for rental – two better than one

My brother discussed about buying properties for rental recently. He asked, if he could afford only a RM400,000 loan today, should he buy one property at RM400,000 or two at RM200,000 each. I told him, as long as he understands the rental market, both options are okay. However, if I must choose one, then it would be owning two properties of RM200,000 instead of one at RM400,000. There are three reasons why I say so.

Spreading risk. The amount of loan is the same but the risk is now halved because assuming you are not able to rent one, but you can rent the other, you only lose half. This is especially if your tenant just moved out and you may need a little time to find a new one. Reason being you do not want any Tom, Dick or Harry to rent your place and then refuses to move out or cause you any other problems.

Easier to rent out. It is also easier to rent out a cheaper apartment compared to a more expensive one. This is especially in Penang where even if you buy a grossly expensive place, you would not get a grossly high rental. New graduates moving to Penang for work are plenty. As long as you are able to put up online rental notices or even get an agent to help out, it should be very easy.

Easier to sell. The market for lower priced properties would always be higher than the market for higher priced properties. That’s the reason why if you see the national average house prices, it always seem very low. The reason being the quantity of lower priced houses are many times that of the higher priced ones. Thus, when they take average, you would see the number is on the low side, especially if you compare it to the condo you are about to buy.

Note, there are many reasons why RM400,000 property is better; lesser headaches, lesser time needed to sign the documents, potential capital appreciation may be potentially faster as it belongs to the upgraders category instead of first timer property and more. However, since this is a question for me, I prefer two instead of one.

written on 16th dec 2013

Next Suggested article:
Penang Properties around RM250,000

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Penang property for rental

Is it easy to rent out your property in Penang? The answer is yes, as long as the location is not in a secluded spot. If it is in BJ, Gelugor, Relau, Sg. Ara, Bayan Baru, then it is even more easier as there are a lot of people who work in the manufacturing zones in Bayan Lepas. A lot of these people are not from Penang but are outsiders. For example, from Kedah and Perak. Normally for first few years, they are unlikely to buy a place and thus renting is their option. An online search reveals the following rental asking prices for a 700 sf apartment in Penang.
http://www.propertyguru.com.my

You can see the choices for rentals from the lower ones up till the highest ones. Is this considered a good rental? Depending on when you bought the properties, answer may be a yes or no. If you buy today for rental, it is unlikely that you will have good rental yields, perhaps even just enough to cover your mortgage or lower!  Nevertheless, be reminded, both rental and property prices will increase. Thus even a 1% rise for a RM250,000 property meant RM2,500 every year or an increase of RM200 per month. Rental will depend on demand and supply. The more people are attracted to work in Penang, the highest the rentals will inch upwards. I say ‘inch’ and not jump because rental rates are much more stickier compared to property prices.

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Gloom and Doom for property market?

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Penang property market is vibrant in H1 2021

Penang’s vibrant property market in H1 2021.

I have not been to Penang for 1.5 years. My last visit was in 2020 when we were allowed to travel. I do hope I could visit Penang again soon since I will be fully vaccinated by 24th July 2021.
Yes, it’s with the ONLY vaccine which is proven to offer protection up to a lifetime! Read here for the full news.
Coming back to the Penang property market. It does seem that there are some positive news.

Article in nst.com.my
 According to Knight Frank Malaysia’s latest publication, the Real Estate Highlights 1st half of 2021 (1H2021), the Penang remained active despite the ongoing Covid-19 pandemic. The firm said the residential sub-sector is expected to remain resilient supported by initiatives under the various stimulus packages and the National/State Home Ownership Campaigns which have been extended till end 2021 and June 2022 respectively.

Please do read the full report with a more charts here:
Article in nst.com.my

There is just one state which majority of Malaysians have gone to and will still go again. Okay, I have no idea whether my statement is true but I have not met any friend who does not like Penang.    Where else could we find a state where most electronic engineers would find their dream job and could have diversity of good food during lunch and then food again during dinner?

Then, on the weekends, visit a national park within the island or even go and visit Georgetown a UNESCO Heritage City, the Ferringhi beach just half an hour from the city centre and more… Please never forget that Penang International Airport (PIA) is also just minutes away from the Bayan Lepas Industrial area.

By the way, loving Penang and buying a property there are two different things yeah. Get to know more prior to buying. Yes, I still have properties in Penang even though I have moved to KL for the last 8 years. Take care and stay safe and even if you are fully vaccinated, you can still be infected. The only advantage is that the chance of being hospitalised is low.

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Penang as your Home Sweet Home

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Penang Property market – around RM250K

When it comes to the Pearl of the Orient, Penang, many people have their opinions on affordable property. Some say affordable property is below RM400,000.  Some say, nothing more than RM250,000. Today, let us look at properties available to you if you can only afford a property in Penang of just Rm250,000. For an easier explanation, below is a chart showing what is the monthly payment like for a RM250k home loan.

What is available for RM250,000 or lower?  In Penang? Sure? Based on for sale listings in property guru.com.my, the results were too many to state but for projects which occur more than 5 times, I will list them here.

Mutiara Perdana apartment, Sri Wangsa apartment, Desa Permata, Desa Bayan, Vista Condominium, Taman Seri Sari (Sunshine Garden), Jelutong Park, BJ Court, Sri Impian, Villa Kejora, Sri Aman, Suria Vista, Tanjung Court, Azuria apartment, Jade View and even one which is over 1,000 sf – Taman Permai Kumbar.

I have been to majority of the projects listed when I was looking for my first home together with my wife. They are ok, some are cleaner, some have huge swimming pools, some need security card access but none are so run down that no one is staying there etc. Thus, if you are looking for a RM250,000 apartment / condo in Penang, don’t worry, there are still such choices in Penang and I think we can call these Penang affordable properties.

Oh yeah, for those looking for LANDED, there are also choices in mainland such as Machang Bubok, Butterworth and Bukit Minyak. Majority are terrace houses. However, for these, I have never viewed before.

My wife and I stayed in Villa Kejora for 4 years, swam in the pool once every few months, held BBQ parties and played ping pong no less than 50 times. I think we need to have the right expectations set unless we are multi-millionaires. 🙂   If you are in the midst of searching for your first home, happy searching. Remember, even if a RM250,000 apartment increase in price just 1% every 2 years, that’s RM104 per month. Still want to wait for price to reduce? Possibility is definitely there if there’s a worldwide recession but if you are renting, you are better off owning a place you call home.

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Penang Property Potential

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Penang property market is different from others

Remember the news about how transactions went down by double digit but the the prices still went up 6.7% in Malaysia in 2013? Actually, Penang’s property market is different. Total transactions dropped 24% versus 2012 which is a huge number. However, the value of the transactions remained the same as 2012. Thus, the average property price in Penang is RM400,565.  Don’t worry, you would not find too many of such units. You will find many 700 sf units at around RM250K and Condos in island are typically RM650,000 or higher. Thus, we come to the average price of Rm400,565.

If we look at the primary transactions, this has dropped 62% compared to 2012 which is a huge drop. However, secondary market showed a drop of just 6.4%. This is despite the fact that everyone seemed gloomy and everyone said that Penang was about to suffer a bubble burst, which has yet to happen. In fact, looking at how the amazingly high number of transactions in the primary market in 2011, it meant that the new supply would be coming into the market beginning mid 2014 till mid 2015. Whether the market can absorb these demands would determine how the market would react. Yes, I believe there will be price pressure when everyone tries to sell at the same time. I seriously do not think they would suffer losses but perhaps for those who can’t hold, they will be selling at lower profit that what they envisioned currently.

Oh yeah, Penang rental market is still the same. No market. A friend asked me today, should she buy Penang properties or KL properties. She said her main reason was rental. I told her that until today, Penang does not have a good rental market except for very few units which may have good returns as they were bought much earlier on. Thus, if we are looking at rental, KL is as much better market. Even on a longer term, I think Penang’s property prices will not be increasing like previously anymore. A RM250K condo can triple within just 6 years. These days, I think Rm500psf is a typical average for the condo and this should be the price because while demand is strong but when condos are already at RM500psf, I think it will take some adjustments in mindset before the price can continue to inch up. Just remember, if you want to speculate, the chances to get burnt will always be there. Rental remain my top choice for now.

Thanks to Michael Geh, Senior Partner of Raine & Horne for providing me such a nice chart.

written on 19 May 2014

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Penang property price cheaper today?

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Penang property market – Number and Values of Transactions

Thanks to Michael Geh, the Senior Partner of Raine & Horne, we have this chart comparing the number and value of transactions by category of market in Penang from 1H2010 to 1H2013. We can see the actual sudden increase was from H1 2010 to H1 2011. The primary market transactions grew nearly 700%! This however went down in 2012 and for 2013 it went down further. Thus, if we look at the number of units which are completing soon or completed, it should happen within 2014 / 2015. I just remembered on top of my mind I have a few friends who bought The Golden Triangle which will be completing in 2014. Two bought it for own stay; upgrading from their current smaller units while 5 others are investors. Due to the price they paid which is less than RM350,000, the profit is quite certain. It’s only whether they would be willing to sell it cheaper than the current typical pricing. That’s the question.

When we look at the most recent H1 2012 vs H1 2013, the total transactions went down 28% while the value of transactions went down just 4.4%. In other words, prices continued to increase despite fewer units sold. When we look deeper into just the primary transactions, it has nose-dived 60% and yet, the value has gone down by just 17%. In other words, prices of primary property transactions has gone up a lot. Perhaps too much for comfort. Perhaps time for a rethink of what to launch for the developers.

The number of secondary transactions went down by 14.5% and the value went down by nearly 1% which meant that prices has actually inched up by double-digit within past 1 year for secondary market. This is still quite significant though no comparison to the primary market.

I still think if you are getting a place to stay, it does not matter whether it’s secondary market or the primary market. Thus, if we look at the monetary side, I think the answer is clear, perhaps you may want to think about buying a secondary instead of buying new.

written on 18 Jan 2014

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Condo transactions down and possible price correction

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Penang Property market slowed down – Updated

From Penang, I got to know that one developer who launched its condo project without free car park is now giving one (1) car park. However, my expectation for ANY new condo project is two (2) car parks. Thus far, this has been true for all new launches from established developers as well as newer ones. However, there are still minority of developers which are still giving just one(1) car park. I think with the market going down, the developer has no choice but to offer something extra. In fact another developer called up their buyers and said a rebate of 5% is now available to reward its loyal customers. Actually, I think this is because they wanted to relaunch their project at a lower price since it has been selling for many months and so many units are still left. Another developer decided to just slow down all their marketing activities because it does not want to appear too ‘desperate’. No doubt, there are still many successful launches, right location, right price and effective marketing but the slowdown has started to affect some of the inflated confidence of many of these developers who once thought the market would just buy whatever they offer.

Everyone I know has been saying that the property market is slowing down. Well, everyone except one agent who told me that his business is still very good. In actual fact, market is slowing down. This is the effect from the many cooling measures implemented and will be implemented in the near future. Buyers are now also more cautious and thus may want to wait and see before they commit to a huge mortgage. What about the developer’s side? For those whose projects are yet to be launched, we can see they are now being delayed. I think this is a good move, rather than having bad sales if the location is not the best or the pricing seems to be too high compared to the perceived value. How slow is slow? Let’s refer below:

Penang’s total transaction has gone down close to 30% year on year. KL’s transactions has done down close to 50%. Selangor’s total transaction went down slightly over 21%. The only one still showing huge growth is Iskandar. However, even Iskandar has slowed down though many developers are now snapping up parcels of land with full anticipation of a bullish time in the near future. Just look at all those huge names from China and you would understand what I meant.

The question is, how long would this period last? Well, in terms of demand, it is still there but the developers has to relaunch or think again. the magic word is ‘affordability’ instead of huge profitability. No one wanted the developers to stop launching but the time to simply launch anything has passed. Many prominent developers are launching medium priced projects instead. I think this is the correct way to go. I reiterate, if you are buying for own stay, this is the best time to negotiate for a good price for the unit you have been eyeing. You may wait for market to soften further but secondary market has not increased as much as primary since the beginning. I seriously wonder how low would it go. Of course if it really does go lower, then I may buy Penang instead of KL.

Updated on 20 April 2014

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Penang property market slowed down

Everyone I know has been saying that the property market is slowing down. Well, everyone except one agent who told me that his business is still very good. In actual fact, market is slowing down. This is the effect from the many cooling measures implemented and will be implemented in the near future. Buyers are now also more cautious and thus may want to wait and see before they commit to a huge mortgage. What about the developer’s side? For those whose projects are yet to be launched, we can see they are now being delayed. I think this is a good move, rather than having bad sales if the location is not the best or the pricing seems to be too high compared to the perceived value.

How slow is slow? Let’s refer below:

Penang’s total transaction has gone down close to 30% year on year. KL’s transactions has done down close to 50%. Selangor’s total transaction went down slightly over 21%. The only one still showing huge growth is Iskandar. However, I think this may also slow down in the near future because of the requirement that foreigners can only buy properties worth RM1 million above in Malaysia. Majority of the properties launched which attracted a lot of Singaporean buyers were below RM1,000,000. Therefore, in order for these people to accept the new requirement, it may take some time. To put into perspective, RM1,000,000 is not low but definitely is not considered very high because just right across the causeway, HDB flats of 700sf in good districts are already more expensive than RM1,000,000.

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Penang Property Market – What’s happening?

Do you know the actual happenings in Penang property market?  The actual numbers? You have read from a lot of sources. You may have attended a lot of those previews and may be thinking of going for those workshops which will set you on the right path to be a property multi-millionaire. Most importantly though is that we continue to read, continue to learn from all those who are involved directly in the real estate industry. Today, it is my honour to have someone to share with us based on actual numbers from the ground. Let’s learn from Ken Lim from PenangPropertyTalk.com

Q1. Statistically speaking, property transactions in Penang has been on a downtrend. Based on all the new properties being announced in
penangpropertytalk.com
, do you see the numbers also on a downtrend? Why?

Ken:  For new properties announced in PenangPropertyTalk.com, I could see a significant downtrend in 2012. Only 88 projects were introduced  compared to 137 projects in 2011. This represented a drop of nearly 40%. The downtrend continued in 2013 with only 80 projects announced.
However, for 2014, I think it is on an uptrend again. Within first 8 months, I have already published 76 projects and there are 4 more months to go till end of 2014.

Secondly, developer are also shifting their focus to mainland . Please review the table below:

Year

Projects

Island

Mainland

2011

137

66%

34%

2012

88

64%

36%

2013

80

56%

44%

2014 (as of August)

76

42%

58%

Of course, please be reminded that the potential uptrend in project announcement may not necessary translate into more transactions.
I personally think that the demand (either for own stay or investment) for properties in Penang has not changed a lot while the property curbing measures by BNM and stricter loan approvals has contributed to the downtrend in transactions
.

Q2. Between a new property launch in island versus one in mainland, which normally gets more attention. Why do you think that is the case?

Obviously, property launches in the Island gets more attention. There’s always a significant spike in the website traffic whenever I publish a new project in the island, particularly for projects in Tanjong Tokong, Bayan Baru, Relau and Sungai Ara area (most popular are those selling below RM600k).
The demand for these areas mainly come from the buyers in the electrical and electronics industry. There are people buying for own stay, backup (for various reasons), and also for investment. More than half of the people I know has more than one property in Penang.

However, the gated and guarded housing schemes (especially those with facilities and easy access to Penang bridge) in the mainland are gaining traction since last year. Many are buying for upgrades and some are from Island.

Today, a 2-storey terrace house in mainland is selling at around 600k and achieves more than 80% take-up rate within a few months after launch. I was also told that a gated & guarded 3-storey semi-detached nearby Jalan Song Ban Kheng in Bukit Mertajam was recently transacted near to 1.2 Million in the secondary market.

Q3. Most of the time, what is the type of property which gains the most attention; number of views or comments etc.

In Penang Island, a condominium in a desirable locations which is selling around 600k or less will gain the most attention. The desirable locations includes Tanjong Tokong, Bayan Baru, Sungai Ara & Relau.
For the mainland, there are a lot focus on gated and guarded housing scheme. Properties with prices below 600K seems to be a sweet spot. This is especially when coupled with easy access to the Penang bridge, such as Jalan Song Ban Kheng, Jalan Baru and Seberang Jaya.

Q4. Personally, do you agree that properties in Penang are getting more unaffordable or do you still see lots of values both in new launches and secondary properties?

To be more accurate, I would agree that newly launched properties in a desirable location are getting more unaffordable.

Affordability issue is very subjective. If you start your house search by fixing a location and the new project you wish to buy, that is when the question of affordability comes in. This is worsened with all the new launching by developers and property fairs. Those events would actually further emphasize how nice the new project is and how expensive it is. 🙂

However if you start by setting a budget, then only start looking around to see where is the best location based on your affordability, you would be surprised that there are actually a lot of reasonably priced decent houses in secondary market. In fact some of them are in matured and nice location with good accessibility.

To bring the awareness level up, for Penangites, I would like to suggest that the state government or Rehda can organize some kind of affordable housing fair that focuses only on affordable housing projects together with a large collection of affordable houses from the secondary market. Of course, the property fair is not about having a long list of affordable houses from the secondary market. Instead, it should offer an AFFORDABLE LIVING SOLUTION – bringing awareness to the people of decent affordable homes in the secondary market, where you can easily find schools, markets with good accessibility. In Penang, that’s not too hard, really.

Ken Lim is the founder of Penang’s top property site for new and upcoming projects;
http://www.PenangPropertyTalk.com
  It is also where you get to comment and share your opinions on certain projects close to your heart. In his own words, “
I came with IT background, and started to invest in property since year 2005. I like to read, research and analyze the trends in Penang’s property development. I initially setup PenangPropertyTalk.com in 2010 as a general blog with the intention to share the news and projects that I have found through my research and learning.
Today, I’m very excited to see PenangPropertyTalk.com has grown to be one of the most popular and most engaged property blog in Penang (perhaps at Malaysia level?)
. The website has attracted ~40,000 visitors, >100,000 visits and >250,000 pageviews every month.

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Penang property market looks attractive. Reasons here.

Penang property market. Read on if you love Penang properties too.

I remembered that day I went for an interview with a Japanese multinational company in Penang way back in 1998. The only time I was in Penang before this career starting interview had always been for holidays. It never occurred to me that I would be working there one day. It was in July 1998 and jobs were few because Malaysia was still in a recovery after the ASEAN Financial crisis. To cut the story short, out of the 200 plus applications, 20 were called for interview at a 5-star hotel and 2 were hired. I was one of the two.

It was a great experience and I stayed in the Japanese MNC for 4 years. As for Penang, I stayed, worked and enjoyed my stay there for 15 years. Today, I am based in KL and has been here for the last 8 years. Every time I read any news about Penang, especially when it is about the property market (yes, I still have properties there) and the comments came from my good friend the Past President of FIABCI Malaysia, Michael Geh. Every time I have coffee with him, I learn new things. Wondering when is the next session.

Photo by wansan on
Pexels.com

Article in nst.com.my
.
  Raine & Horne International Zaki + Partners Sdn Bhd Senior partner Michael Geh is upbeat on Penang’s property market outlook, given the astounding transaction of 3,446 residential property units worth RM1.3 billion in the third quarter (Q3) of last year.

He also shared that this trend will continue as the property market sentiment in Penang is boosted by current low interest rates, good portfolio of affordable housing, Real Property Gains Tax (RPGT) exemption, as well as upcoming developments such as the Penang Transport Master Plan (PTMP).

He said, “We believe Q4 figures will be higher than Q3 because the market presents a good opportunity for first time homebuyers to invest, especially with the overnight policy rate (OPR) currently at its lowest level of 1.75 per cent.”
Article in nst.com.my

Three important points for property market Penang

The interest for residential property remains strong with 3,446 units transacted just within Q3 2020.  There are also many other supporting factors including low interest rates, RPGT exemptions and even the PTMP.  The expectation of a better Q4 in terms of property transaction showed resilience in demand for property in Penang. This is said to be boosted further by the very low interest rate currently. However, I think we should buy for own stay versus for investment instead. Then it will be way safer for our investment.

If you also have the same thoughts about Penang like Michael Geh, then perhaps it is time to call your friendly neighbourhood real estate negotiator and start viewing yeah. Take care and of yeah, remember to register for the
COVID-19 vaccinations yeah. Just need to use your MySejahtera app.

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Penang Property Market? Expert Series with Michael Geh.

It’s never easy to catch someone who’s also sought after by many newspapers, especially when it comes to views about property. Fortunately, after queuing for some time, I managed to get views from my friend, Michael Geh, Senior Partner of Raine & Horne Malaysia. I have asked him a few great to know questions and I think his concise and yet insightful answers will help many to be able to anticipate and plan for what’s ahead in 2015. Happy reading.

1. How did the overall Penang market performed in 2014?

In the Primary Market, all residential below RM600k are snapped up. However, for primary properties between RM600K to RM1.5 million it is sluggish. The Interest and optimism remain high but the bank loans are short in coming. Rejection rates are above 50%! Secondary properties faring better with higher volumes and less than 5% dip in value. This is also affected by the loan rejections. If only there are less rejections.

2. What were Malaysia’s significant policy changes, landmark developments and significant land transactions in 2014? How will these affect the market overall and Penang’s property market?

The main one was the increase in threshold to RM1 million for international investors. This will put off many of the potential investors into Malaysia. However, this may be good for Penang because some of them may go into a Quick-Gain strategy in Penang. However, this Quick-Gain strategy is not healthy for the local market because it pushes prices of properties up significantly. For example, land prices in prime areas has reached RM1200psf – RM1500psf. Someone even told me of a RM2000psf land transaction last week! This would soon be reported by NAPIC. These continuous high land costs, coupled with higher development charges and even the new introduction of infrastructure charge of RM10 – Rm15 psf would raise the overall development costs. Depending on projects, these additional costs would surely be passed on to the purchasers.

3. What is your outlook for 2015? Will the slowdown in the property market continue and how will the Goods and Services Tax affect the market?

The Penang property market Is mostly domestic driven. Domestic driven means it’s bought by those who are working and staying in Penang, not necessarily be just Penangites. Today, foreign buyers constitute less than 3% of the total purchases. Many purchasers are from the smaller towns within northern Malaysia. I think the interest for Penang’s residential market will remain strong for 2015. Affordability is however a huge issue as mentioned and thus, majority of the projects being launched these days are aiming at affordability instead. Thats why many of these new units would be mopped up easily. In fact, once GST kicks in, it may affect higher range properties, especially those which are RM700k or higher.

4. What and where should investors look at in 2015?

2015 will be a good year for home buyers. Many of the ‘investors’ looking for quick gains have already been pushed out. As for the medium to longer term, investors may want to look at the commercial properties and for residential perhaps newer areas such as Batu Kawan, Balik Pulau. These areas are not so popular today, thus opportunities are still present.

5. What’s in your wish list for 2015?

I hope the developers would focus on delivering and selling first homes, upgrade homes and ultimately homes to Malaysian families and youths. It should not be the current predominant mindset which is focussed on properties giving quick gains, flipping or speculations. This is not healthy and has reached epic proportions with the entry of buyers from China, Taiwan and Singapore. These investors are being invited to speculate on the Malaysian property market and as more of these are happening, the property prices would rise resulting in the unaffordable property prices in Malaysia today.

Michael Geh, Senior Partner, Raine & Horne Malaysia.

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Penang Property Outlook 2015

A few friends asked me what do I think about the property market in 2015. After I read an article by my friend Ken Lim of
penangpropertytalk.com
, I think it would be good for everyone to read his views too. His article is written specifically for the Penang property market. When it comes to any news about Penang latest properties planned, launched, to be launched or even maybe launching, I refer to his site. Thus, his views are backed by the actual new property listings in his site. In fact he can even tell you which are the properties with the highest interest level based on the number of clicks, views etc. Enjoy reading and learning.

Penang Property Outlook 2015 – Ken Lim,
PenangPropertyTalk.com

Property prices in Penang have been on the upward trend for the last seven years. However, the scale of growth in 2013 & 2014 has considerably slowed down as expected due to the cooling measures adopted by government and Bank Negara.

As we enter a brand new year in less than a week, growth is expected to progress at a slower rate in first half of the year against the backdrop of present cooling measures and the uncertainty in the property market. This does not mean that we are going to see a visible reduction in property value. Instead we shall see a better growth in second half of the year after all the cooling measures have been normalized and the doubts on GST issue are cleared.

Market Trends

The number of residential property transactions has been declining since 2011, mainly due to the slowdown of sales in the primary market. In 2013, the number of transactions in the primary market has dropped from its peak of 13,735 at 2011 down to an astonishingly low value of 2,750 in 2013, which is only 16% of total residential property transactions in Penang. The number has not improved in 2014.

The continuous decline of sales in the primary market is mainly due to the fact that the average selling price is approaching the psychological upper limit of RM600k. This is the price which is generally considered affordable for young married knowledge workers in Penang however the cooling measure adopted by Bank Negara Malaysia are making it harder for these young couples to get the necessary amount of loan.

The downtrend in sales will force developers to seek alternative effective approach in their pricing strategy. In order to secure a respectable degree of interest from the home buyers, developers are likely to adopt a more conservative pricing strategy. Instead of positioning their projects based on price per square feet, the strategy will focus on the final selling price of the property, which falls within the range of RM500 – RM800k depending on areas. As the housing price continues to appreciate, people are now more receptive to a smaller unit as long as the price is within their reach of affordability.

On the other hand, secondary market remains very active with only a slight decrease in transactions over the past few years. This indicates that overall consumer confidence is still strong as many are searching for good buys in the secondary market within their purchasing capability. In fact, 2015 is still very much considered a buyer’s market and it is good time to hunt for one.

Affordable Housing

Housing affordability has been a hot topic in recent years. The heat continues to escalate in 2014. While both government and private sectors have formulated various plans to deliver affordable housing, there seems to be a constraint in the marketing effort from the government in elevating the level of awareness to the people. Although there are more than fifty one thousand applicants applying for government housing projects, only around 5% of them applied for projects with respect to the offering of affordable units (RM200,000 – RM400,000). This is way below the 13,851 affordable units planned by the government.

Affordable housing is going to be the primary theme in the local housing industry in 2015. As of today, a lot of affordable housing projects have been planned by government and private sectors however very few have actually commenced operations. It is therefore expected to observe a higher level of marketing activities and a greater degree of execution in affordable housing projects in 2015.

Mainland Penang

The landed properties in Mainland have appreciated significantly in the past few years. Seberang Perai Tengah area has benefited the most due to its strategic location, being in the centre of the two Penang bridges. Most of the new landed projects are now fetching a price of more than RM500k. A majority of the new 3-storey semi-detached prices exceeds more than RM1 million now. The price is believed to escalate to the next level as more major property players such as EcoWorld are expected to launch their new projects in the mainland in 2015.

When affordable housing started to flourish, it may be a challenging time for the condominium sector in the mainland as they will be competing within the same pricing range category with the affordable units in the island.

Today, as the concept of lifestyle gains momentum, gated and guarded housing projects in the mainland continues to be an attractive option as some of them still fall within RM500k-600k pricing bracket. There are also more choices of well-planned township due to the availability of large land bank in the mainland.

What about Batu Kawan?

Batu Kawan is a growing brand in the making. There may be some development going on however it is going to take many more years for it to develop into a full fledge township. Not much excitement is expected in 2015 except for some growing interest in the affordable housing project as well as the first phase of Aspen Vision City, driven by Aspen Group. If everything develops according to the initial proposed plan, the construction of an integrated shopping mall anchored by IKEA is expected to starts by the end of 2015. We can also expect some updates on the mixed development project by EcoWorld and the premium outlet mall.

Statistics of 1.2 million visits in PenangPropertyTalk.com in the current year of 2014 have formed the basis of my analysis and thinking process regarding this subject. However it is my firm belief that the critical and unbiased assessment shared in this article drives towards a possible pattern as we usher the beginning of a brand new year.

– Ken Lim

(Founder and Principal Reviewer,
PenangPropertyTalk.com
)

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