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Penang Property Outlook 2017

January 4th, 2017 4 comments

It has been a quiet year for the Penang housing market in 2016. The cooling measures and tighter credit environment have continued to negatively influence the local market. While many are hoping to see a recovery soon, recent disappointing economic performance has further dampened market sentiment. Buyers are adopting a “wait-and-see” strategy as they remain uncertain of the economy’s future.

The delay in the issuance of advertising permit and developers license (APDL) has also contributed significantly to the decline of property transactions in Penang. Without the APDL, developers are not able to sell and promote their projects, nor can they finalize sales and purchase agreements.

penang-property-transactions-14-16

 

The chart above makes it clear that home sales have slowed down over the past three years and are expected to continue that trajectory in 2017. To get a sense of just how much sales have dropped in the past two years, consider the latest data from NAPIC, which indicates that the total housing transactions in first half of 2016 have dropped 13.5% and 25.8% compared to the same period in 2015 and 2014 respectively.

Prices rise despite slower market

Unfortunately, slowing transactions don’t mean that home ownership will become more affordable. PenangPropertyTalk.com experienced record website traffic in 2016 with over 1.79 million visits, beating 2015’s record of 1.61 million by approximately 10%.

There is actually a straightforward explanation for this: People’s obsession with home ownership is not fading, but they are adjusting their risk appetite and waiting for the right deal.

The figures below show the average transacted value for the three most common residential property types (condo, two-to-three storey terrace and semi-detached) in Penang. Undeniably, house prices have generally seen an upward trend, with the exception of condominium and terrace houses located in south-east district of Penang Island.

 

The landed house prices on the Mainland have shown steady growth over the past two years as upgraders are looking for bigger space for their growing family. The average transacted value for a semi-detached house in Penang Island also registered double-digit quarter-on-quarter growth in Q3 2016.

Deep-pocketed investors look at investing in landed houses as solid investments not only because it comes with a solid land, but also because it is less speculative as many make these their homes. Certainly, the scarcity of land will continue to drive up property prices, particularly for landed houses.

Opportunities during slow markets

The supply of affordable housing has influenced a fundamental shift in the Penang high-rise market, moving it out of rapid recovery and into a new normal where slow growth will stay for the long run. Thus, first home buyers can look forward to a more stable market with ample time to make the right decision. If none of the existing projects appeal to you, keep a lookout on the upcoming affordable houses located in Bayan Baru, Gelugor and Jelutong this year.

Concerns about further depreciation have also kept many people from buying houses during slow markets. However, by recognizing the opportunities that slow housing markets present, prospective buyers can break away from the pack and take advantage of good deals. If you scout around, you will find almost all the developers are now sweetening their deals with freebies, discounts, rebates and other innovative financial assistance schemes.

Penang Mainland – Full of possibilities

As land becomes more expensive on the island, developers are moving to build on the mainland where the abundance of land offers greater opportunities. Exclusivity and lifestyle will be the key development theme — a differentiation strategy which influences the expectation of a new living standard.

EcoWorld’s maiden project at Simpang Ampat, Eco Meadows, is a perfect example of how differentiation plays a vital role in influencing a buyer’s perception of value, setting it apart from the neighboring projects. Prices start from RM700k when it was first launched in late 2015, almost double the price of the surrounding houses and on par with the houses in a remote area of Penang Island. The project is nearly sold out now.

Infrastructure plan is too early to assess

The Penang Transport Master Plan (PTMP), the biggest infrastructural undertaking in Penang’s history, was one of the hottest topics discussed in 2016. It will be the greatest catalyst for the property market in the northern region, and it will help to create a more equitable housing situation for all by making remote township more accessible. Unfortunately, these plans are still too nebulous to have any material effect on the housing market in 2017.

Highlights in 2017

For first home buyers, keep a lookout on a few more affordable options coming up at Bayan Baru, Gelugor, Jelutong and Batu Ferringhi, including two projects by PR1MA.  Choose wisely within your means. A branded location does not necessary mean the right location for you.

Properties in a prime location with a price tag of around RM700k-RM800k are expected to enjoy good take up rates. If you have that budget, stay tuned for the upcoming condominium by IJM — 3 Residence and Waterside Residence, and the mixed development by Temasek — BPO Prime at Bayan Baru. Looking for high-end options? Check out the upcoming Marriott Residences at Gurney Drive, Penang Straits Residence at Seri Tanjung Pinang or wait for the new launch of landed properties by E&O property.

Gated and guarded communities on the Penang Mainland remain the ideal lifestyle choice at relatively affordable prices. Check out some of the existing projects before they get out of reach. The upcoming gated and guarded development by EcoWorld (Eco Horizon) and Aspen (Viluxe) at Batu Kawan will set a new price benchmark for properties in Mainland.

Still wondering would the property market recover in 2017 or 2018? Let’s put aside the word “recovery” and recognize the current market as a new normal. New growth will start from here.

– Ken Lim
(Founder, PenangPropertyTalk.com)

 

Categories: Featured Articles, News & Articles Tags:

Is affordable housing a good investment in Penang?

December 15th, 2016 25 comments

is-affordable-a-good-investmentAffordable housing has been the key growth driver for Penang residential property sector in the past two years. Today there are already 17 projects under construction while at least 26 more are in the pipeline.

Aiming to stimulate the sale of affordable housing, the developers are allowed to sell 30% of the affordable housing to the open market with 10-20% price premium. That in fact has stirred up the interest in buying a second home for investment among Penangites.

Is affordable housing a good investment Penang?” continues to be one of the most common yet frequent question addressed to us at Penang Property Talk. Prior to sharing food for thoughts, it is crucial for potential investors to fully digest the fundamental facts about affordable housing in Penang.

Purpose built housing

Affordable housing is purpose built for first time home buyer. It is conclusive to quote that most of the units are cautiously planned and well sized for individuals who are at establishment period in their career stage, young marriage couples who are settling in for a new home. For upgraders envisioning for a larger spacious home, affordable housing units will emerge to be inadequate for a matured growing family.

Be mindful that your potential buyers in the future are most likely to be a first time home buyer, who has a comparable budget of around RM300K – RM400K. Selling a first time buyer house at a much higher price tag in the future is definitely a gigantic challenge.

Abundant supply

Owning a brand new home in Penang Island used to be a dream, for some. The attractively priced affordable housing has now turned some of those dreams into reality. Many opportunistic buyers instantly draw a conclusion for a need to quickly grasp this golden advantage and compelled to buy an affordable unit as their second house for investment. Nevertheless, when realization starts to kick in on the fact that there will be abundant supply of affordable housing units in near future, the interest level on affordable housing projects cools down significantly.

affordable-housing-projects-pageviews

 

Indeed, an observation from Penang Property Talk is that despite the significant increase in affordable housing projects, the affordable housing project listing page has registered a consistent decline in page views over the past two years.

Impact of price control

From an investment perspective, it is a norm to typically refrain from whatsoever that has a price control in place. Of course, unless you are the one controlling the price. Obviously, there is no exception in affordable housing. The price of a house is likely to be influenced (indirectly controlled) by the affordable housing scheme that will be launching in the future.

Some individuals may have the perception that a higher selling price can be set for a unit after the 5 years cooling period. But there is no reason for someone to pay a much higher price for that unit when there is a continuous supply of affordable houses which are selling at a cheaper price. Not to mention the falling relative prices of the secondary unit as it ages.

In fact, the ceiling price for new affordable house has been lowered from RM400K to RM300K. In other words, there may be more affordable housing units in the pipeline with a cheaper price tag.

Lack of differentiation

Being able to sell a house promptly is as important as buying it cheap in the first place. In property investment, standing out from others is always an advantage when you are selling. House number, facing, floor level, layout, locations are some of the critical decision factor. Some design type may have advantage over other design types, depending on individual preference.

But in affordable housing, some of these selling points may not applicable because there may be thousands of unit of the same type in one project. You may also find the same unit and floor number in other blocks.

In a worse situation, affordable housing in secondary market may eventually become like “commodity” where pricing is the only decision factor. Property agents will simply need one classified listing per project to sell their stock since there is only one design type. In such cases, the seller will lost their bargaining power and the lowest price unit will likely to be sold first.

Food for thoughts

If you are a first time home buyer searching immensely for your dream home, affordable housing is absolutely one of the extremely beneficial options. However, do not rush to hurriedly jump to conclusions. Choose wisely within your means. A glamorous location does not necessary mean the right location for you.

* Click here for the full list of affordable housing in Penang *

For those who are buying affordable housing as an investment, comprehend and invest objectively. Affordable housing and a great financial investment are mutually exclusive. Unless you are fully equipped with a very good plan in buying affordable units, otherwise differentiation would be the key to a safe property investment in the current market situation. If you can afford, a larger yet spacious home or a development with unique offerings might be a better bet.

– Ken Lim
(Founder, PenangPropertyTalk.com)

Categories: Featured Articles, Property News Tags:

5 Most Popular Affordable Housing Projects in 2016

September 29th, 2016 No comments

Affordable housing is one of the hottest topics in Penang property market these days. As of today, Penang has more than 38 affordable housing projects proposed, 16 out of which are opened for application and registration. The chart below shows the 5 most popular affordable housing projects in Penang, based on the total number of project page views recorded in 2016 (01 Jan – 28 Sept 2016).

5-most-popular-affordable-housing

 

i-santorini-tn1. i-Santorini @ Tanjung Pinang (35,875 views)

Affordable housing development by Ideal Property Group in Tanjung Tokong, Penang. It is located behind Vantage Desiran Tanjung, just a short walk away from Tesco.

The development comprises three residential towers with 8-level multi-story carpark and 68 units of shop offices at the lower floors. There will be a total of 1,320 affordable units, with a standard built-up size of 850 sq.ft.

 

one-foresta-tn2. One Foresta (25,933 views)

The first i-Condo affordable housing by Ideal Property Group in Bayan Lepas, Penang. It is strategically located along Lengkok Kelicap, only a few minutes away from Penang Internation Airport, It is just a stone’s throw away from Setia Pearl Island housing scheme.

The residential component comprises 2 blocks of 40-storey towers with a total of 1343 affording housing units. Each unit will have a built-up area of 900 sq.ft. and comes with 3 bedrooms.

 

the-park-mak-mandin3. The Park @ Mak Mandin (25,768 views)

A new affordable housing scheme by Penang State Government at Jalan Mak Mandin, Butterworth. This project is undertaken by Silver Channel Sdn. Bhd., comprising 4 blocks of 14-storey towers with 780 apartment units.

Featuring spacious layout with a built-up area of 1,002 sq.ft., each unit comes with 3 bedrooms and 2 bathrooms. It also comes with various facilities such as swimming pool, children playground and more.

It is worth mentioning that the Chinese version of this project post has received an overwhelming response.

 

mutiara-jesselton-tn4. Mutiara Jesselton (18,958 views)

Affordable housing development by Berjaya Land at Batu Gantong, also known as the parcel 2 of Jesselton Villas. It is just a short drive away from Penang Turf Club and easily accessible via Jalan Scotland.

This development comprises a 32-storey residential tower and 16 units of shop offices, with an indicative price starting from RM150,000.

 

tri-pinnacle-tn5. TRI Pinnacle (17,900 views)

Affordable homes located at Jalan Persiaran Halia 3 at Mount Erskine. The first of its kind by Aspen Group that create a high quality affordable housing development and help to enhance the surrounding area to provide the residents with a well conceptualized, modern, airy environment to live, relax and work!

This is one of the first private-initiated affordable housing project in Penang. Standard unit price starts from RM299,000, with option to upgrade it with full IKEA furnishing.

 

The Tamarind vs Queens Residences

August 13th, 2016 43 comments

Queens Residences and The Tamarind, the two most popular Q2 2016 projects in Penang have their own unique popularity. Take a look at the comparison of these two projects…

The Tamarind Queens Residences
Developer E&O Property Ideal Property Group
Location Tanjung Tokong Bayan Bay
Standard unit size 1,042 onwards 950 sq.ft. – 1,650 sq.ft.
Price psf.* RM700 onward RM780 onward
No. of carpark 2 2
Selling Price* RM700,000 onward RM760,000 onward
Development land size 7 acres 11.74 acres
Land tenure Freehold Freehold
Total units 1,104 2,100
Expected completion 2019 2020
Highest floor 33 30
5 nearest schools
  • Tenby International School (4km)
  • Penang Chinese Girls High School (4km)
  • Phor Tay Primary & High School (3km)
  • TAR College (4.5km)
  • Han Ming Primary School
  • SJKC Shih Chung (3km)
  • Phor Tay High School (3km)
  • SJKC Kwang Hwa (3km)
  • SK Sungai Nibong (2.5km)
  • Straits International School (9.5km)
  • 5 nearest malls
  • Gurney Plaza (3.5km)
  • Island Plaza (1.5km)
  • Tesco Sungai Pinang (1km)
  • Gurney Paragon (3km)
  • Straits Quay (1.5km)
  • Queensbay Mall (0.2km)
  • Bukit Jambul Complex (3.5km)
  • Sunshine Square (4km)
  • Giant Hypermarket (5km)
  • Tesco Hypermarket (7km)
  • Web popularity (Past 90 days) 9,500 pageviews 10,500 pageviews
    Travelling to
    (off peak)

    • Penang Bridge
    • 2nd Bridge
    • Airport
    • Komtar
    • FTZ


  • 14km (20 minutes)
  • 22km (28 minutes)
  • 22km (30 minutes)
  • 7km (16 minutes)
  • 19km (26 minutes)


  • 4.5km (9 minutes)
  • 7km (9 minutes)
  • 8km (14 minutes)
  • 18km (22 minutes)
  • 5km (8 minutes)
  • Find out more about The Tamarind exclusive package! More about Queens Residences

    *Based on initial soft-launch price

    Categories: Featured Articles, Property News Tags:

    The Blooming of Batu Kawan

    June 30th, 2016 1 comment

    Batu Kawan, situated at southern part of Seberang Perai is the new branding in the making. A decade ago, it was not a place where people would want to visit. An empty land, it was. However, a makeover took place when the Government chose Batu Kawan as the mainland site for major industrial area and a location for the Penang Second Bridge. A land covered with oil palm plantations in the past, has now evolved into a very well planned township. From manufacturing sites to affordable housing, the most anticipated IKEA, Design Village (Premium Outlet which slated to be opened in November 2016), KDU University College and One Auto Hub are some of the upcoming notable development at Batu Kawan.

    Located only 20 minutes’ drive away from Bayan Lepas Free Trade Zone and close proximity to Penang Science Park. Batu Kawan is the only locality in Penang where most of the infrastructure, such as interchanges, roads, drainage and highways, have been completed ahead of any other developments.

    In terms of population, the construction of the Second Bridge in 2008 has indeed made Seberang Perai Selatan as one of the fastest growing district in Penang. Based on the data from the Department of Statistics (2014), the population increased by more than 27% since 2008. With the extensive population growth channeling into the southern part of Seberang Perai, the rapid demographic transformation will strongly stimulate economic effect and the nature of demand for housing in the coming decades.

    The strong influence on the demand for properties is proven by the notable take up rate on the very first condominium at Batu Kawan by Aspen Group – Vertu Resort Condominium and the lifestyle gated and guarded (G&G) development scheme – Eco Meadows by EcoWorld in Simpang Ampat.

    The next prominent property development to watch out in Batu Kawan is the Utropolis development by Paramount Property. Apart from developing the KDU University College, which is currently under construction, Paramount Property’s mixed development is slated to launch in stages by 3Q 2016.

    The Utropolis is strategically located adjacent to the upcoming KDU University College and a proposed linkage to the Design Village, also just a stone’s throw away to the most anticipated IKEA furniture store. This development by Paramount showcases two blocks of 18-storey residential towers and 196 units of commercial suites. The lifestyle commercial suites are slated to launch in 3Q 2016, followed by studio suites in fourth quarter of the year.

    Smaller commercial units, like the 500-1,500sq.ft. commercial suites offered in the upcoming Utropolis are a good starting point for first-time commercial property investors, potentially good returns and easy lets.

    Given its strategic location and easy accessibility via Penang Second Bridge, the Utropolis development scheme is expected to attract a respectable response and set a new benchmark for the housing development in the southern region of Penang mainland.

    With more and more exciting yet thrilling development in the pipeline along with many new ventures by major developers, Batu Kawan is positioned to be the next well-planned satellite township, comparable, if not bigger, than the mixed development and industrial area of Bayan Baru on the island. It is also becoming the next shopping paradise cum education hubs with the malls and educational institutions completing by 2019.

    – Ken Lim
    (Founder, PenangPropertyTalk.com)

    Register your interest in upcoming projects at Batu Kawan