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Property prices on Penang more resilient, says expert

Property News/ 14 September 2011 Leave a comment

GEORGE TOWN: A leading property expert said he does not expect property prices in Penang to see a major correction if there is a global downturn because the prices have not escalated as much as in other markets.

Another reason is that demand far outstrips supply, said CB Richard Ellis (CBRE) managing director Allan Soo.

"In 2008 when the property prices in Hong Kong, Singapore and Kuala Lumpur took a stiff correction due to the global financial crisis, Penang was largely unaffected because the property market was relatively slow compared with the other cities.

"But in the past two years, although property prices have picked up sharply in Penang, there is insufficient supply. This is due to developers focusing on niche and high-end properties," he said during a seminar on InvestPenang organised by ECM Libra Financial Group Bhd.

Property prices in Penang have shot up in the past two years with numerous high-end condominium projects and integrated developments undertaken by big players such as Eastern & Oriental Bhd (E&O), IJM Corp Bhd and S P Setia Bhd.

Soo said prior to E&O's Seri Tanjung Pinang project, the developments in Penang were largely confined to parcels involving two or three acres and were not planned schemes.

The developers were also local players who did not pay much attention to infrastructure such as access roads and amenities like security.

Soo suggests that investors keen on acquiring properties in Penang for the longer term look at high rise integrated and comprehensive schemes that include amenities and infrastructure covering a few hundred acres of development.

He also said that as far as pricing is concerned, the levels seen in Penang are still relatively cheap.

"It is relatively cheaper to invest in Penang and Malaysia as even the most expensive condominium project here is relatively cheaper than a similar project in Hong Kong or Singapore," he said.

Another speaker at the seminar, Datuk Seri Dr Kelvin Kiew said the biggest weakness of the small and medium enterprises (SMEs) in Penang is that the owners are easily satisfied and do not look to grow their companies beyond the local borders.

"The owners prefer to pass on the company or wealth accumulated to their children. This is unlike in Taiwan where the founders of large SMEs install a professional management to see that the business grows.

"The children are not allowed anywhere near the company," he said.

Another setback for the SMEs is that they do not do enough to promote themselves.

Kiew said the SMEs in Penang should look towards positioning themselves globally because they have some good factors going for them such as operational excellence and are proven good manufacturers of equipment and precision tooling.



SOURCE: The Edge Property

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  1. proud penangkia
    September 14th, 2011 at 20:56 | #1

    Yes you are right expert. Totally agree with you.

  2. Common Sense
    September 15th, 2011 at 12:55 | #2

    Eventually Penang folks will no longer able to afford a home in the island. The rich will get richer. It will cause an economic imbalance in the long term, overall it will very bad for the people of Penang, sad but true.

  3. proud penangkia
    September 15th, 2011 at 13:34 | #3

    @Common Sense
    Penang folks will be richer and richer from the sub-sales profit. Only minority ppl will suffer, penang is full of MNC and local company, i do not think it is a problem for them to buy property RM700k – RM800k. After buy then sub-sales for RM1millions – RM1.5milions to foreigner who come here to work. It is a happy ending for all. Proud to be penangkia.

  4. Common Sense
    September 15th, 2011 at 22:44 | #4

    @proud penangkia
    Buy to invest is one thing but buying to stay is another story. Take Singapore for example if the gov don’t build HDB flats and control on properties most Singaporean will have to move out to Johor. Just like Singapore there are plenty of MNC and local companies yet so many Singaporean apply for HDB and on the rise. Because not everyone earn director salary and majority of the people who do all the donkey work are the middle and lower class earner. The rich people will have the entire bread and left the bread crumbles for the majority. Greed is a human nature.

  5. Sunflower11
    September 16th, 2011 at 17:02 | #5

    The movement of property prices in Penang is more in tandem with political scene rather than global economies. That is the reason why it did not suffer in yr 2008 compared to KL or other Asian countries as it was mostly by-passed by investors during the Koh Tsu Koon period. The property price was rather depressed for many years after the Asian financial crisis with exodus of Penangites to KL and Singapore.

    However, confidence resumed in Penang after taken over by DAP government and that’s why suddenly Penang is in the radar again.

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