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Penang residential market to remain active though less buzz compared to last year

April 11th, 2013 Leave a comment

Hot spots include Batu Maung, Bayan Lepas, George Town, Tanjung Bungah, Teluk Bahang, as well as areas around five new proposed highways.

“Despite uncertainties in both external  global economy and internal political risks that have caused some investors to slow down in the short term, market analysts believe that the cautiously optimistic trend will continue in 2013 with a stable and positive outlook (in medium to long term) for Penang’s property market, sustained by healthy core demand, manageable mortgage rates, and positive economic growth,” says Henry Butcher Malaysia (Penang) director Jason Teoh, interviewed in conjuction with the upcomingMalaysian Secondary Property Exhibition (Maspex) 2013.

“An active residential sub-sector will continue to spearhead the market, though it might experience less buzz compared to the previous year.”

“On the island, the hot spot or corridor of opportunities would be in Batu Maung, Bayan Lepas, George Town, Tanjung Bungah and Teluk Bahang areas.  On the mainland, the investors would be able to get residential properties that are relatively cheap with low density at strategic locations.  A new enabler – the second Penang Bridge, will appear in the landscape of Penang soon in the third quarter of this year.  The opportunities may arise not only on the island but on the mainland as well.  Investors perhaps could look into and analyse the future potential opportunities of the land banks around the intersection of the North-South Highway and the second Penang Bridge,” Teoh advised.

He continued, “Areas around the five new proposed highways under the “Recommended Penang Transport Master Plan Strategy, 2013”, namely, George Town Outer Bypass, The North Coast Pair Road, The Air Itam – Relau Pair Road, The North-South Expressway Link Road, Third Sea Crossing, could be the potential hot locations for the property market in the near future.”

Penang has been one of the most dynamic real estate markets in Malaysia, as most property watchers are aware of.  “The volume and value of property transactions grew at a cumulative average growth rate of 8.4% and 13.2% respectively, from 1999-2011.  These were even higher from 2009-2011, reaching 20.1% and 26.0% respectively.”

Chart 1: Penang – House Price Index by Type, 1999 – 2012 Q3 (P). Source: Ministry of Finance, Malaysia / Henry Butcher Research

Of all property types, terraced houses have increased in price the most over the last few years. Its price index from 1999 to Q3 2012 (P) can be seen in the graph above to have hiked higher than other type of properties.

Another type of property that is in hot demand, with potential capital appreciation, is pre-war heritage shophouses.  The price index of pre-war properties in George Town started to soar after 1999 (chart below).

Chart 2: Penang – Price Index of Pre-war Heritage Property, 1980 – 2012. Source: HB Research

Teoh believes that the demand for properties in both the new and secondary market will continue to grow and appeal to a wider segment of local and international buyers.

He added, “Furthermore, slightly more than one-third of the total 1.61 million population in Penang are from the age of 25 to 44, indicating that we are still in need of a fairly large number of houses or residential properties each year. Nevertheless, the developers have to be more versatile and build according to the changing trends and needs of the market.”

Henry Butcher Malaysia (Penang) has been providing real estate solutions to government, commerce and industry in Malaysia for more than 20 years, says Teoh. It calls itself a “one-stop” provider, offering a comprehensive range of services.

Maspex 2013 will be held over the weekend of April 12 to 14, at the concourse of Tropicana City Mall, PJ. Organised by the Malaysian Institute of Estate Agents (MIEA), it will feature booths by 32 real estate agencies with photos and presentations of previously owned properties for sale.

Other participating agencies include Reapfield Shah Alam which talks to StarProperty.my about Shah Alam hot spots, as well as Property Hub Sdn Bhd which talks to us about how many buyers are anticipating a price correction.

Source: StarProperty.my

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  1. ST Khor
    April 12th, 2013 at 11:18 | #1

    Even those Apeks & Amahs in coffee-shop or market can give you a good lecture on Penang property prices without all this fanciful charts or graphs!

  2. CY Fong
    April 13th, 2013 at 09:20 | #2

    What is “cautiously optimistic” trend? If the you losing money buying property, I would say “See? I said must be cautious to remain optimistic”, if you make money, I can claim credits “I already told you it’s good market, though nothing wrong to be cautious”.
    In fact, it is equally true that if I tell you “the market will go up until it goes down”
    The making of so-called authority/specialist sometime, sometimes is most of the time, is not whether you have what it takes (obviously if you smart enough to choose the right words would be easier), or whether you truly want to help the investors.
    It is not that I have evil intention, if I forgot to disclose that I have other interest such as I am brokerage agent, you don’t get excited making transaction actively, I don’t make more money. After all, my professional analysis still “correct” you can’t blame me, I am making money when you buy/sell not when you are making money.

  3. CY Fong
    April 13th, 2013 at 09:24 | #3

    What is “cautiously optimistic” trend? If the you losing money buying property, I would say “See? I said must be cautious to remain optimistic”, if you make money, I can claim credits “I already told you it’s good market, though nothing wrong to be cautious”.
    In fact, it is equally true that if I tell you “the market will go up until it goes down”
    The making of so-called authority/specialist sometime, sometimes is most of the time, is not whether you have what it takes (obviously if you smart enough to choose the right words would be easier), or whether you truly want to help the investors.
    It is not that I have evil intention, if I forgot to disclose that I have other interest such as I ëam brokerage agent, you don’t get excited making transaction actively, I don’t make more money. After all, my professional analysis still “correct” you can’t blame me, I am making money when you buy/sell not when you are making money.

  4. Wilson Tang
    April 13th, 2013 at 10:51 | #4

    @CY Fong
    Looking for a tenant for my Setia Greens triple storey terrace… 2750 sq ft… 5 bedrooms….. 4 washrooms… lights, fans and grilles….. guarded community…. 10 mins to FTZ and Queensbay Mall…. RM1700 pm….Contact: 017-511 3735

  5. PBBinvest
    April 13th, 2013 at 11:58 | #5

    @Wilson Tang

    You can consider to rent it to factory as hostel to get better rent.

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