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Penang Island vs Mainland (Part 4) – Population

May 28th, 2015 Leave a comment

Population

Population growth comprises two basic components – the natural population growth (birth and death), and the non-natural population growth (relocation), which by contrast may occurs quickly and unexpectedly.

With natural population growth, developers can react accordingly to the market demands. They are able offset anticipatable demand by providing more supply. On the other hand, a non-natural population growth may be unpredictable. Underreacting to that unexpected demand will drive up house prices.

So what does this mean for the property market in Penang?

Penang overall population has been growing steadily at around 2 percent per year for the past two decades and will continue to do so as the state has been going through a notable transformation. The figure below shows the population distribution between island and mainland for the year of 1991 and 2012 (latest available data).

 

FIGURE 1: Penang population distribution 1991 vs 2012

 

Clearly, the share of population living in the island has shrunk moderately over the years. By 2012, only 45.8 percent of the population lived in the island, compared to 48.7 percent in 1991. This is mainly attributed to the relocation of people from island to the mainland for cheaper houses and employment opportunities.

While the 2.9 percent population shift may seem insignificant, the dramatic change in growth patterns between 2008 and 2012 should not be overlooked (Figure 2). Most notably, the 4.9 percent average annual growth in southern part of Seberang Perai was the highest annual growth recorded among all districts since 2000. The trend is likely to sustain as the rapid economic development in Batu Kawan continues bringing enormous opportunities into the region.

 

FIGURE 2: Average annual population growth rate

 

With the extensive population growth channeling into the southern part of Seberang Perai, the quick demographic change will strongly influence the nature of demand for housing in the coming decades.

Perhaps the most debated question at present – Will Mainland ever be at the same level as the Island in terms of branding and property value? I don’t think anyone has a definite answer to this question. Instead, one should ask in response, “Why is it necessary to be the same?”

OTHER TOPICS:
Penang Island vs Mainland (Part 1) – Location branding
Penang Island vs Mainland (Part 2) – Land scarcity or abundant?
Penang Island vs Mainland (Part 3) – Connectivity & accessibility

– Ken Lim
(Founder and Principal Reviewer, PenangPropertyTalk.com)

Categories: Featured Articles, Property News Tags:
  1. Ang
    May 28th, 2015 at 10:01 | #1

    I don’t think it will be the same, rather, there has its own strength by compensating to each others.

    Personally, it is implicated to perception and individual factor to determine the property purchase aside from branding or investment, i don’t think affordability is the main factor to move to mainland, instead, the main contribution would be lies in your neighborhood where your, parent, relatives and friends nearby which determine the most in deciding the location of property purchase. my 2 cents.

  2. CommonSense
    May 28th, 2015 at 13:26 | #2

    Hi Mr Ken / Admin team,

    Please advice on how the population is obtained?
    1. -where the data came from?
    2. -Is it based on the old census and extrapolate?
    3. -is it based on the voter list? (concern as many friends stay in penang for ages but go back to vote)
    4. -did they include the outstation who came here to rent especially in Bayan Lepas
    5. -did they include the expat in Batu Feringgi, MM2H?

    It will be funny to see how pack and jam we are on the island side, but the data showed otherwise.
    Anyway, some may argue Penang island is small land scarce area with only about 1/3 more popularly populated.

    • Ken (Admin)
      Ken (Admin)
      May 28th, 2015 at 13:30 | #3

      Hi @CommonSense,
      I’m not too sure exactly how the data is collected, but I’m quite sure:
      – The data does not come from voter list
      – Outstation people are included
      – MM2H is insignificant.

      Some of the reason why people perceived the traffic is worse in the island:
      – Penang Island land area is less than half of mainland
      – North east district has the highest population density, almost 3X the overall average Penang population density.
      – Penang Island is a key employment center
      – I guess more people travelling from mainland to the island on daily basis. :)

  3. cucukudang
    May 28th, 2015 at 14:06 | #4

    @CommonSense

    No bullshit, the population on mainland is more and will keep on increasing. Affordability and better amenities compared to 15 years ago are attracting people to stay there.

    I am living on island right now, but don’t mind moving over there if the price and standard of living are right for me. Surely, mainland will be second choice, but as I said, if the price is RIGHT and the STANDARD OF LIVING is good, I really don’t mind. Just like a Merc vs a Toyota. No one would buy a Toyota is it cost as much as a Merc, but given the lower price, Toyota is a popular choice.

  4. Dan
    May 28th, 2015 at 14:56 | #5

    I dun mind moving to mainland if the price is cheaper but the main problem is now I have my parent who is age 70years old + and my mum 60+, they are used to Island living and when I fetch them to Mainland, they feel not comfortable as they not able to adept to new environment. If I’m alone, I will move to mainland. So I have no choice but to stay back in Island for now. Maybe in future, I can retire in Mainland or elsewhere.

  5. CommonSense
    May 28th, 2015 at 15:20 | #6

    @Ken (Admin)
    Thanks. Appreciate it.
    Though i still doubtful about the rental people data in island……because many unreported.

  6. CommonSense
    May 28th, 2015 at 15:42 | #7

    @cucukudang

    Well, may be you are right.

    Can you explain more about ” if the price is RIGHT and the STANDARD OF LIVING is good”?
    what is right price $$? eg. Batu Kawan 3ST, Simpang Empat area (Eco Meadow)
    what sort of std living you refer to?

    it will be interesting to discuss in with numbers and data.

  7. cucukudang
    May 28th, 2015 at 17:54 | #8

    @CommonSense

    Price is right means Batu Kawan gated and guarded 3 storeys terrace for not more than 500k.

    While standard of living means the 3-storey terrace house must not be near high voltage cables (very typical in butterworth), not flood prone (very typical of BM), no container trucks passing by (another unique feature of butterworth), no gang murders (this one both butterworth and BM very famous for), no conversion of residential homes into temples.

  8. CommonSense
    May 29th, 2015 at 17:23 | #9

    @cucukudang

    I do agree to certain extent.
    But believed that, Developers wont sell at this price, even if this is the fair price.
    Be prepared to pay for future price. That’s why i said before it is not the growth issue, but are we paying the right price for mainland properties? Some even want to sell near island price

    on your comments on the conditions, i have to distance myself to prevent irritate my mainland friends.

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