The immediate outlook of Penang’s property market will be challenging amid difficulties in the global and national economic environment, said property services firm Knight Frank Malaysia in its latest report.

In its Real Estate Highlights report, the firm noted that the total volume of transactions for all sectors in Penang for 2015 registered a drop of 15.6% against 2014 while total value, likewise, fell by 15%.

Of this, residential transactions — which comprised 70.9% of transactions — saw volume fall by 16.9% and value fall by 18.5%.

The residential sector is expected to soften and consolidate further on increasing supply and poorer take-up rates, said the report.

Zooming in on the luxury high-rise segment, Knight Frank Malaysia noted that there were not many transactions for units with built-ups from 3,500 sq ft to 6,000 sq ft in the subsale market in 1H2016.

Of the units that were sold, units at The Cove in Tanjong Bungah fetched RM446 psf and RM626 psf, while other units in the area were sold for up to RM793 psf, said the firm.

Meanwhile, smaller subsale units at Gurney Paragon fetched RM808 psf to RM1,150 psf while at the Quayside in Seri Tanjong Pinang, subsale units were sold for RM768 psf to RM1,138 psf.

Meanwhile, asking rents dipped from 2015, with larger units in Tanjong Bungah typically asking for RM1.10 psf to RM2.30 psf, although some landlords are still seeking RM2.80 psf to RM2.95 psf.

At Gurney Drive, asking rents for units with larger built-ups range from RM1.80 psf to RM2.60 psf, while most smaller units have asking rents of RM2.20 psf to RM2.90 psf, although some landlords are asking for RM3.50 psf to RM4.40 psf.

On the other hand, the Penang office market has plateaued with occupancies generally stable, despite the fact that there is no new incoming supply.

According to the report, the existing supply of office space (buldings with 10 storeys and above) on Penang Island remains at 2H2015’s level of 5.59 million sq ft.

The occupancy rates for the four prime office buildings monitored in George Town remain at 2H2015’s level, ranging from 80% to 100%.

Meanwhile, current asking rents for older buildings also remain at 2H2015’s rates, from RM2.80 psf to RM3 psf. However, rent at Hunza Tower, which is fully occupied, is RM3.50 psf.

Going forward, Knight Frank notes that landlords of secondary buildings are expecting pressure from tenants to suppress rental rates.

In Penang’s retail subsector, prime shopping malls are seeing ground floor retail lots command RM13 psf to over RM35 psf, depending on the mall, location and unit size.

Occupancy rates for the prime shopping malls on the island range from 80% to 98.5% while secondary shopping malls generally range from 70% to 90%.

Knight Frank Malaysia reckoned that prime malls are still performing well, but they will not be completely immune from the effects of the weak economy.

Hence, occupancies and rental rates will also come under downward pressure, while secondary malls will face even greater challenges.

Source: TheEdgeProeprty.com.my

A proposed mixed development by Ideal Green Resources (Ideal Property Group?) at Bayan Lepas, Penang. It is strategically along Jalan Sultan Azlan Shah, adjacent to Ideal Vision Park.   This development comprises six parcels, featuring a mixed of commercial and residential properties including affordable housing:

• Parcel A: 7-storey shop offices
• Parcel B: 40-storey low cost housing (596 units)
• Parcel C: 26-storey condominium (200 units)
• Parcel D: 50-storey condominium (708 units)
• Parcel E: 50-storey affordable housing (1,342 units)
• Parcel F: 50-storey condominium (975 units) and 3-storey shop offices (66 units)

This project is still pending for approval. Details to be available upon project launch.

Property Project : (to be confirmed)
Location : Bayan Lepas, Penang
Property Type : Mixed development
Built-up Area: 850 sq.ft. (affordable unit)
Indicative Price: (to be confirmed)
Developer: Ideal Green Resources (Ideal Property?)

Location Map:

We have published reports on the most active projects in Penang. Do you wondering how many of those pageviews are from foreign countries?

Singapore is the third highest source of visitors to PenangPropertyTalk.com after Penang and Kuala Lumpur, with more than 24,000 visits in second quarter of 2016, representing approximately 6% of the total visits. The diagram below shows the projects with highest pageviews came from Singapore in the past 90 days.

Given the fact that foreign nationals and Malaysian working in Singapore are not eligible for affordable housings, those projects are excluded from the top 20 list.

* Projects are ranked based on the pageviews recorded in Google Analytic web traffic report for PenangPropertyTalk.com, filtered by visitors from Singapore.

A proposed mixed development by Eureka Prima Sdn. Bhd. at Teluk Bahang. Strategically located along Jalan Teluk Bahang, about 1km away from Hard Rock Hotel and Tropical Spice Garden.

The upcoming development will features a mix of serviced apartments, shoplots and hotel, to be developed in multiple phases.

Phase 1:
40-storey building – 228 units of serviced apartments and 12 units of shoplots.

Phase 2:
38-storey building – 121 units of serviced apartments and 18 units of shoplots.

Phase 3:
31-storey building – 20 units of shoptlots and a 259-room hotel with 8 units of chalets.

This project is still pending for approval. Details to be available upon project launch.

Property Project : (to be confirmed)
Location : Teluk Bahang, Penang
Property Type : Mixed development
Total Units: 349(suites), 259 rooms (hotel), 50 (shoplots)
Built-up Area: (to be confirmed)
Indicative Price: (to be confirmed)
Developer: Eureka Prima Sdn. Bhd.

Location Map:

Securing a mortgage to buy a house is not easy these days as financial institutions continue with their tight lending policies. But your chances of getting the loan approved may be higher if you buy a property through joint ownership.

Indeed we are seeing more people buying properties as joint owners. There are also many so called group property investors in the market, taking advantage of the buying powers of the group to own as many as 10 properties at any one time!

Chur Associates managing partner Chris Tan notes that buying homes through joint ownerships has become a trend in Malaysia. “Homebuyers are no longer hunting for properties alone like a tiger but rather in a pack, like lions,” he says.

“Escalating property prices in the past few years has made it more difficult than before for individual middle income earners to buy a property. We may soon see marriage proposals that pop this question ‘would you like to buy a house with me?’ (instead of the usual ‘will you marry me’),” he tells TheEdgeProperty.com.

He notes that purchasing a house through a joint ownership is the faster route to owning a property as it leverages on the incomes of the joint owners to get a higher margin of financing.

“And if they are young owners, that will allow for a longer tenure and a lower rate of monthly instalments,” he adds.

There are three main types of joint ownerships: couples (married and unmarried), family members, and friends or investment partners.

Tan says every joint ownership has its problems but the best form is through business entities of which unanimous consent is not required and solutions are purely commercially driven and there are no emotions involved in the decision-making process.

VKA Wealth Planners head of financial planning Lawrence Seow emphasises that even though joint ownerships will make house buying easier, one needs to plan ahead before committing themselves into a property purchase.

“If you are not careful and do not think things through, the financial burden will affect all parties of the joint ownership. Most of the time, joint ownerships become relevant if the owners are married couples or those who have strong relationship ties and trust such as parents and siblings,” he explains.

However, he notes that if the property is for investment, sometimes conflicts happen as individuals, parents, siblings and relatives have different financial needs and objectives.

“The parents may be looking for short term gains due to their retiring age, while the siblings may want a longer-term investment on capital appreciation to grow their wealth. All this pull and push factors make the investment decision a difficult one to make,” Seow adds.

As for taxes, the main advantage would be if there was rental yield, where the taxes can be shared equally among the various parties.

“For example, if the retiree does not earn any income, the burden of paying taxes will be lesser compared with one whose income falls under the maximum tax bracket,” he explains.

Both legal and financial consultants concur that the biggest problem with joint ownerships is there is no one proper exit strategy which could protect the rights of the owners.

“The exit strategy is important. Joint owners must agree on a solution in the event one owner is unable to fulfil an obligation. Basically, we must start with the end in mind to prevent unnecessary dispute in the future,” Tan explains.

When there is conflict, it would be difficult to set aside differences and try to remain objective. Thus, the decision-making may not be unanimous and done out of emotional stress.

For any form of joint ownership, Seow advises the owners to seek legal advice and to sign a formal agreement which contains the terms and conditions to protect their rights.

In establishing a joint-ownership relationship, he notes that understanding one’s financial needs and plans are important to establish a clear and definite goal, such as expected returns and debt-to-income exposure of the joint owners.

“Without a common objective, it is going to be difficult to weather through the tough times. Joint owners also need to create an exit mechanism in case they are faced with unexpected events such as death, illness, recession, retrenchment or even strained relationships,” he adds.

Source: TheEdgeProperty.com.my