Connectivity & Accessibility

More than 30 years ago, before the Penang Bridge was built, it was a big thing for people from mainland to go to the island. Property investment in the Island vs mainland was hardly discussed because travelling to the other side of Penang taking ferry on a daily basis just doesn’t make much sense. One would just buy a house nearby where they work and where most of their relatives and friends are staying.

With the opening of Penang Bridge in 1985, it has substantially enhanced the connectivity and accessibility between the island and mainland. It has also been an important infrastructure to support the regional economic growth by improving access to the key employment region, airport and schools. The spur of economic development has eventually led to the rapid increase in property prices in Penang.

Today, most people think that with better connectivity between the island and mainland, properties in the mainland will be the sole gainer. Actually that’s not entirely correct. With the opening of 2nd bridge, the obvious winners are both Batu Kawan and Batu Maung. It is not about how many are going to move to Batu Kawan, neither it is about how often a person will buy furniture from IKEA. It is the economic multiplier effect that brings more value and development into those the two areas.

With better connectivity, people are more willing to stay further away from their workplace as long as they have easy accessibility to education, shopping and eateries. There is a common suggestion that one should buy a house near their workplace so that they can save time travelling to work. This is not always true as the subconscious element of selfish thoughts is involved in making the decision. Think about the time your family spent in the car while sending children to schools, tuition classes, music lessons, sports, going out for dinner, glossary shopping and etc. Do you still think that travelling to the office take up most of your time?

To get an idea of how much time is needed to travel from one place to the center of FTZ during peak hours, some samples based on Google traffic at 7:50am in the morning is captured:

Obviously, travelling to work from these locations would take you roughly between 20-40 minutes. What is more important is the accessibility to nearby amenities, which may cumulatively take more than 40 minutes of your family time in travelling.

Putting aside the travelling to work place, both island and mainland are equally well connected to amenities that serve our daily needs. However, I would have to agree that Penang Island generally has more high-performing schools and better health care centers. Until mainland is developed with more international education institutions, the availability of International schools and colleges are definitely a plus for Penang Island.

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 4) – Population

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

Tougher credit checks on potential buyers and lending curbs imposed by Bank Negara is distorting the market, claims a top official at Malaysia’s biggest grouping of property developers.

Real Estate and Housing Developers’ Association (Rehda) Malaysia reveals that due to the high rejection rates of housing loan applications, many developers have delayed their property launches, especially affordable houses.

As the supply of new affordable houses slows, the pressure is on prices to increase.

“These people are not speculators because for those interested to buy affordable homes, the Government had set specific criteria such as no sub-selling and a 10-year period before they can resell the units,” its president Datuk Seri Fateh Iskandar Mohamed Mansor said.

He urged Bank Negara to review its policy, especially the ones that affected lower income groups looking to purchase their first home.

Fateh Iskandar was speaking to reporters after launching Glomac Bhd’s RM710mil mixed housing project in Kulai, Johor.

Meanwhile, Austin Heights Sdn Bhd managing director Datuk Steve Chong also agrees that there is a distorted supply and demand in the high-rise sector in Iskandar Malaysia.

“Other properties are doing reasonably well, no doubt the temporary slowdown is due to the recently implemented goods and services tax, the financial slowdown and the cautious buying sentiment,” he said.

He said the temporary setback should not hold back property developers as buyers knew that anytime was a good time to buy properties.

“I say that the setback is temporary because in the long run, the housing market in Johor will still be on the uptrend,” he said.

Chong is positive that the situation will turn for the better once the connectivity between Johor and Singapore improved, especially with the development of the high-speed rail link and rapid transit system.

“More Singaporeans will then definitely come to Johor to buy properties and settle down here.

“Comparing the prices of property in Johor and Singapore, I think more would prefer to buy houses here and commute to the island for work,” he said.

He added that many senior managers and executives from Singapore were buying properties here.

Source: TheStar.com.my

G’ Mansion Garden Residence, high-rise development by MPSB Venture Sdn. Bhd. at Bukit Gambier, Penang. It is strategically located next to Gambier Heights Apartments, easily accessible via Jalan Bukit Gambier.

This development comprises a 34-storey condominium, featuring 282 residential units with 8-level multi-storey carpark. Each unit is expected to come with 2 car parking lots.

The project is still pending for approval. More details to be available upon official launch.

*Updated: Nov 2018*

Property Name: G’Mansion
Location : Bukit Gambier, Penang
Property Type : Residential
Built-up Area: 1,100 sq.ft. – 1,250 sq.ft.
Indicative Price : RM 620,000
Developer : MPSB Vensture Sdn. Bhd.

Location Map:

YTL Land and Development Bhd sold the final units of its low-rise condominium project – Penang Shorefront – at a preview last weekend.

YTL Land and Development executive director Datuk Yeoh Seok Kian remarked: “It’s amazing to witness the way the market responded to our Shorefront project, a niche upmarket, low rise and low density development right in the heart of George Town and neighbouring the historic Eastern and Oriental (E&O) Hotel.

“We strongly believe in innovation and invested heavily in our concept and design to complement Shorefront’s unrivalled location – a landmark seafront address within this unique heritage zone in Penang’s capital city,” he said in a recent press statement.

YTL Land and Development said the project is now fully sold before the launch, with the remaining 45 units being snapped up at the preview last weekend. The first two blocks of the same project, which offered 67 units, were previewed over a weekend in February and were fully sold then.

The three-acre freehold project comprises 115 units across three five-storey blocks. It sold from RM1,300 psf to RM2,100 psf while the maintenance fee is 65 sen psf, which includes a 10% sinking fund.

Shorefront units come with built-ups ranging from 1,400 sq ft to 3,400 sq ft and the project has a gross development value of RM310 million.

Slated for completion in 2017, it will be developed in a single phase.

“At RM2,100 psf, this is a new record price for the upmarket luxury lifestyle segment in Penang. This new benchmark reflects a strong demand for quality homes in a premium location, and is a very positive sign for the market, which had been slowing down under a subdued economic climate,” Yeoh added.

It is located in George Town city and adjacent to the E&O Hotel. Its nearby amenities include Penang’s local food havens, hotels, restaurants, entertainment outlets, schools, shops, bazaars and historical sites.

Source: TheEdgeProperty.com

Land scarcity or abundant, which one is better?

Scarcity of land is one of the most common explanations given by those looking to invest or having invested into a property in Penang Island. Many people seem to have convinced that since the island is running out of development land, prices of houses should increase at a much higher rate than any other places, including mainland.

Theoretically, the assumption is correct and that the land price increases are often sustainable too. But one should also be clear with their property investment objective. Are you looking to invest into an expensive property or a property with high investment value? Land scarcity will result into higher property price, but not necessary property with higher return on investment.

In reality, as the property is getting more expensive, a higher price resistance among the buyers would be seen. Especially when it goes beyond the psychological price limit of the majority, people will need more time to accept the higher limit. The chart below shows the average transacted price and average price movement, based on the combination of 3 most popular residential property types – Condominium, 2-3 storey terrace and 2-3 storey semi-detached houses.

The data from NAPIC clearly indicated that the residential property transaction in the mainland has shown a higher degree of positive price movement as compared to the properties in the island.

Under the influence of land scarcity, some people has opted with the “buy first, think later” strategy and believed that if they don’t buy a property in the island today, they might lose the opportunity later. Some went to the extent of buying property at western part of the island without having a clear objective in mind. Of course there is nothing wrong if that is planned for own stay. But for investment, bear in mind that all houses built are eventually meant for human habitation. The livability of the property and location should be the utmost priority.

One should focus on the investment objective and land scarcity ought to have the least influence here. If your objective is to own a property in Penang Island as a brand, and that you admire a busy urban lifestyles, north east district of the island is probably your best option. But if you don’t mind to spend additional 10-20 minutes traveling to your workplace, the abundance of land in mainland may be able to offer you a more relax lifestyle with myriad of outdoor activities that your whole family can enjoy in the future. Most importantly, it is likely to cost less than half the price that you will be paying in the island.

It is my firm belief that the increases in property price have very little thing to do with scarcity of land. Whether it is in the island or mainland, a general uptrend in land prices will inevitably results in more expensive houses. However, a sustainable property market price is when people are convinced and perceived that the premium they have paid is reasonable for a lifestyle the house will bring them.

OTHER TOPICS:
Penang Island vs Mainland (Part 1) – Location branding
Penang Island vs Mainland (Part 3) – Connectivity & Accessiblity
Penang Island vs Mainland (Part 4) – Population

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