It is not fair to compare property prices in Penang with those in Singapore and Hong Kong, says CA Lim & Co’s principal Lim Chien Aun.
“No doubt among the cheapest in the region, Penang, however, is not a financial centre like Singapore and Hong Kong, where there is substantial expatriate population to support high-end properties.
“Furthermore the foreign participation in the local property market is less than 8%,” Lim said, on the frequent comparison of property prices in Penang with Hong Kong and Singapore.
On the speculative nature of the Penang property market, Lim said as the return-on-investment (ROI) was not attractive in Penang, most investors buy properties for capital appreciation reasons and not for rental yields.
“In other words, the Penang property market is very speculative in nature,” he added.
In view of the high pricing of residential properties in Penang, the sub-sales market has now become important, said Raine & Horne Malaysia director Michael Geh.
He said more people were going after secondary property because of the pricing which ranged between RM72,000 and RM350,000.
Geh said strategically located affordable apartments with built-up areas of 700sq ft to over 800sq ft such as the Serina Bay in Sungai Pinang were now selling for RM350,000, compared to RM130,000 in 2005.
“Some apartment projects like the Symphony Park in Jelutong and Ocean View in Sungai Pinang have appreciated respectively to RM400,000 and RM380,000, compared to RM130,000 and RM150,000 when they were first sold in 2000 and 2001, due to their strategic locations,” he said.
The Ocean View units have built-up areas of 870sq ft, while the Symphony Park units are 730sq ft.
“On the island, the sub-sales properties are found largely in the south-west district and in Seberang Prai,” said Geh.
“The problem, however, is with the limited sub-sales supply, as there will be many who are also unwilling to sell at the sub-sales price.
“There are also no reasons for them to sell. If they were to give up their homes below the market price, how are they going to take up another home?”
Ideal Property Sdn Bhd chief executive officer Datuk Alex Ooi said the group planned to develop 2,000 units of affordable properties priced around RM200,000, RM300,000 and RM400,000 in Bayan Lepas next year.
“These will take three years to increase. We will plan more of such affordable homes in the near future on the island,” he said.
Penang Town and Country Planning and Housing committee chairman Jagdeep Singh Deo said the state government planned to deliver eight affordable projects comprising 20,000 housing units, three on the island and five in Seberang Prai.
“These properties will be priced between RM72,000 and RM400,000.
“On the island, the location for the projects are in Jalan S.P. Chelliah, Teluk Kumbar and Jelutong.
“In Seberang Prai, the sites for the projects are Kampung Jawa Butterworth, Ampang Jajar, off Jalan Be-rapit, Bukit Juru and Batu Kawan,” Jagdeep said.
In 2012, according to the National Property Information Centre (Napic), total transactions of residential properties in Penang fell by 23% to 23,266 from 30,674 in 2011, while the total value of transactions was down 7.5% to RM7bil from RM7.7bil in 2011. - By The Star