Escalating housing prices and the changing needs of young buyers have spurred interest in shoebox-sized apartments on Penang island, said Henry Butcher Malaysia (Penang) Sdn Bhd director Jason Teoh.
"Currently, there is no supply of shoebox-sized apartments in the (Penang) market, but I observe that shoebox-sized apartments with facilities will have strong demand from young working adults who are looking for homes offering a modern lifestyle," he told TheEdgeProperty.com after sharing his outlook of the northern region of Peninsular Malaysia.
He noted that although land scarcity will be an issue for new developments in George Town, Penang, there are opportunities for developers to look into, such as redeveloping existing old buildings or old houses into shoebox apartments to cater for the needs of young homebuyers.
On the overall market view, Teoh said developers in Penang have always been confronted with various challenges in the overall supply chain, such as lack of suitable land for development. There are fewer new launches in recent times and pent-up demand seems to be broiling.
"Developers with projects in the right locations with the right concept and prices will attract buyers despite the weak market sentiment," he added.
A good example of a recent well-received residential project in the southwest district of Penang island has seen a remarkable take-up rate of 80% without any aggressive marketing campaign.
However, he noted that the outlook on Penang’s property market remains uncertain if economic and market sentiment continue to be weak, hence, transaction volume is expected to decline and there will be fewer speculative activities.
"In the long run, Penang’s property market will be supported by healthy fundamentals — such as the growing young population, shrinking average household sizes, low unemployment rate and sustainable local/foreign investment — which could help regain market confidence," he explained.
Teoh said Penang island is a small place, and being small has its advantages in terms of the density of economic agglomeration.
"Given that infrastructure development is now in the making, greater connectivity between places and people and, more importantly, between people and people would augur well for the future of Penang," he noted.
Teoh said the Penang Transport Master Plan, which includes construction of the monorail, bus rapid transit (BRT), highways and roads, undersea tunnel and sky cab, is now pending the consent of the authorities.
Once the plan is approved, it will be the greatest catalyst for the property market in the northern region.
He was speaking at the Malaysian Property Summit Mid-Year Review 2016. TheEdgeProperty.com and The Edge Malaysia are the media partners of this event. - The Edge Property