Positive catalyst in Q2 for Penang

Let’s discuss everything Penang today. I read a piece of good news for Penang property market today. RHB Research Institute Sdn Bhd’s executive director and head of research, Lim Chee Sing said that Penang property market would be supported by two new catalysts. They are the Penang second bridge opening as well as the Seri Tanjung Pinang property development by E&O Property Development Bhd. This is despite the current bearish sentiment which have cooled due to the multiple recent cooling measure announcements by the government. Second piece of good news even if some may not consider it to be would be from HwangDBS Vickers Research Sdn Bhd’s analyst Yee Mei Hui. She expects the price growth to soften to just 3% while transactions may fall within 5-10% for 2014.

A friend said that there were a few factories which may see some retrenchment soon. Another said that her factory has already experienced VSS few months ago and another round may be coming. Amidst all these, my brother told me that his company’s share option is becoming very profitable due to the ever increasing share price in the US. Another high tech factory whom I love very much had also just announced that they may be buying another company of a similar size. What does all these tell you? Well, situation continue to be normal. Ups and downs are happening at the same time.

In terms of property transactions, a close friend told me that she bought a condo in Penang just last week. Another signing SnP tomorrow. One more shared a joke. She just got to know that banks may lend up to 75% of her net pay. She thought it was only 30%. A prominent property guru showed a picture of huge crowd in his talks about property in KL. These people and event showed that buyers are still buying when they have the means to do so or if they really need a place to stay. Share market is still uncertain and so is the Ringgit which is expected to only strengthen towards end of the year and not currently. Again, situation is still pretty normal. Ups and down.

A reminder. When everything and everyone tells you that the market is too good to be true, chances are, it may be due for a crash. However if everyone tells you everything negative, it may be time to buy. When the market continues to have generally positive predictions and things are still happening quite normally, I think good deals can still be found. It depends only on what would be your goal. My personal goal? I am only looking at secondary properties for rental at this point in time.

written on 18th Feb 2014

Next suggested article: Penang property for rental, two better than one

5 thoughts on “Positive catalyst in Q2 for Penang

  1. Hi Chialih,

    The question is, our property is getting unaffordable, we wonder that is there really a demand to sustain the property growth or transaction? morever, our job opportunity in Penang is not as aggressive as KL,SIngapore and Hong kong, as our gap between income and property price is widen , it will be a big challenge to commit a property, in order to pay the installment of RM2200 for 500k property , the total family income has to be at least RM10000 approximately which is less than 30% of total income. we wonder how many of people is under this category to afford this?

    • Hi Ang, In terms of demand, yes there are. This is because our demographics showed us to be full of young people. Job opportunity in Penang definitely cannot beat KL but Penang is the manufacturing centre for Malaysia. This is Penang’s advantage besides being the medical tourism hub and UNESCO Heritage site. However, whether supply has been increasing in price too much, probably. As for challenge to own property, if you do a comparison, you would know that even though Singaporeans earn S$ but their ability to own a property is even lesser because their choices are not many. HDB flats are the cheapest properties they have but S$350,000 would only get you a small unit. This is also the same case in HK. Even in Australia too. Thus, property price increase is not just in Malaysia. In fact Malaysia owas only ranked top 12 in the world for 2013. I wrote about this too in an earlier article.

  2. Hi Chialih,

    Thanks for your comment. as comment, it is quite challenging and hardly to sustain if our strategy remain because of the increase of labor cost. eventually, FDI may consider neighbor country if cheaper operational cost is explored.

    The potential strength can count on is tourism to revive on the economic. so, what make Penang so special and FD would better invest here than others place?

    • Hi Ang, very true, FDI may consider neighbouring country. In fact for low cost manufacturing, Malaysia will never win. However, do check online for the salary range for managerial positions in Thailand and Indonesia vs Malaysia and you will get an idea why many MNCs are still ok with Malaysia. In fact we are still competitive. The most important thing for Penang is however to have a long term vision and go towards it. Long ago, the vision was the Free Trade Zone, then the Penang Bridge and then UNESCO Heritage. Now…. what’s next?

  3. Hi Chialih,

    Thanks for your comment and optimistic about Penang, as can see, things are changing and heading good. Penang, keep it up!

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