If you were to travel to Ipoh today, you would see many billboards, especially for new properties as soon as you enter Ipoh. Ipoh is considered a sleepy hollow when compared to the tiny Penang island or the vibrant Klang Valley which is going to hit 10 million population within just a few more years. If you think Ipoh properties are cheap, better think again. In fact, the prices has appreciated tremendously despite the fact that there is NO international airport and job opportunities especially the higher management are few if any. Actually, that was the reason I moved to Penang upon my graduation. Okay, what are some of the reasons why Ipoh property prices has increased?
Scarcity of land. I know, you are looking at me now, ‘do I know what am I talking about?’ Scarcity of land? Yes, I meant it seriously, there’s scarcity of land in all the areas which people love. For example, Ipoh Garden, Ipoh Garden South and even Ipoh Garden East which was once considered the cheaper part of Ipoh Garden. This scarcity of land is the same in Penang, in Klang Valley. That’s the reason why the prices are increasing. Demand is there but the supply has ended, mostly secondary or even small parcels of land. If you are a son, would you buy nearby or far away? Answer is clear. This is the same answer even if you are a son who is working out of Ipoh and wishes to buy a place for retirement in the near future. Even if your wife dares to tell you she does not want to stay with your parents but she would not object to stay close to them.
Expectation. Many, if not majority of all the younger generation of Ipoh are working elsewhere. An engineering graduate may find a good paying job in Ipoh. There are actually world class manufacturing companies in Ipoh. Finisar is a company which pays as well if not better than even the Penang electronics companies. However, if you are talking about vast opportunity, Ipoh does not have it. These people who work in Penang or Klang Valley is already used to the typical RM500 psf price on the medium end and thus, when they look at Ipoh and the fact that RM400,000 can even still get you a terrace house in Ipoh Garden, even if you may need to spend on renovation, they would buy! To them, RM400,000 is a steal and if the whole nation prices rises, Ipoh prices would also rise.
Choices. There are now gated and guarded schemes. There are now luxury condos. There are now super low density luxury condominiums. There are now projects which are exclusive bungalows, gated and guarded and lots of greeneries. Can you sell these projects cheaply?With better choices, comes higher prices. The developers are much more adventurous too as they know many in Ipoh has huge savings and if they can make three generations stay together, they would be willing to pay. Or the older generation may not want to tend to their garden but prefer a smaller condo instead. It’s also safer too.
There are many other reasons but I think these three reasons are suffice to tell you that even though things do not happen in a fast pace like Klang Valley or too many people want to stay in a tiny island called Penang, prices of properties in Ipoh will continue to go up. One thing is sure though, if you are willing to buy slightly further away, RM400,000 can still buy you a semi-detached, even today.
written on 20 June 2014
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