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Buying Penang properties? Affordability means RM600 – RM700psf.

Posted in Penang Properties (Island)

A close friend asked me recently what’s the price that I would be willing to sell my condo in Tanjung Tokong. I said, RM700k. She laughed and said, my husband said that’s impossible. I laughed and said, it is ok. In fact at the price I wanted to sell, I was only only looking to sell it at RM610 – RM630 psf. Surely that is not something too high in Penang island. Furthermore, every condo in the neighbourhood are already above RM630 per sf despite giving just one car park. My unit comes with 2 car parks even if front and back. Nearby, E&O’s project was already selling at RM1,300 psf or higher. Just wanted to remind her that it is impossible for the whole Tanjung Tokong to rise in price but not my condo. The most recent offer came in at RM620K just two weeks ago which I told the buyer not to worry. Surely for RM620K he/she can get a decent unit, as long as he is ok with one car park and below 1,000sf. Then, today, I read the news from SP Setia in The Star.

Reported in The Star today (30 July 2014), SP Setia’s General Manager, Khoo Teck Chong said that over the next five years, SP Setia would be building more varieties of affordable housing that are able to cater to Penangite’ income level. This is because for the past few years, majority of all properties in Penang island has grown out of proportion in comparison to salary. Besides that, due to the stringent loan policies, it is getting tougher to sell high-end properties. He said that in the south-west district of the island, SP Setia would be developing properties prices from RM600 – RM700 psf range. The upcoming one would be Sky Vista at about RM600 psf. In SP Setia’s own survey, it was shown that properties priced between RM600 per sf and RM700 per sf are deemend to be affordable and thus are in demand by Penangites.

Personally, I rate South-West which is Balik Pulau as below Tanjung Tokong today. That’s why in terms of pricing, it should not be priced too high. RM600 per sf is a price which only more established developers like SP Setia would dare to price. However, if you ask me if I have just two choices today, where would I buy, it would be Balik Pulau and not Tanjung Tokong. Reason being, majority of all the working professionals would be on this side of the island instead of Tanjung Tokong. Of course, if you are a Penangite, then the choice is obvious. Penangites have their special preference for areas and always consider areas like Sungai Ara or even Relau as secondary instead of main areas. I guess it is ok. This is the reason why properties everywhere within the island has seen more than doubling of price within past few years.

written on 30th July 2014

Next suggested article: Tanjung Tokong vs Sungai Ara by a non-Penangite

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6 Comments

  1. Ang
    Ang

    Hi Chialih,

    Since your friend’s husband didn’t not agree with 700k for the price you asked, so, what is the expected price in mind from him to your property unit in tanjung tokong?
    Somemore your unit comes with 2 car parks and it is located at prime area.

    July 30, 2014
    |Reply
  2. racistmalaysian
    racistmalaysian

    But we all know affordability is not RM600~700psf. Affordability means RM300~400psf. Above RM400psf is actually out of reach for most Penangites unless combine salary husband and wife. But whatever. Let’s see how next few years panned out with more condos being VP’ed. If property price crash, we will start to see more affordable condos at RM300~400psf. If not, well, too bad. Penangites will have less money to spend. Penang economy will need to depend on foreigners.

    July 31, 2014
    |Reply
    • I think affordability is more on the actual price. RM600,000 and below, to me is still affordable, for a family of two working professionals. Stretched a bit, RM700,000 is still buyable. As for RM600 – RM700psf, this is only for certain sizes. Bigger sizes means lower price psf and smaller sizes like SOHO means RM700- RM800 psf. If prices ever crash, it will not be RM300- 400psf. There will be NO MARKET. Penang is not an economy based on tourism or education. It is the electronics hub of Malaysia. If all those working in Penang from out of Penang leaves for somewhere else, Penang will have many unsold units which will not even hit RM400psf. There are many engineers / professionals working in Penang who are not Penangites. These are the people buying the condos. The Penangites, many already have homes or staying with their parents. Or wants to stay close to their parents etc. Without these new people from out of Penang, there is no way Sungai Ara can grow. There is no way that condo market can experience the growth for the past few years. Objectively, how many Penangite who’s been staying in Penang their whole life would buy a condo and move there? Even if there’s a certain %, be reminded that majority if not all those who are non-Penangites and who can afford RM600,000 and below actually buys condo and not landed. just my opinion based on my 16 years in Penang. I am not a Penangite.

      July 31, 2014
      |Reply
      • racistmalaysian
        racistmalaysian

        I’m basing my psf on 1000sqft condo because this size is the most prevalent and just enough for a family of 3. So RM600k as you said is affordable only with combined salary of 2 professional. But how many engineers are there in Penang that are single and afford RM600k condo? How many are married without home and able to afford RM600k (if 2 people buy 1 condo, this means the market shrink by half)? This market is quite small compared to the empty condo we have now and the soon to be VP’ed condo in 2015 and 2016. Unless single people start to buy up SOHO 600sqft because actually price around RM300k only. Cheap cheap in actual price but expensive in terms of psf. But if SOHO take off in Penang, then I have nothing to say. Haha… poor Penangites. I think KL already happening where young people have to buy SOHO to stay. 🙁 However, mainland still got a lot of cheap huge house. Especially those bangla area.

        July 31, 2014
  3. Ang
    Ang

    As simple saying, actually, i doubt that 600k of property should not considered affordable, i think it is the benchmark from developer. They can say anything, most importantly, they can sell off their project.

    July 31, 2014
    |Reply
  4. Hi,

    What property are you selling at Tg Tokong? I may be interested.

    August 23, 2014
    |Reply

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