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Penang Property Market – What’s happening?

Posted in Expert Series Q&A (Recommended), Penang Properties (Island), and Penang properties (mainland)

Do you know the actual happenings in Penang property market?  The actual numbers? You have read from a lot of sources. You may have attended a lot of those previews and may be thinking of going for those workshops which will set you on the right path to be a property multi-millionaire. Most importantly though is that we continue to read, continue to learn from all those who are involved directly in the real estate industry. Today, it is my honour to have someone to share with us based on actual numbers from the ground. Let’s learn from Ken Lim from PenangPropertyTalk.com

Q1. Statistically speaking, property transactions in Penang has been on a downtrend. Based on all the new properties being announced in penangpropertytalk.com, do you see the numbers also on a downtrend? Why?

Ken:  For new properties announced in PenangPropertyTalk.com, I could see a significant downtrend in 2012. Only 88 projects were introduced  compared to 137 projects in 2011. This represented a drop of nearly 40%. The downtrend continued in 2013 with only 80 projects announced. However, for 2014, I think it is on an uptrend again. Within first 8 months, I have already published 76 projects and there are 4 more months to go till end of 2014. 

Secondly, developer are also shifting their focus to mainland . Please review the table below:

Year Projects Island Mainland
2011 137 66% 34%
2012 88 64% 36%
2013 80 56% 44%
2014 (as of August) 76 42% 58%

Of course, please be reminded that the potential uptrend in project announcement may not necessary translate into more transactions. I personally think that the demand (either for own stay or investment) for properties in Penang has not changed a lot while the property curbing measures by BNM and stricter loan approvals has contributed to the downtrend in transactions.

 

Q2. Between a new property launch in island versus one in mainland, which normally gets more attention. Why do you think that is the case?

Obviously, property launches in the Island gets more attention. There’s always a significant spike in the website traffic whenever I publish a new project in the island, particularly for projects in Tanjong Tokong, Bayan Baru, Relau and Sungai Ara area (most popular are those selling below RM600k). The demand for these areas mainly come from the buyers in the electrical and electronics industry. There are people buying for own stay, backup (for various reasons), and also for investment. More than half of the people I know has more than one property in Penang.

However, the gated and guarded housing schemes (especially those with facilities and easy access to Penang bridge) in the mainland are gaining traction since last year. Many are buying for upgrades and some are from Island. 

Today, a 2-storey terrace house in mainland is selling at around 600k and achieves more than 80% take-up rate within a few months after launch. I was also told that a gated & guarded 3-storey semi-detached nearby Jalan Song Ban Kheng in Bukit Mertajam was recently transacted near to 1.2 Million in the secondary market. 

 

Q3. Most of the time, what is the type of property which gains the most attention; number of views or comments etc.

In Penang Island, a condominium in a desirable locations which is selling around 600k or less will gain the most attention. The desirable locations includes Tanjong Tokong, Bayan Baru, Sungai Ara & Relau.  For the mainland, there are a lot focus on gated and guarded housing scheme. Properties with prices below 600K seems to be a sweet spot. This is especially when coupled with easy access to the Penang bridge, such as Jalan Song Ban Kheng, Jalan Baru and Seberang Jaya. 

 

Q4. Personally, do you agree that properties in Penang are getting more unaffordable or do you still see lots of values both in new launches and secondary properties?

To be more accurate, I would agree that newly launched properties in a desirable location are getting more unaffordable.

Affordability issue is very subjective. If you start your house search by fixing a location and the new project you wish to buy, that is when the question of affordability comes in. This is worsened with all the new launching by developers and property fairs. Those events would actually further emphasize how nice the new project is and how expensive it is. 🙂

However if you start by setting a budget, then only start looking around to see where is the best location based on your affordability, you would be surprised that there are actually a lot of reasonably priced decent houses in secondary market. In fact some of them are in matured and nice location with good accessibility.

To bring the awareness level up, for Penangites, I would like to suggest that the state government or Rehda can organize some kind of affordable housing fair that focuses only on affordable housing projects together with a large collection of affordable houses from the secondary market. Of course, the property fair is not about having a long list of affordable houses from the secondary market. Instead, it should offer an AFFORDABLE LIVING SOLUTION – bringing awareness to the people of decent affordable homes in the secondary market, where you can easily find schools, markets with good accessibility. In Penang, that’s not too hard, really. 

 

Ken Lim is the founder of Penang’s top property site for new and upcoming projects; www.PenangPropertyTalk.com  It is also where you get to comment and share your opinions on certain projects close to your heart. In his own words, “I came with IT background, and started to invest in property since year 2005. I like to read, research and analyze the trends in Penang’s property development. I initially setup PenangPropertyTalk.com in 2010 as a general blog with the intention to share the news and projects that I have found through my research and learning. Today, I’m very excited to see PenangPropertyTalk.com has grown to be one of the most popular and most engaged property blog in Penang (perhaps at Malaysia level?). The website has attracted ~40,000 visitors, >100,000 visits and >250,000 pageviews every month.

 

Next suggested article: Every major property market dropped, Penang stayed steady?

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