Overall, Penang is 1,048 km² in size. If it’s just the island part, it’s 293 km². In comparison, Singapore is 719.9 km² in size. It was 581 km2 in 1966. Singapore has thus, grown by 23 percent in size. Well, Penang is growing too and I personally hope Penang can continue to grow in size too. Currently, one way is through a reclamation project in Tanjung Tokong by Eastern & Oriental Berhad (E&O). It has fully completed the Seri Tanjung Pinang 1 and has started the Seri Tanjung Pinang 2 (STP2). The first phase under STP2 is nicknamed STP2A is 252.81 acres and it should be completed by middle of 2018. In terms of the whole reclamation however, it is far from complete. This is what E&O’s comment in an article in TheStar. “E&O said that the development period for STP2A is expected to be 15 years. The entire STP2 could potentially take 30-45 years to complete as STP2B and STP2C are nearly twice as large as STP2A,” it said.
In another related article in TheStar here, E&O was quoted as saying that the overall property market remain soft. It said that its current sales were contributed by locals. This meant that interest remains high for high end properties at the right price and the right location. It posted a lower profit of RM21.98mil during three months under review compared with RM31.07mil achieved a year earlier. Revenue jumped up by 36 percent to RM331.9mil. E&O’s next statement is important. It said, “For the remainder of current financial year ending March 31, 2018 (FY18) and for the next financial year we continue to focus selling down our inventory with more innovative pricing packages.” (This is similar to what was reported for Johor Bahru earlier . Developers are looking to clear their stocks instead of launching new ones so soon. Of course, there is a limit to how long they could hold back new launches but I think this is positive for the market. Hopefully that oversupply number does not rise even higher.) Full article for E&O in TheStar here.
A Penangite friend told me just 2 weeks ago when I was speaking in the PIP-EVE.com’s Talk Series this. “Penang market is very slow today, people are viewing but no one is buying!” My answer? If there are not enough transactions, nearly all the real estate negotiators would already be driving for GRAB. As of last count, I still have over 20 good friends who are RENs in Penang. If there are just no transactions, then developers whose biggest projects are in Penang would suffer and it ought to be shown in its results. The reason is because this slowdown in transaction numbers did not start in 2017 but has been around for a few years. Perhaps since 2014. Last but not least, if there are really no interest in property investment, then those properties in areas that everyone loves should already be on a downtrend. Sadly, this is not the case which is a reason why there are fewer transactions? On one side, owners could still ‘tahan’ from dropping prices too much (for good properties) and on the other side, sellers still could not accept that prices did not really move much. Surely if they wait a little longer, prices would drop. No right or wrong, just the potential reason why transactions has dropped, not just for Penang but for the whole of Malaysia too. Here’s one recent report from MIEA. Happy taking the right actions.
written on 14 Feb 2018
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