The Changing Landscape Of Penang

Penang is on the verge of a property boom that will drive the state's growth into a vibrant regional hub for north Peninsular Malaysia.

Coupled with the entrance of major Klang Valley-based developers like SP Setia Bhd, E&O Property Development Bhd, Mah Sing Group Bhd, IJM Properties Sdn Bhd and Sunway City Bhd, it will further spur and change Penang's property landscape where the locals will enjoy better designs and concepts.

Although the state's economy is largely driven by the electronics and hospitality industries, the property sector is emerging as an important activity with many new projects underway or are on the drawing board.

The impending roll out of infrastructure projects under the Ninth Malaysia Plan (9MP) will be a boon to the real estate sector as new areas are open up for development.

The state has been allocated a RM6.6bil development budget for various projects, including the second Penang Bridge, Penang Outer Ring Road (PORR) and monorail project.

If the projects are conceived and implemented as a holistic infrastructure master plan to upgrade the state's road and transportation connectivity will be a big spin off to the state's economy.

The improved transportation network from various infrastructure projects would open up new frontiers of development that were formerly inaccessible, such as Batu Kawan and Balik Pulau.

Places near the site of the second Penang Bridge are also coming alive with renewed interest from developers. More developed areas in the southern part such as Sungai Ara and Bayan Lepas will continue to attract keen interest due to its proximity to the airport and free trade industrial zones.

The 9MP projects would benchmark Penang to be on par with some of the world's more modern cities.

A number of factors have contributed to Penang's “hot” property status - strong property demand and prices, high urbanisation rate and a household income that is above national average.

Of the population of 1.6 million people, nearly a third are between 25 to 44 years old - a good catchment market for property.

Penang's “nostalgic charm” had endeared it to the people, including foreigners and Penangites who resided outside the state.

Its island state appeal makes Penang a natural tourist attraction and it is no wonder that the state tops the list in attracting participants of Malaysia, My Second Home (MM2H) programme.

The exemption from real property gains tax and relaxation of Foreign Investment Committee guidelines for foreign buyers have promoted greater foreign buying interest for properties in the state.

Despite the many pluses, Penang is still a relatively untapped market with room for more innovative and better design projects as products offered have not caught up with changing market trends.

There are immense opportunities in both the residential and commercial property sectors with an acute need for better design products that will promote a better quality of life among the people.

Until a few years ago, most of the housing projects are the usual barrack-style houses or high-rise apartments with basic amenities.

Except for some new project launches, there is a lack of creative lifestyle products such as gated communities and resort-style developments.

In the commercial sector, there is also a need for better-planned office buildings, shopping complexes and food and beverage facilities.

Reflecting their growing affluence and changing lifestyle, Penang folks are now keen to upgrade to better planned and designed projects that offer them good security, amenities and environment.

Having the right address has become a measure of one's status and achievement in life and so good projects in the right location will do well for developers.

Penang Land Prices Not Likely To Dip

The Penang island's land prices are unlikely to drop, even if another economic slowdown happens.

For the past 10 years, Penang’s land value has been increasing.

It was a misconception to say that there was not much land left in the state.

With NCER, Penang can be a microelectronic hub of excellence, logistics hub in the northern region and has potential for an oil industry spin-off.

Penang’s strengths were its friendly locals, strong engineering workforce and vibrant nightlife.

However, the state’s weaknesses were its over dependence on the electronics and manufacturing sector, limited direct flight destinations, lack of top jobs for other sectors and slow pace in property development.

But the state’s declining population growth due to intra-state migration would hamper its development rate.

Penang Island Draws Luxury Home Builders

THE most expensive landed residential properties on the Penang island today are located in Tanjung Bungah, Tanjung Tokong and Batu Ferringhi in the North-East district, and Sungai Ara in the South-West district.

These properties are three-storey terraced, three-storey semi-detached and three-storey bungalows, which are priced between RM800,000 and RM3mil.

The builders are reputable developers from Kuala Lumpur and Penang.

Generally, the value of landed residential properties in these areas have appreciated by about 10% yearly since the dawn of the new millenium.

Due to high land cost and rising building material prices, it was no longer profitable for developers to build double-storey houses.

About two years ago, developers here started to build three-storey homes with larger built-up areas and higher selling prices.

Presently in the market, the selling price for a three-storey terraced starts from about RM800,000, while for a three-storey semi-detached house ranges from RM1.3mil to RM1.8mil, depending on the size.

The three-storey bungalow unit is priced between RM1.8mil and RM3mil.

In Tanjung Bungah, Chong Co Group, a reputable developer with good track record, is developing the Hill View Garden, comprising about 200 units of three-storey terraced and three-storey semi-detached houses on a 20-acre site.

These properties, priced between RM800,000 and RM1.8mil, are over 80% sold.

They are selling well because of their large built-up areas that can cater to the needs of families living with their grandparents.

The Hill View Garden three-storey homes have built-up areas ranging from 3,300 to 5,000 sq ft, depending on the type that come with four to five bedrooms, and porches large enough to accommodate three cars.

In Batu Ferringhi, similar types of three-storey landed residential properties were being developed.

Blossom Time Sdn Bhd is launching in mid-2008 some 129 units of three-storey landed residential properties comprising semi-detached and bungalow homes, which are part of a RM400mil development called Ferringhi Park.

Again, the emphasis is on the large built-up areas of the units, which come with five to seven rooms, depending on whether it is a semi-detached or a bungalow unit.

The semi-detached units are priced at RM1.2mil, and the bungalows at RM1.8mil.

The semi-detached units have built-up areas of 3,995sq ft, while the bungalows 4,300sq ft.

The first batch of 57 three-storey semi-detached and bungalow houses, launched last year, were over 80% sold.