THE secondary property market in Penang for 2H2013 is expected to be more active now that the general election is over. Most investors took a wait-and-see approach before the election and there was a high loan rejection rate in 1Q2013, which resulted in a slower secondary market, says Raine & Horne International Zaki + Partners director Michael Geh.
He was presenting The Edge / Raine & Horne International Zaki + Partners Penang Housing Property Monitor for 1Q2013.
Nevertheless, the secondary property market saw some upward movement in terms of prices. Property price growth was seen in almost all the locations sampled.
One of the most significant increases was seen in Tanjung Bungah, where a 2-storey bungalow was sold for RM3 million in 1Q2013 compared with RM2.2 million for a similar property in 4Q2012, a 36% jump.
A 2-storey semi-detached house in Island Park was transacted at RM1.68 million in 1Q2013, or 29% higher compared with RM1.3 million for a similar transaction in the previous quarter. On average, standard 3-bedroom apartments in Batu Ferringhi saw a price hike of almost 20% in 1Q2013 to RM335,000 from RM280,000 in 4Q2012.
Says Geh, "The price increase perhaps is due to sellers asking for higher prices. Tanjung Bungah, for example, is a prime location. It is about 15 minutes away from George Town city centre and near to Tanjung Tokong, with easy access to facilities and amenities."
Meanwhile, "Island Park is an established residential neighbourhood located in the middle of Penang Island, with easy access to the city centre, Penang Bridge and the Tun Dr Lim Chong Eu Expressway, while Batu Ferringhi is about 25 minutes away from the city centre and 15 minutes from Tanjung Tokong. It has a lovely atmosphere with a lot of greenery and fresh air."
In Seberang Perai, however, the price of 1-storey terraced houses dropped 12% from RM170,000 in 4Q2012 to RM150,000 in 1Q2013.
The rental market in 1Q2013 also saw some increase. In Jelutong, a 1-storey terraced house saw a 29% rent in hike, from RM900 a month compared with RM700 previously.
At Seberang Perai Selatan, the rent for a standard 2-storey terraced houses rose 5% to RM400 from RM380 in 4Q2012.
Over in Tanjung Tokong, however, the rent for 2-storey bungalows dipped 11% from RM2,800 a month in 4Q2012 to RM2,500 in 1Q2013. Geh says this was largely due to a high number of incoming condominium units in the area.
According to Geh, a hot spot to look out for is the southwest district of Penang island as there are many new-planned as well as on-going developments there.
Projects launched in January include the Gardens Ville condominium in Sungai Ara by GSD Land (M) Sdn Bhd, Arte S serviced residence in Bukit Gambir by Nusmetro City Sdn Bhd and Orchard Ville condo in Sungai Ara by Reka Indah. February saw the launch of Platinum III condominium in Teluk Kumbar by TPPT Sdn Bhd.
Garden Ville comprises two blocks with a total of 476 units. Units with built-ups of 1,300 sq ft are priced from RM600,000 while units with 1,100 sq ft in built-up are priced from RM517,000. To date, more than than 70% of the units have been sold.
Arte S offers a total of 401 units in two blocks of serviced residences with built-ups of 1,280 sq ft and 1,313 sq ft, priced at RM650 psf.
Meanwhile, Reka Indah's Orchard Ville comprises two blocks of condominiums with built-ups of between 1,190 and 1,500 sq ft. Prices start at RM596,000.
TPPT Sdn Bhd's Platinum III consists of three blocks of condominiums, offering 357 units. One block has been sold out while the second block is 70% sold. The units have built-ups of 1,230 sq ft and 1,320 sq ft and are priced from RM460,000.
Among the more significant announcement recently was the signing of an agreement by 1Malaysia Development Bhd (1MDB) to purchase land to build 2,222 low-medium cost houses and 1,111 affordable houses in Air Putih, Air Itam and Paya Terubong, complete with various recreational facilities.
Apart from that, previously planned infrastructure projects worth a total of RM6.3 billion are expected to kick off, according to RHB Research Institute Sdn Bhd's report on real estate on May 20.
"The integrated road project, which is part of the Transport Master Plan, includes a 4.2km bypass from Gurney Drive and Lebuhraya Tun Dr Lim Chong Eu and Bandar Air Itam, a 12km paired road from Jalan Tanjung Bungah to Teluk Bahang and the 6.5km Penang-Butterworth sea tunnel. Of the four road projects, only the tunnel will be tolled," the report says.
Geh says the integrated road projects are expected to have a generally positive impact on properties situated along and close to the projects.
"It will take some time for them all to be completed but it will have a positive impact on properties in Penang in general. Improving infrastructure will further drive the market and rental value upwards," he says.
This story first appeared in The Edge weekly edition of Jun10-16, 2013.