An increase in transactions has been seen in both the primary and secondary residential property markets in Penang this year
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Total transactions of residential properties in Penang are expected to reach 12,936 units, valued at RM5.5 billion, this year — the highest since 2016, Raine & Horne International Zaki + Partners Sdn Bhd senior partner Michael Geh says in presenting the 3Q2019 Penang Housing Property Monitor.
That is 405 transactions or 3.23% more than last year’s total transactions of 12,551 units valued at RM5.47 billion, he adds.
“Increases are noted in both the primary and secondary residential property markets. A total of 984 transactions valued at RM480 million are expected in the primary market, while 11,952 transactions valued at RM5.02 billion are expected in the secondary market for 2019,” he tells City & Country.
“The estimated increase is due to the many positive policies introduced by the Ministry of Housing and Local Government and the Ministry of Finance, such as the Home Ownership Campaign. Moving forward, the lowering of threshold prices for foreign purchasers will continue to spur the residential property market.”
Last year, 882 transactions valued at RM440 million were recorded in the primary market while 11,669 transactions valued at RM5.03 billion were seen in the secondary market.
Geh says the state had 3,929 overhang residential properties as at the second quarter of the year, with 2,621 units being condominiums and apartments.
This was followed by 364 two to threestorey semi-detached houses, 240 flats, 227 detached houses, 200 two to three-storey terraced houses, 152 low-cost flats, 92 townhouses and 33 one-storey semidees.
Most of the overhang units were located on the island, with 40% in the northeast district and 36% in the southwest district. On the mainland, 16% were in central Seberang Perai, 4% in north Seberang Perai and 4% in south Seberang Perai.
Overhang units are completed properties that remain unsold nine months after their launch as well as after the issuance of the certificate of fitness.
Geh says, “Some overhang properties are located in less saleable areas, so it is not surprising that they cannot be sold. It is alright so long as properties in good locations are still selling well.”
Meanwhile, residential units that were under construction and unsold in 2Q2019 numbered 9,907, with the bulk of them (8,956 units) being condominiums and apartments. This was followed by 2 to 3-storey terraced houses (406 units), 2 to 3-storey semidees (223 units), low-cost flats (207 units), flats (79 units), detached houses (29 units) and cluster houses (7 units).
Most of the units were located on the island — 41% in the northeast district and 37% in the southwest district — with the rest in central Seberang Perai (11%), south Seberang Perai (8%) and north Seberang Perai (3%).
In the quarter under review, more foreigners, especially those from Hong Kong, visited property showrooms in Penang, notes Geh.
“They are also buying. This quarter, the transactions were at least 50% more than the previous quarter’s. Foreigners normally prefer completed properties with a sea view,” he says.
“The prices have softened but there are a lot of transactions going on and this is very important because it shows that the market is moving. This year’s property market performance is driven by the government’s intervention, whereby it has stimulated the market with different policies and the Home Ownership Campaign. Banks are also positive because they are still lending.”
In the near future, Penang will see more construction of infrastructure and public transport, especially those under the state-initiated, multibillion-ringgit Penang Transport Master Plan (PTMP), which will feature an undersea tunnel linking the island to the mainland, highways, light rail transit (LRT), monorail and extensive bus connectivity both on the island and in the mainland.
Chief Minister Chow Kon Yeow was quoted as saying that PTMP projects will be tendered out in the second half of next year, and that the project delivery partner and the state are currently looking into the financial structure and other aspects of the plan.
Projects under PTMP that will be put out for tender by then are Penang South Reclamation (PSR), Penang Island Link 1 and the LRT projects.
The state government recently concluded a three-month public inspection of the LRT plans, during which the public could obtain information about the project as well as provide feedback. The 29.5km line will connect Komtar to the Penang International Airport as well as the three man-made islands under PSR.
According to news reports, Chow said the state government will set up a special-purpose vehicle to issue bonds to pay for the LRT project, adding that the bonds will be guaranteed by the federal government. He said the state government has started discussions with several banks that could help in managing the funds issued through the bonds.
The Penang Housing Property Monitor for 3Q2019 shows a flat performance quarter on quarter with no movement in prices and rents in the housing schemes sampled. Geh opines that one of the reasons for this is that the schemes are mostly mature areas.
Year on year, only a small number of schemes experienced an increase — albeit a slight one — in transacted prices, namely 1-storey terraced houses (1,200 to 1,600 sq ft) in Seberang Perai Utara and Seberang Perai Selatan as well as 2-storey terraced houses (1,300 to 1,800 sq ft) in Seberang Perai Utara, Seberang Perai Tengah and Seberang Perai Selatan.
In Seberang Perai Utara, the price of 1-storey terraced houses grew 11% year on year to RM200,000 while in Seberang Perai Selatan, it increased 12.5% year on year to RM180,000.
The price of the 2-storey terraced houses in Seberang Perai Utara, Seberang Perai Tengah and Seberang Perai Selatan increased 3%, 2.6% and 3.6% year on year to RM350,000, RM390,000 and RM290,000 respectively.
Semidees, detached houses and highrises have not seen any year-on-year movements across the board since 2016.