Positive outlook for Penang properties
House prices in Penang have generally increased or remained stable in the second quarter this year, while rents have mostly stayed unchanged or slightly dipped, according to sampling for The Edge/Raine & Horne International Zaki+Partners Penang Housing Property Monitor (April to June 2004).
According to Raine & Horne International Zaki+Partners' director Michael Geh, who presented the fin—dings, the improved sentiments are in tandem with Malaysia's improving economy and he expects the positive mood to continue throughout the year.
Geh based his optimism on the economic outlook, adding that all economic indicators for the first half of 2004 (1H2004), released by Bank Negara Malaysia, have been strong. Real gross domestic product recorded a robust 7.6% growth in the first quarter this year, compared with 4.6% in the corres—ponding quarter last year.
"Other factors, such as an impro—ving stock market and a stable job market, with no major companies pulling out of the country, also contribute to the feel—good sentiment," offers Geh, who expects the Penang property market to perform better in the 2H2004, barring unforeseen circumstances such as the Severe Acute Respiratory Syndrome outbreak.
Of the areas surveyed, rising values are noted in 1— and 2—storey terraced houses and semi—detached homes, which, on average, increased by 3% to 10%. On the other hand, values of detached houses remained unchanged, except for a marginal rise of RM10,000 to RM890,000 in Island Glades.
The best performing segment was the 2—storey terraced houses, which recorded a 2% to 14% rise in value. The other areas surveyed also charted price growth, except for Seberang Perai Selatan and Sungai Nibong.
In fact, properties in Seberang Perai Tengah were the biggest gainers at 14.3%, with prices rising from RM175,000 to RM200,000. Geh puts the jump to a price correction — the pro—perties there have been undervalued since the economic crisis of 1997/98 and are only bouncing back now.
For strata—titled properties, 3—bedroom flats did well, with prices improving 1.5% to 4% on average. Flats in Sungai Dua and Lin Sip Garden stood out for a 4.2% gain to RM125,000. Meanwhile, prices of apartments/condominiums stayed at the previous quarter's levels.
Geh says these apartments and condos had been a subject of "over—investment" during the property boom in the 1990s. He says that some investors who had bought two or three units are beginning to cash out since the capital appreciation and yields are below their expectations.
Rents and yield
Rents of housing property in Penang turned in a mixed performance during the period under review, with the bulk of the homes surveyed showing rates similar to those registered in the first three months this year. Consequently, yields also had a mixed showing — a trend that does not worry Geh, who reasons that generally, values are rising faster than rents.
Sampling for the Housing Property Monitor shows that yields for landed properties ranged from 2.2% to 4% against a more attractive 4.8% to 6.9% range for strata—titled homes surveyed.
Rents of 1—storey terraced houses in Jelutong and 2—storey terraced houses in Pulau Tikus dipped from RM580 to RM560 and from RM1,150 to RM1,100 respectively, due to what Geh sees as competition from neighbouring addresses.
Still, there were exceptions, such as 2—storey terraced houses in Sungai Nibong, where rents increased from RM750 to RM800, and 3—bedroom apartments/condominiums in Tanjung Tokong, from RM1,500 to a marginally higher RM1,550.
Primary market scene
New landed homes in Penang continue to be sought after, including those in the million—ringgit league.
Geh points out that The Palm Residences in Minden Heights developed by Harta Intan Venture Sdn Bhd has recorded about 50% sales since the launch last November. The freehold development offers 23 individual—titled 2—storey bungalows, with plots sized from 4,000 sq ft to 9,200 sq ft and built—up ranging from 2,740 sq ft to 3,650 sq ft. The tag: RM1 million to RM1.9 million.
On the apartment/condominium front, the newly launched freehold Bayswater Resort Condo on Jalan Udini has received good response. Developed by IJM Properties Sdn Bhd, the 396 units housed in two 26—storey blocks offer built—up ranging from 1,173 sq ft to 1,636 sq ft. These cost FROM RM261,000 to RM395,000.
Block B was launched in June, with 70% sales at press time. Block A is scheduled to be launched end of this month.
The project is a feature of IJM's integrated project, MetroEast—Udini, which features, among other components, an office block called e—Gate and a hypermarket (Tesco).
- THE EDGE DAILY
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