Prices of new launches likely to rise
The current steel shortage, which is expected to pressure high-rise development in particular, appears to be the only black mark in an otherwise promising year for the general housing property market in Penang.
Michael Geh, director of Raine & Horne International Zaki + Partners, says the scarcity of steel has already nudged construction costs up 15% for high-rise developments. The additional cost will likely translate into pricier new launches, he adds.
Since the 1997/98 Asian financial crisis, a drop in demand for high-rise homes on the island has caused prices to retreat by roughly 15%. Meanwhile, prices on the mainland have dipped by at least 20%.
Overall, Geh expects prices of housing properties unveiled in the next six months to rise by at least 10% because of the rising cost of building materials.
On a brighter note, however, Geh sees political stability setting the stage for prices of landed homes to rise.
Quarter-on-quarter yields
Sampling from The Edge/Raine & Horne International Zaki + Partners Penang Property Monitor (January-March 2004) reveals a mixed set of yields. Except for higher-end homes - 2-storey semi-detached and 2-storey detached types - the yields of which remained unchanged from the last quarter of 2003, other types of property saw yields unchanged or moving up or down marginally.
Geh reasons that this was probably due to a quiet market in the run-up to the recent general election. Furthermore, lower yields can also mean that higher capital values have been captured alongside stable rents.
Value hikes
Of the 38 areas surveyed for the Penang Housing Property Monitor, 20 reported price hikes ranging from 1.2% for the 2-storey terraced units in Green Lane to as much as 8.7% for the 2-storey detached homes in Minden Heights. The remaining 18 areas reported stable prices. The best performers were the 1-storey terraced and 2-storey semi-detached homes the prices of which rose as much as 6.25% and between 3.3% and 3.8%, respectively.
According to Geh, this is in line with the general preference for landed housing. The 1-storey terraced units offer an opportunity to own a landed home at the lowest entry level while the semidees are preferred to high-rise units by affluent buyers in general.
Prices of the popular 2-storey terraced homes in Green Lane, Sungai Ara and Seberang Perai Selatan rose by 1.2% (to RM410,000), 4.1% (to RM380,000) and 4% (to RM130,000), respectively.
The prices of the 2-storey semidees surveyed also improved for the quarter, with prices in Island Park, Desa Ara, Sg Nibong and Minden Heights rising by as much as 3.7%. Those in Sg Dua remained stable at RM520,000.
As for the higher-end, standard 3-bedroom apartments and condominiums surveyed, prices were unchanged except in Tanjung Tokong and Island Park Glades, where they improved by 1.8% (to RM270,000) and 2% (RM250,000), respectively. The cheaper flats did better, with those in Bandar Baru Air Itam, Paya Terubong and Relau reporting a price rise of up to about 5%.
New trends
The buzzword in the Penang property market, Geh tells City & Country, is product differentiation: developers are selling features and concepts instead of standard brick-and-mortar houses.
They are more keen on the gated, strata landed homes rather than high-rise units which seem less sought after and, therefore, more difficult to market.
"When developers build high-rise units, there is a risk that these will not be 100% sold.
Super-link homes are also popular with developers who are building units that are wider and higher and, therefore, more expensive. As concepts get more sophisticated, architects and designers will have to step into buyers' shoes to determine market needs and preferences, he adds.
Can the market digest the higher price tags of the new and improved landed units? Geh reckons such products will do better on the island than the mainland, where the market is more sensitive to price increases.
Unveiled
Since the second half of last year, offerings in good locations have seen positive response. One of them is the leasehold project in Bukit Jambul's Krystal Garden by developer Reka Mesra Sdn Bhd. The project offers 73 units of 2-storey semidees and two bungalow units with prices starting from RM440,000 and RM784,000, respectively. At press time, 70% of the semidees and both the bungalows were believed to have been sold.
Another leasehold strata development, unveiled last June, is Putra Place along the Coastal Highway by Techware Enterprise Sdn Bhd. The 1,000 sq ft units are pegged at RM150,000 while the duplex penthouse unit, with its 2,000 sq ft built-up, costs RM375,000. At press time, about 75% of the total 626 units had been sold.
Going forward, Geh sees a need for developers to design and build according to buyers' increasingly sophisticated tastes. "The demand now is for quality, contemporary lifestyle homes," he adds.
- THE EDGE DAILY
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