Jul 16, 2012
Penang City: Situated along the north-western coast of the peninsula, Penang is Malaysia’s only “island state”.
Despite housing credit restrictions and a glum global economic outlook, Kuala Lumpur developers are advancing with RM6.5 billion (US$1.4 billion) worth of residential and commercial properties on the island and mainland, in 2012-13.
Developers investing in Penang housing projects include SP Setia Bhd, with a capital investment value of RM2.6 billion (US$818 million), IJM Land Bhd (RM608 million) (US$191.3 million), Sunway Bhd (RM385 million) (US$121.1 million), Ideal Property Development are imbuing RM1.1 billion (US$346.2 million) worth of capital, and Ivory Properties Group Bhd plan to invest RM1.6 billion (US$504 million), over the second half of 2012 and into the following year.
Approximately RM6.1 billion (US$1.9 billion) of projects will be situated on the island, the remaining RM358 million (US$113 million) is scheduled for investment from Sunway and IJM Land in Seberang Prai.
Land availability in the South-West district: Sungai Ara, Batu Maung, Bukit Jambul, Sungai Nibong, and Teluk Kumbar, continue to be popular locations for developers; in particular SP Setia, Sunway, IJM Land, and Ideal Property.
Barring Sunway Cassia and IJM’s Trehaus, landed property schemes project in Batu Maung and Bukit Jambul, all other projects planned for the island comprise high-rise projects.
This trend of economic build is due to rising land cost, said Datuk Jerry Chan, chairman of Real Estate and Housing Developers’ Association (Rehda), Penang.
He said: “A few years back, developers could still build landed properties because they could be priced attractively.
“Nowadays, with landed cost escalating by about 20 per cent from last year, developers will have to price a semi-detached house from RM900 (US$283) per sq ft, onwards, in a prime area like Pulau Tikus as the cost for net land plot is RM500 (US$157) to RM600 (US$189) per sq ft.
“If the semi-detached unit has a built-up of 6,00 sq ft, the selling price will be RM5.4 million (US$1.7 million).
“How many people would fork out RM5.4 million (US$1.7 million) for a semi-detached home?” he begged the question.
In a prime area such as Pulau Tikus, the cost of a plot of land is priced between RM300 (US$94) and RM400 (US$126) per sq ft.
Chan said there is still demand on the island for landed properties priced below RM2 million (US$629,566) and condominiums priced below RM1 million (US$314,866), reported The Star.
He said: “This is the reason developers are still carrying out their plans to launch projects despite the stricter policies on housing loans and concerns over upcoming general election. The state’s economic status is still sound.”
According to Penang Master Builders’ and Building Materials Dealers Association executive advisor, Datuk Finn Choong, developers are launching projects also because of stability in raw material prices.
“By launching their projects now, developers can lock on to the present prices of construction materials for their projects,” he said.
The pricing of cement has not exceeded RM15 (US$4.7) per 50kg bag, since last year; due to the softening of construction material demand.
This therefore allows developers to price their properties within the RM400,000 (US$125,592) and RM500,000 (US$156,990) range, said Choong.
Henry Butcher Malaysia (Penang) director Dr Teoh Poh Huat said Penang property market sentiment is still positive.
He said: “High net-worth Penangites living overseas still have confidence in the local property market. Thus, the property values look set to grow, particularly for those properties which are well designed, in good locations, and underpinned by a reputable developer.”
The price for properties in Central Seberang Prai have appreciated by about 20 per cent since 2010, according to senior manager, Fook Tone Huat at Henry Butcher Seberang Prai.
“In prime locations of Seberang Prai, a semi-detached house is now priced at about RM750,000 (US$236,165).
“A terraced house in a similar location is now priced at about RM350,000 (US$110,210) compared with about RM280,000 (US$88,168), two years ago,” he said.
A selection of properties will be displayed at The Star Property Fair 2012, held at the Gurney Plaza and G Hotel from July 12-15.
By Laura Neve Tacey
