With escalating prices of houses on the island, property buyers would be forgiven for thinking that it is impossible to get into the market in the next 1-2 years. Henry Butcher’s Penang’s Property market research report for 2Q2016 detailed that the total volume of residential transactions in 2015 saw a drop of 16% from the previous year. Penangites find that houses in the state are getting more expensive to purchase or rent, while affordable housing is hard to come by with the long waiting list.
Residential Demand Remains Strong
However, Henry Butcher reports that demand is still strong for projects with catalytic components such as well-planned commercial centres and transit-oriented developments that provide connectivity and accessibility.
Miichael affirms to this – His recent My First Home Convention in Penang received tremendous response from the locals and he garnered feedback that many, especially the Gen-Ys are interested in purchasing their first property.
The underlying problem is that many aspiring homeowners cannot get a home loan approval and also the prices of homes on the island are too pricey.
Hence, many aspiring home buyers are now shifting their attention to properties on the mainland as prices on the island have escalated beyond their means.
Why Balik Pulau is the Next Property Hotspot
Balik Pulau is the main township in the southwest part of Penang Island. The township has long been home to an aging population with the younger generation moving to the east of Penang island for more job opportunities and to get a taste of city life.
However, all of that is about to change.
Elaborating on its potential, Miichael said that Balik Pulau’s case is very much similar to that of Green Lane’s, a suburb south of Georgetown.
20 to 30 years ago, very few had the desire to purchase a property in Green Lane as it is too far away from the city centre and was perceived as a backwater area.
Fast forward to the present, the area which has seen improvement in accessibility and transportation works is now one of the most sought after addresses among expatriates and the more affluent locals.
Similarly, the once quiet hamlet of Balik Pulau is now seeing an increase in housing projects, spilled over from the expanding metropolitan area of the west coast of Penang Island.
Land scarcity is the main issue of Penang’s housing market – the island which has a population of roughly 800,000 measures only 292 sq km in size.
As Balik Pulau is the last area on the island that has pockets of undeveloped land, the state government is going all out to improve its accessibility – ongoing infrastructure projects include the building of new roads and bridges going out and into the area.
The stretch of the Balik Pulau Hill Road between Teluk Kumbar and Balik Pulau is currently undergoing a major widening exercise; which once completed, will ease current traffic congestion in the area. At the moment, there are daily traffic jams at the junction of Jalan Permatang Damar Laut heading towards Bayan Lepas.
As for the traffic bottleneck at Paya Terubong, a new road is being built at this juncture, to solve the problem. The road will be open for public’ use in two years time.
Land prices have also seen a significant increase over the years. Many developers are now buying land banks in the area. There are a few ongoing projects – one notable one is Botanica C.T, a freehold sustainable township located 5km away from the Balik Pulau town centre.
Developed by MTT Properties, the project includes 9 phases of carefully-planned 2 to 3-storey terrace homes and bungalows, including apartments and a shopping mall.
The township will also have its very own international boarding school as well its own commercial village, retirement resort, medical center, health and spa resort and a residential clubhouse in a few years time.
According to Department of Statistics, Malaysia, as of 2010, the total population in the area was 32,489. This figure would have grown considerably since then.
A Residential Haven
Some people might think that Balik Pulau is too far from the city centre and industrial areas such as Bayan Lepas. As Miichael puts it, with improvements in road connectivity and infrastructure, it is only natural for development to follow.
It will take some time, however for Balik Pulau to be the next growth centre of Penang. He is certain that in the next 5-7 years, there will be even more developments coming up in the area and first time homebuyers will be turning their sights to the area.
Miichael personally feels that Balik Pulau is the only place where you can live, work and play in Penang. Not only is the area blessed with abundant greenery, the town is famous for numerous affordable local delights such as durians, Assam laksa and fresh seafood. Balik Pulau is also actually a homestay haven as there are plenty of recreational activities for tourists to explore – including goat farms, horse riding and the Hakka Village.
Recognising its appeal as a residential hotspot, his company, GM Training Academy PLT recently organised a Balik Pulau study tour in July. The tour was catered for aspiring property purchasers was well received and saw two instalments.
Miichael advises aspiring homebuyers and even investors to look at Balik Pulau as the prices of properties there are still much more affordable than other areas on Penang Island. Also, with Balik Pulau slated to be the next growth centre of Penang, the potential for capital appreciation of properties there is very promising. Moreover, rental properties are not faring well in the current market – the current average rental returns for properties in Penang is only 2% and will not cover investors’ monthly instalments.
To read more of Miichael Yeoh’s articles on property investment and mortgage tips, visit www.miichaelyeoh.com. You can also follow Miichael Yeoh on Facebook for the latest updates on his talks and seminars.
This article was first published in the iProperty.com Malaysia October 2016 Magazine. Get your copy from selected news stands or view the magazine online for free at www.iproperty.com.my/magazine. Better yet, order a discounted subscription by putting in your details in the form below!
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