Buying opportunities still abound in Penang high-rise market. Here’s 5 reasons why

Thanks to the improving economy and various form of government interventions, if you know where to look, there are pockets of opportunities in the Penang high-rise market this year.

Penang-high-rise-property-market

©️ 123rf.com | Joseph Lim

For a while now Penang’s property market has been recording a downtrend in terms of volume of transactions. It is no secret that in the residential sector, over-building has caused the market to stall while the high-end market (RM1 million and above) has been sluggish. National Property Information Centre’s (Napic) reported that the number of unsold properties in Penang in the first quarter of 2018 totaled at 4,092 units worth RM3.44 billion.

Despite this seemingly grim outlook, a closer look at a quarter-to-quarter comparison shows that the value of transaction continues to record an improvement. This year’s market is expected to remain flat yet resilient which means, if you know where to look, there are pocket of opportunities in the Penang market.

Pocket #1 The stamp duty waiver offered to 1st-time buyer

stamp duty waiver for1st-time buyer

©️ 123rf.com | Gorkem Demir

With only a month left until June 30, it’s still not too late to take advantage of the Home Ownership Campaign (HOC) 2019. For those of you who are unfamiliar, HOC is an initiative by the government that aims to help aspiring homeowners who are struggling to own a home and to help alleviate the current glut of unsold properties in the market.

Under HOC, residential units that are priced between RM300,000 and RM1 million will be exempted from stamp duties, while those with price tags upward of RM1 million would be charged a stamp duty of three per cent. Other incentives include a minimum of 10% discounts on all unsold properties as special packages offered by individual property developers.

The good news is, those who purchase a property before 30 June 2019 but only get their SPA signed in July 2019 will still be eligible for the stamp duties exemptions on MOT & SPA and on Loan Agreement.

Pocket #2 The realization of Penang Transport Master Plan (PTMP)

Penang Transport Master Plan (PTMP)

©️Ideal Property Group

The government sees promising future for the Penang’s property market once their long-term plan in boosting connectivity via the Penang Transport Master Plan (PTMP) is realized. The first phase of the PTMP will see to the development of Pan Island Link highway and the Bayan Lepas LRT system, which will be one of the biggest catalyst for change.

These infrastructure improvements will ensure that the locations which are currently only accessible by cars are better served with public transportion. The completion of the PTMP will boost connectivity in Penang, which in turn will help stimulate the Penang property market tremendously.

Areas with close proximity to the proposed LRT stations, such as the Penang International Airport, Bayan Lepas, Bayan Baru, Jelutong, Gelugor, Batu Uban, Sg Tiram and Batu Maung will see an increase in housind demand. Bayan Lepas for example, has started seeing a steady increase in transaction of high-rises from 274 in 2016 to 367 in 2017.

Pocket #3 The market is already experiencing correction

market experiencing correction

©Andrii Yalanskyi | 123rf

A recent data published by NAPIC indicated a increase of 4% in residential property transaction volume while the average transacted price for the residential segments saw a slight drop of 3% in Q1-Q3 2018 year-on-year.

Major states namely Kuala Lumpur, Johor and Pulau Pinang recorded an increase of 6.8%, 7.8% and 3.0% respectively in market activity.

According to NAPIC’s recently launched Malaysian Property Market 2018 report, property market activity in 2019 is expected to stabilize judging from the increase in volume and value of the total transaction at the end of 2018.

The report also clarifies that overhang does not necessarily mean oversupplied. There are other contributing factors such as mismatch, affordability & costs of living. In the case of Penang high-rise market this year, it’s a matter of finding the right location, the right price, and the right type to create a buying opportunity.

Pocket #4 There are buying opportunities in areas with catalyst developments

Penang International Exchange (PIX).

©️Ideal Property Group

Other than Tebrau, Bayan Baru is poised to be one of the hottest townships in the island due to the upcoming 15-acre Penang International Exchange (PIX). One completed, PIX will become Bayan Baru’s one-stop integrated city development, offering business space and living flexibility that include office, innovative co-working spaces, retail, dinning, residential condominium and serviced suites.

To top it all, we may be developing our very own Marina Bay thanks to the Penang South Reclamation (PSR) project in a JV spearheaded by Gamuda Berhad. Naturally, this puts the oil in Penang’s economic engine, which will lead to the creation of new tourism products.

As the project will be anchored on the state’s strong electronics and electrical (E&E) sector, it shows great potential to be Penang’s next key economic driver.

The plan is to create three different islands (A, B and C) off the coast to cater to three different economic opportunities. Island A will capitalize on its proximity to the airport, which will make it a prime area for factories’ product shipment, and effectively turning it into a new industrial park.

Island B will act as a hub for high-end support services for the said industrial park which includes financial services and business services; and most importantly, island C will be a hub for the creation of newer tourism products for Penang. The proximity of these three islands, coupled by their connectivity to the thriving Batu Kawan area, will jumpstart a need for an efficient transportation system and housing.

Pocket #5 Various government initiatives introduced in 2019

Government initiatives

©️The Amarene

The government is working closely with private developers as well as several banks to create financing schemes that will help solve the property overhang issue. Through some of these schemes, the banks are purchasing properties from developers and leasing the units out to aspiring homebuyers who are unable to afford a down payment.

Since out of the 4,903 overhang units, 2,600 were properties priced above RM500,000, most of these innovative financing schemes are designed to help drive this sluggish segment (between RM400,000 and RM1 million).

The government is also making 20% of affordable homes in Penang available for purchase to prospective buyers from other states under the “open market” category of affordable houses.

Those looking to purchase properties that fall within this price range should capitalize on these initiatives and look for high-rise projects located close to the proposed LRT stations under the PTMP. Some examples of the available new projects in the area and its proximity are Sunsuri Residences (priced from RM331,000 onwards) which is located in Bayan Lepas and The Amarene (priced from RM602,000 onwards) which is strategically located along Jalan Tun Dr Awang, just minutes away from the Penang International Airport.



 

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