Penang Property Outlook 2017
It has been a quiet year for the Penang housing market in 2016. The cooling measures and tighter credit environment have continued to negatively influence the local market. While many are hoping to see a recovery soon, recent disappointing economic performance has further dampened market sentiment. Buyers are adopting a “wait-and-see” strategy as they remain uncertain of the economy’s future.
The delay in the issuance of advertising permit and developers license (APDL) has also contributed significantly to the decline of property transactions in Penang. Without the APDL, developers are not able to sell and promote their projects, nor can they finalize sales and purchase agreements.
The chart above makes it clear that home sales have slowed down over the past three years and are expected to continue that trajectory in 2017. To get a sense of just how much sales have dropped in the past two years, consider the latest data from NAPIC, which indicates that the total housing transactions in first half of 2016 have dropped 13.5% and 25.8% compared to the same period in 2015 and 2014 respectively.
Prices rise despite slower market
Unfortunately, slowing transactions don’t mean that home ownership will become more affordable. PenangPropertyTalk.com experienced record website traffic in 2016 with over 1.79 million visits, beating 2015’s record of 1.61 million by approximately 10%.
There is actually a straightforward explanation for this: People’s obsession with home ownership is not fading, but they are adjusting their risk appetite and waiting for the right deal.
The figures below show the average transacted value for the three most common residential property types (condo, two-to-three storey terrace and semi-detached) in Penang. Undeniably, house prices have generally seen an upward trend, with the exception of condominium and terrace houses located in south-east district of Penang Island.
-
- Penang Island – Condo
-
- Penang Island – Terrace
-
- Penang Island – Semi-D
-
- Mainland – Condo
-
- Mainland – Terrace
-
- Mainland – Semi-D
The landed house prices on the Mainland have shown steady growth over the past two years as upgraders are looking for bigger space for their growing family. The average transacted value for a semi-detached house in Penang Island also registered double-digit quarter-on-quarter growth in Q3 2016.
Deep-pocketed investors look at investing in landed houses as solid investments not only because it comes with a solid land, but also because it is less speculative as many make these their homes. Certainly, the scarcity of land will continue to drive up property prices, particularly for landed houses.
Opportunities during slow markets
The supply of affordable housing has influenced a fundamental shift in the Penang high-rise market, moving it out of rapid recovery and into a new normal where slow growth will stay for the long run. Thus, first home buyers can look forward to a more stable market with ample time to make the right decision. If none of the existing projects appeal to you, keep a lookout on the upcoming affordable houses located in Bayan Baru, Gelugor and Jelutong this year.
Concerns about further depreciation have also kept many people from buying houses during slow markets. However, by recognizing the opportunities that slow housing markets present, prospective buyers can break away from the pack and take advantage of good deals. If you scout around, you will find almost all the developers are now sweetening their deals with freebies, discounts, rebates and other innovative financial assistance schemes.
Penang Mainland – Full of possibilities
As land becomes more expensive on the island, developers are moving to build on the mainland where the abundance of land offers greater opportunities. Exclusivity and lifestyle will be the key development theme — a differentiation strategy which influences the expectation of a new living standard.
EcoWorld’s maiden project at Simpang Ampat, Eco Meadows, is a perfect example of how differentiation plays a vital role in influencing a buyer’s perception of value, setting it apart from the neighboring projects. Prices start from RM700k when it was first launched in late 2015, almost double the price of the surrounding houses and on par with the houses in a remote area of Penang Island. The project is nearly sold out now.
Infrastructure plan is too early to assess
The Penang Transport Master Plan (PTMP), the biggest infrastructural undertaking in Penang’s history, was one of the hottest topics discussed in 2016. It will be the greatest catalyst for the property market in the northern region, and it will help to create a more equitable housing situation for all by making remote township more accessible. Unfortunately, these plans are still too nebulous to have any material effect on the housing market in 2017.
Highlights in 2017
For first home buyers, keep a lookout on a few more affordable options coming up at Bayan Baru, Gelugor, Jelutong and Batu Ferringhi, including two projects by PR1MA. Choose wisely within your means. A branded location does not necessary mean the right location for you.
Properties in a prime location with a price tag of around RM700k-RM800k are expected to enjoy good take up rates. If you have that budget, stay tuned for the upcoming condominium by IJM — 3 Residence and Waterside Residence, and the mixed development by Temasek — BPO Prime at Bayan Baru. Looking for high-end options? Check out the upcoming Marriott Residences at Gurney Drive, Penang Straits Residence at Seri Tanjung Pinang or wait for the new launch of landed properties by E&O property.
Gated and guarded communities on the Penang Mainland remain the ideal lifestyle choice at relatively affordable prices. Check out some of the existing projects before they get out of reach. The upcoming gated and guarded development by EcoWorld (Eco Horizon) and Aspen (Viluxe) at Batu Kawan will set a new price benchmark for properties in Mainland.
Still wondering would the property market recover in 2017 or 2018? Let’s put aside the word “recovery” and recognize the current market as a new normal. New growth will start from here.
– Ken Lim
(Founder, PenangPropertyTalk.com)
Looks like the landed properties are getting more valuable in the island ?
I think this is a good time to buy landed properties on mainland..especially in seberang perai selatan area..currently the prices are not too high and those capable should take advantage for long term investment..
@zhenzi
How about those landed properties in Balik Pulau?They don’t seem to move upwards so much.
It actually does move upwards…. but finding buyers is another story…
Need better transport infrastructure
Forget about balik pulau lah. Batu kawan is good enough, even better than balik pulau. Just leave balik pulau alone for the durian trees.
Just my opinion only. I feel Balik Pulau is still better in pricing as it is on Penang Island. Logically, Penang Island has limited land area until reclamation needed in certain areas. With prices of landed properties over a million RM in the North-East district, even in Batu Maung, Teluk Kumbar, Sungai Ara, Relau and Batu Feringghi, I feel that Balik Pulau has a strong potential although at this moment the only barrier is the hills blocking it from the other districts. And accessibility is still poor despite having 3 alternative routes via Teluk Kumbar, Paya Terubong and Teluk Bahang.
Batu Kawan is on the mainland located strategically because of the second link and with many potentials with factories and shopping outlets. Of course the other surrounding areas may also benefit such as Simpang Ampat, Nibong Tebal and even Jawi. However, land area in Seberang Perai is still huge, development can even expand at a larger scale as compared to Penang Island.
As to conclude, Balik Pulau may be the last chance to own cheaper landed properties on Penang Island. Imagine if there are no hills blocking Balik Pulau from the rest of the island, how will Balik Pulau fare then? Currently one can feel the potentials of Balik Pulau with the Teluk Kumbar highway and later Batu Maung highway to the second link.
Island property gt value but cant earn so much compare to mainland example u buy island property 1mil sell 1.2mil later earn 200k, mailand property buy 500k sell 900k later earn 400k, Island alreay gt value A increase to A+ only increase 5 point, mainland still can develope gt value C increase to B+ increase 30 point, Island 5 point vs mainland 30 point, which better?
@HY
I agree with your perspective on Balik Pulau potential.For the price range of RM700K for DST in Balik Pulau, you can only get a 1100sqf condo in Bayan Baru area.With the upcoming highway linking Farlim, Balik Pulau and Bukit Jambul, the access will be much better and it will give considerable convenience to people working in these 3 areas.Although it will be only completed in early 2019, this highway infrastructure is a positive step towards the future prices of these 3 areas.
I stay in Relau and day by day, the traffic is getting congested.If I move to Balik Pulau once the highway is completed, probably it will take me another 15 mins to reach my work place in Bayan Baru.Furthermore, I get to enjoy landed property instead of dwelling in a pack high rise condo.
Perhaps Duel may be right on the higher price rate appreciation in mainland as compared to the Island. Not sure though but perhaps one thing is certain. The property prices in Balik Pulau (the island rural area) is somewhat comparable to those hot urban areas in the mainland like Seberang Jaya and Raja Uda. The rest like Bukit Mertajam, Alma, Bukit Tengah, Bukit Minyak perhaps stands one step below. Places like Batu Kawan may catch up in years to come, followed by a spill over to Simpang Ampat, Nibong Tebal and Jawi. Kulim is still rather remote, so is Bertam, Kepala Batas and Lunas. But by that time, the prices in Balik Pulau may shoot up further on par with Seberang Jaya.
Just my opinion. As land on Penang Island is limited, personally I feel it will become precious in years to come, inclusive of Balik Pulau. Currently developments are on-going even in the outskirts of Balik Pulau such as in Sungai Pinang (terrace priced at RM 559 K offer period) with many about RM 600 K to RM 700 K. For that price, one can get a semi-D in the mainland but only a terrace on the island. A semi-D in Balik Pulau is priced about RM 900 K to RM 1 million plus from my rough survey.
Agree with Andy that the island crowd is slowly spilling into Balik Pulau with highway ready in Bayan Lepas, Teluk Kumbar and Bukit Genting stretch, now in progress along Teluk Kumbar town along Lexis Suite and Yang Cheng school. Also the construction of the upcoming highway as mentioned by Andy in Jalan Tun Sardon junction to Relau and Paya Terubong with developments by Ideal Properties and Eco World. Not to forget, the long stretch of Titi Kerawang-Teluk Bahang has also been slightly widened with more lightings now with also developments by Mah Sing in Batu Feringghi.
The question is will the mainland property prices such as in Batu Kawan ever be able to overtake the prices in now still slump Balik Pulau? In my opinion, I suppose is no. Because travelling through either Bridges to destinations in the mainland is still longer than access to Balik Pulau through either teluk Kumbar or Relau with the exception if locations are nearby Penang Island like Chai Leng Park, Mak Mandin, Raja Uda and Seberang Jaya.
Only that developments in Balik Pulau may be at a slower pace as very, very little jobs available in Balik Pulau unlike Bayan Lepas with factories.
Just to add on. All the main infrastructures like Penang International Airport are still located close to Balik Pulau separated by just Bukit Genting and Teluk Kumbar. The Second link is also easily accessible with partially ready highways. A separate highway will stretch through Permatang Damar Laut to the Second link. Only a pity that Balik Pulau and Teluk Kumbar has yet to be included in the Penang Transport Master Plan.
I bought one Cluster Semi in Jit sin school ll, called Hijauan Hills by Asas dunia, 38 x 60 at RM498k. Is it worth for investment? Need your experts’ opinions
@HY
I can’t help but wonder why you’re doing all this hard-selling for balik pulau? Hahaha…you’re pathetic.!!
Balik Pulau is as good as DEAD. Want to go watch a movie also dont have cinema. No malls, any shit also dont have. Most hawker foods there taste like shit. WTF.
Thanks for your opinion Deepthroat. Patient my friend. Balik Pulau will rise for sure. It is near the Penang International Airport with now highway linking almost completed from KKTM right through Tlk Kumbar to Bayan Lepas. You can feel it yourself if you take a drive there. Specifically, any landed properties on Penang Island is precious. Generally, all landed properties are precious. Am sure many will agree.
A hospital is confirmed as planned in Botanica CT. So is a shopping mall. Of course agree with Deepthroat that at this moment Balik Pulau seemed like a dead hollow with even a cineplex. Yep for now. But for sure it will rise up as a next “Bayan Baru”
@HY
10 yrs ago my manager moved to balik pulau, and said within 5 yrs balik pulau will boom.
Fast forward to today, 10 yrs later, balik pulau still same dead town…
Dont compare with Bayan Baru where a lot job opportunities… what job u have in b.pulau ? Tanam durian ? Hahahahaha
You are right to this aspect BBB. But Balik Pulau has other potentials like Education Hub as once announced by Penang State Government. Actually many untapped potentials for development in Balik Pulau, Teluk Kumbar and Teluk Bahang. Factories may be possible but on smaller scales or light industry just like Teluk Kumbar. Of course agree that we cannot really match like in Bayan Baru. Batu Maung is in between with industries in Diamond Valley. Agree that development is slow in the south-west and western side of the island, but there is still development. Just a matter of time
@HY
I moved from landed to a condo 10 years ago, and I can tell you that I will never move back to landed anymore. We enjoy condo living so much, with the swimming pool, gym, security, seaview, which we didnt get to enjoy back in the landed days.
And by the way, as far as your “education hub” is concerned, I think it is as good as a gone case. Even Prince of Wales International School has decided to build their primary school in Tanjung Bunga, instead of Balik Pulau. Oh yes, I know, patient, patient, it will slowly slowly rise up right? Rocket already reached the moon lah, you still slowly slowly crawling in your cave.
@HY
Yup it might be slow but development will surely catch up one day. If you view Balik Pulau through Google Earth you will find that there are quite a number of developments in the whole area. Development there is slow because the entire balik pulau land mass is huge plus there is little connectivity with the rest of the island. When the highways are all fully developed im sure it will provide a boost to the economy there.
Personally, I am not keen on Balik Pulau too as travel time and conveniences are also a major concern.
Yes condo is nice but the maintenance fees keep going up.
Typically for decent size condo maintenance fee is RM200-RM400….and over long run keep going up.
On facilities, no worries as so many friends and relatives have condo here….
Plus I love convenience of parking and in/out daily and especially for family and long run.
I changed from condo to landed as Bayan Lepas, & sg Nibong area surroundings still safe and reachable (not foreign workers areas), given price stagnation for last 3 years.
Good primary SJKC schools are easily to choose. I don’t mind make 2 trips up/down to town as easily connected via coastal highway.
“there is little connectivity with the rest of the island. When the highways are all fully developed… ”
this is the main big problem……federal gov dint giv much attention & $$ to build, and state gov don’t have $$ to build, so have to wait long long long long …….
@NG
In my opinion, we should just leave balik pulau alone. We should not go round developing every inch of penang island, leaving only concretes for our next generation. For goodness sake, if we need more houses, just build it in batu kawan, plenty of land there.
It does not make economic sense to build expensive roads to connect to balik pulau, while you already have batu kawan.
Good sharing of different opinions. Thanks for the info.
Besides POWIIS, there is also Island College of Technology, MARA and KKTM.
Elevated highway from Balik Pulau thr Bukit Genting, Tlk Kumbar and Bayan Lepas esp. to airport and perpendicular highway thr Permatang Damar Laut, Diamond Valley to Batu Maung to link to Lim Chong Eu expressway. At the moment this is good for Balik Pulau.
Batu Kawan has its own development as well with Design Village, Stadium, IKEA and others.
Luxury hotel in Tlk Kumbar were unheard of previously. Now there is Lexis Suite.
Accessibility still has rooms for improvements although the travelling time now from Balik Pulau to Bayan Lepas has been shortened with the elevated highways.
Opinions may be different for everyone