Penangites working in China and Singapore are taking up property in Penang, thus providing a stable demand to drive the growth of the local property market this year.

Henry Butcher Malaysia (Penang) Sdn Bhd senior business development manager Law Beng Yeow said that Penang’s residential properties would continue to be attractive despite a slowing GDP forecast, which was expected to be around 5.5% to 6%, compared to about 7% a year ago.

“Penang is on the map of many overseas Penangites, especially those working in China and Singapore, who want to leverage the strong foreign currencies they are earning to invest in local properties, which are still priced competitively in the Asian region,” Law said.

“They go for landed and high rise in choice locations such as properties in Pulau Tikus, Tanjong Tokong, Tanjung Bungah, Batu Ferringhi and Green Lane.

“The demand is reflected in the increase in the selling prices of such properties in the secondary market,” Law said in an interview held in conjunction with tomorrow’s ninth Star Property Fair 2011 in Penang, which will be held at Gurney Plaza and the adjoining G Hotel from Thursday to Sunday.

Law said landed property in these neighbourhoods transacted in the secondary market have risen by about 10% compared to last year, while high-rise properties have risen between 5% and 10%, all depending on the location, size and specifications.

“For example, an average size landed terraced unit with a built-up area of approximately 2,000sq ft to 3,000sq ft is now priced between RM1mil and RM1.5mil, up from about 10% from last year,” said Law.

“For a semi-detached unit with a built around 3,000sq ft to 4,000sq ft, the current price ranges from RM1.8mil to RM2.8mil, up from about 10% from last year.

“A condominium unit with a built-up area of about 2,500sq ft to 5,000sq ft is priced between RM700,000 to RM3mil, about an increase of 5% to 10% growth from last year’s pricing.”

He said new landed and high rise property in these areas to be launched soon were expected to be priced slightly higher from the present price levels in the secondary market.

“The local property market is expected to continue to grow but at a slower pace this year, as we have already seen a big rush to take up properties in 2010,” Law added.

On the high prices of Penang property, Henry Butcher Malaysia (Penang) vice-president Shawn Ong said the cap on the third property loan to 70% had deterred speculators from coming into the property scene.

“Those coming in now are genuine investors with the cash to hold to the property.

“High commodity prices and the volatile stock market overseas are continuing to prompt medium and long-term investors to take up properties, which are considered to be lower-risk,” he said.

Ong added that the trend forward was towards medium market properties, as developers were taking into consideration the affordability level of home purchasers.

“This is why we are seeing more recent developments in the past 12 months of high-rise units on the island, with built-up of over 1,000sq ft, priced between the RM300,000 and RM500,000 range, which have received overwhelming response.

“Such property are now being developed in Bayan Baru, Bayan Lepas, and Air Itam townships,” he said.

The Star Property Fair 2011, organised by The Star in collaboration with Henry Butcher, will be open to the public from 10am to 10pm daily, and admission is free.

To date, 28 major developers — representing almost all the big boys in the industry — along with several financial institutions, have taken up booths at the Star Property Fair.

The fair will also see RM30,000 worth of prizes to be won for the ‘Surf, Click & Win’ contest which is sponsored by IJM Land.

SOURCE: The Star