PENANG REAL ESTATE MARKET Opportunities …...2 The tourism industry which include traditional and...

1

Malaysia’s economy grew at slower pace

Malaysia has a population of 31.7 million people

in 2016 with annual growth rate of 1.5%.

Gross Domestic Product (GDP) in Q2 2016 record-

ed a growth of 4%. This was contributed by the

resilient growth in services, manufacturing and

construction sectors. However, the sluggish

growth in agriculture affects the overall econom-

ic performance for this quarter.

Public and private investments in oil and gas

were reported to fall substantially.

Wage growth is stable with non-performing loan

reported to be falling. Unemployment rate was

3.5% as at June 2016.

As at June 2016, Consumer Price Index (CPI) in-

creased by 1.6% to 114.8 compared to 113.0 in

the same month last year.

Source : Department of Statistics, Malaysia

Source : Department of Statistic, Malaysia

Source : InvestPenang/Penang Institute

PENANG REAL ESTATE MARKET

Opportunities despite weak sentiments…. Research Report @ Q2 2016. For internal circulation only

Penang continues to be the hot spot for

property investment

Penang’s population stood at 1,663,000 as at

2015 with North-East District on Penang Island

being the highest population density followed by

Central Seberang Perai District. The population in

the North-East District grew at an average rate of

1.4% every year with the South Seberang Perai

District being the least dense.

Penang continues to be the top hotspot of

property growth and investment, other than

Iskandar and Klang Valley. Penang is well-placed

geographically in the Indonesia-Malaysia-

Thailand Growth Triangle and the Bay of Bengal

and Penang has always been a choice destination

for property investment.

Copyright reserved @ Henry Butcher Malaysia Penang

2

The tourism industry which include traditional

and medical tourism continues to contribute to

the stable economy growth for Penang.

Penang, a must-see destination in 2016

In October 2015, an American newspaper pub-

lisher has listed Penang Island as one of “must-

see’ destinations in 2016. The 16 destination list

in the travel section of the Los Angeles

Times described the George Town Unesco World

Heritage Site as a "500-year-old history of trad-

ing and a hotel boom in progress." This news is

indeed encouraging. Penang is expecting more

tourists this year compared to 6.3 million of

tourists arrivals recorded last year.

Indonesia formed the largest numbers of visitors

with 39.3% out of the total international visitors

to Penang followed by Singapore and China.


Opportunities despite weak sentiments... Research Report @ Q2 2016. For internal circulation only


Penang’s economy remain resilient

Manufacturing remains the core contributor of

the Gross Domestic Product (GDP) growth, fol-

lowed by services. Penang is still very much con-

nected to Malaysia’s overall economy health and

it was forecasted that Malaysia will experience a

lower GDP growth in 2016. This will thus have an

impact on Penang’s growth this year.

However, Penang’s economy is expected to con-

tinue to be resilient as the job market remains

healthy with unemployment rate at 1.6% in

2015.

In 2016, Penang recorded the highest Foreign

Direct Investments of RM4.5 Billion compared to

other states. This contributed to 20% of the total

FDI in Malaysia. Penang’s future success is to

seek convergence between manufacturing and

services sectors so that it will be less dependent

on Electronic & Electrical sector.

Penang’s services sector see the emerging eco-

nomic activities of creative multimedia and glob-

al business services. In October 2015, Penang

launched Penang Accelerator for Creative, Ana-

lytics & Technology (@CAT) in 2015 to promote

creative & technology start-up entrepreneurship.

3 Copyright reserved @ Henry Butcher Malaysia Penang

Highlights of Budget 2016 - Revision on

Properties

First Time Home Buyers Only

For new housing projects, houses priced below

RM300,000 shall be limited to first time home

buyers only.

First Home Financing Scheme (MyDeposit)

To help the middle 40% income bracket with

household incomes of between RM3,000 and

RM10,000 (M40). It involves a contribution of

10% of the sale price or a maximum of

RM30,000, whichever is lower, to first-time

house buyers to help them buy a house not

more than RM500,000.

Public Housing

For the public housing project involving houses that cost RM35,000, the government will offer, through Bank Simpanan Negara and Bank Rakyat, a financing package at a rate of 4 per cent for more than 10,000 homeowners starting 1 March 2016.

More than 100,000 housing units will be offered

in the government’s integrated house ownership

programme.

Visa Free for China

The implementation of eVisa to several coun-

tries have been identified to facilitate the entry

of tourists.

Tourists from China do not require a visa to visit

Malaysia or Visa Free, commencing from 1



March to 31 December 2016, subject to specific conditions for a period of stay not exceeding 15 days.

Latest Developments in Penang

The Gurney Wharf or “Park On The Sea”

Gurney Wharf was first unveiled on the 23 Febru-

ary 2016 with the view to obtain feedback from

the public. Once complete, it will become an icon-

ic waterfront destination for Penang.

The seafront Gurney Drive will be reclaimed and

turned into a public park which will comprise of

seaside retail food & beverage, water gardens, a

man-made 400 metres of sandy beach and a

coastal grove.

Spanning over 131 acres, the reclamation work

will be undertaken by Tanjung Pinang Develop-

ment Sdn. Bhd. (TPD), a subsidiary of Eastern &

Oriental Berhad (E&O).

The reclamation cost of Seri Tanjung Pinang

Phase 2A which includes 131 acres of the Gurney

Wharf is estimated at RM1.07 billion. Upon com-

pletion, Gurney Wharf becomes the property of

the State Government.


There will be two underpasses :

from Jalan Pemenang to park area (100 m);

to promenade (230 m)

from Jalan Burmah to park area (100 m); to

promenade (140 m)

The reclamation work is expected to be complet-

ed in the first quarter of 2017 which include 8 to

10 months of land reclamation and 6 to 8 months

of soil treatment and settlement.



The length of the new promenade is approxi-

mately 1.5km. The park area will be completed

in mid-2018 whilst the seafront retail food &

beverage will be ready by 2020.

While the reclamation work is in progress, the

existing Gurney Drive is still accessible and has

now been installed with anti-climb mesh fencing

measuring 2 km. This fencing is expected to re-

main until the whole project completes.




Penang Transport Master Plan

Under the Penang Transport Master Plan, SRS

Consortium, the appointed delivery partner will

be reclaiming 1,497 hectares of land, of which

290 hectares will be for industrial development.

SRS Consortium, a joint venture with Gamuda

holds 60%, with Ideal Property Development Sdn.

Bhd. and Loh Phoy Yen Holdings Sdn. Bhd. hold-

ing 20% each.

PTMP envisioned to change the transportation

and housing landscape in Penang, in terms of up-

grading transport system and improve connectiv-

ity and accessibility as well as reduce traffic con-

gestions.

The RM27billion PTMP will comprise a network

of public transport, highways and roads that will

be integrated with various modes of existing

transport to serve the future population and sup-

port the economic growth of Penang.

Table 1 Penang Island and Seberang Perai

Proposed Lines

PENANG ISLAND

PROPOSED LINES

SEBERANG PERAI PROPOSED LINES Length

(km)

No. of

Station

Length

(km)

No. of

Station

Bayan Lepas LRT George Town (The Light) - Butterworth Penang Sen-

tral - Sg Nyiur LRT

30 27 18 8

Ayer Itam Monorial Raja Uda - Sg Nyiur - Bkt Mertajam - Permatang Ting-

gi Monorial

Extension northwards to Kepala Batas

13 13 28

13

21

10

Tanjung Tokong Monorial Permatang Tinggi - Batu Kawan

Extension northwards to Bkt Tengah - Seberang Jaya

Extension southwards to Nibong Tebal

7 8 14

15

11

15

16

6

Tram Total 2 6 99 76

Total 52 54 Grand total 151 130

PTMP will be financed by the sale of the reclaimed

islands in the southern coast of Penang Island.

Major works will commence in 2017 with the

Bayan Lepas LRT and Pan island Link 1 being the

priority projects.

Heritage sites in the inner city of George Town will

not be affected as the LRT and future transit lines

will be aligned around the perimeter of the herit-

age site and buffer zone. The tram will be on the

ground level.

Some properties may be affected by the construc-

tion and may be acquired to give way for the pro-

ject. The State Government will study and identify

the affected lots and work closely with property

owners and tenants.

There will also be expansion to the airport’s main

terminal, training centre and multi-storey car park.

Penang will continue to enjoy toll-free access to

the highway and aims to improve the integration

of the existing and future infrastructure and

developments. Source : pgmasterplan.penang.gov.my

6

How did the property market perform?

Property prices in Penang remained stable despite

the drop of total value of transaction which rec-

orded at RM11,702 million in 2015 compared to

RM13,770 million in 2014, a decline of 15%.

In terms of the total volume of transactions, 2015

saw a drop of about 4,000 transactions compared

to 25,555 units recorded in 2014.

Chart 1 Total Value of property transactions in

Penang

Chart 2 Total volume of property transactions in

Penang

Source : HB Research/JPPH

The residential market continued to be the most

active sub-sector during 2015 capturing 71% of

the total volume of property transactions, an

increase from 68% registered in 2014. The

commercial sub-sector increased to 10%

compared to 8% last year and the development

land remained status quo at 7%.

The total value of property transactions in the

residential sub-sector in 2015 registered lower at

RM6,173 million, an 18.55% drop compared to

RM7,579 million in 2014 while the development

land sector also saw a decline in value from

RM2,752 million in 2014 to RM1,941 million in

2015. The commercial sub-sector however saw a

slight increase to RM2,070 million in 2015 as op-

Chart 3 Volume of property transactions as at

Q4 2015

Chart 4 Value of property transactions as at

Q4 2015





7

Chart 7 Existing and Supply of Residential Property on Penang Island as at Q2 2016





Penang Island has an existing residential supply of

217,467 units which comprises 42,781 units of

landed houses and 174,686 units of stratified

properties. The future supply of landed and strati-

fied properties recorded at 11,391 units and

55,445 units respectively.

-21%

-21%

-16%

-15% 40%

5%

52%

Value

Volume

Declined in volume and value of transac-tions in 2015

Chart 5 Penang’s overall volume and value of residential transactions as at 2015

5%

From the Chart above, we can see that in sum-

mary, the volume of residential transactions shot

up 52% in 2011 and subsequently declined 21%

in 2012 and another 21% drop in 2013. The vol-

ume dropped 16% in 2015.

Similarly in 2011, the value hiked up 40%,

dropped slightly and increased very marginally of

5% in 2013 and hiked further in 2014. Subse-

quently, 2015 saw a drop of 15% in value.

0

100,000

200,000

300,000

400,000

500,000

600,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

[RM

]

Price per unit

Chart 6 Overall Property Transaction Per Unit

Our research revealed that the CAGR for

property transaction per unit from 2006 to

2015 is about 8.4%.

Note : CAGR is a measure of growth rate over

multiple time periods.



8

Residential sector is still the best

performing market

Penang’s residential market is one of the most

active market in Malaysia. Penang is amongst the

top 5 areas with the highest average house prices

after Kuala Lumpur, Selangor, Sabah and Sarawak.




Chart 8 Average House Price in Malaysia as at

2015

In 2011, the volume of residential transactions

went up 40% to 30,674 units but subsequently

declined to 15,291 units in 2015. This was

attributed to the softening of the property mar-

ket beginning 2014 as a result of the various

factors including slowdown in the sales of new

launches, bleak household sentiments and low

consumer confidence.

Value of residential transactions was stable

throughout the last four years but declined 19%

in 2015.

The outcome of our research unveil that the

overall CAGR for residential properties are

about 9.6%.

Property Price Category (RM) CAGR from 2006 to 2015

Below 500,000 -4%

500,000 to 1,000,000 14.7%

Above 1,000,000 21.3%

Source : HB Research

This result showed that capital appreciation

performed better for property prices between

RM500,000 to RM1,000,000 as well as RM1,000,000

and above which transacted at even higher prices

when ownership changes.

Terraced houses has the highest growth rate

Chart 9 Penang State - House Price by Type from

1999 to 2015

Terraced houses recorded a CAGR of 6.9% while

CAGR for high-rise was 6.5%. The growth rate of

detached houses performed better at 3.7% while

semi-detached houses at 3.4%.

Source : HB Research

It is interesting to note further that we have also

analyzed the CAGR for each category of prices

tabulated as follows :

9

Which category of house prices have the

most supply?

As at Q2 2016, Penang State has a total existing

residential stock of 402,494 units comprising

217,467 units on Penang Island and 185,027

units in Seberang Perai.

The planned supply was recorded at 52,854 units

with almost 38% located on Penang Island and

remaining 62% in Seberang Perai. Incoming

supply was registered at 88,072 units with

46,686 units and 41,386 units located on Penang

Island and Seberang Perai respectively.

About 48% of the total existing residential stock

is priced below RM250,000 followed by 29% with

prices between RM250,001 and RM500,000 and

16% with prices between RM500,001 and

RM1,000,000. Only 7% of the existing houses is

priced above RM1,000,000.




30% flexibility ruling allows anyone to

buy affordable housing unit.

Penang State Government’s initiative to provide

a “roof under one’s head” is commendable with

constant review of updating the criteria to qualify

for purchase of affordable housing.

For affordable housing applications, the applicant

and spouse must not own any property in any

state in Malaysia. However, a person who al-

ready owns a property can also purchase a unit

of affordable housing provided the market value

is higher than the existing property that he al-

ready owned.

The State had also applied flexibility by releasing

30% of the total affordable housing units to Pe-

nang-born buyers regardless of whether one had

already owned a property. Nevertheless, for non-

Penang-born buyers who are under the talented

and skilled category, applicant must undertake to

reside in Penang for a minimum of 5 years from

the date of handover of keys.

Areas Existing

stock

Incoming supply

Planned supply

Penang Island

217,467 46,686 20,025

Seberang Perai

185,027 41,386 32,829

Penang State

402,494 88,072 52,854

Table 2 : Summary of

existing stock, incoming

supply and planned

supply as at Q2 2016

10




Type of Housing Price Range Total household Income

Affordable Housing RM300,001 to RM400,000 RM10,000

Affordable Housing RM200,001 to RM300,000 RM8,000

Affordable Housing RM200,000 and below RM6,000

Low medium cost RM72,500 and below RM3,500

Low cost RM42,000 and below RM2,500

In addition to the Shared-Ownership Scheme

(where the State funds 30% interest-free), Pe-

nang had also introduced Rent-to-Own scheme

in 2014 to help buyers who cannot afford buy-

ing their first home. This scheme allows the

buyers to rent their home at only RM100 per

month for 15 years with service charge at

RM15 per month. In addition, each unit will al-

so be equipped with household items.

The ongoing affordable housing developments

undertaken by private developers on Penang

Island are as follows:

Tri-Pinnacle by Aspen Group

Ramah Pavilion by M Summit Group

One Foresta by Ideal Property Group

I-Santorini by Ideal Property Group

Granito by BSG Group

Table 3 Affordable Housing Price Category

Demand for office space is stable

The demand for office market in Penang is gen-

erally stable. However, there is a lack of suitable

Grade A or even Grade B office buildings in Pe-

nang. Typically Grade A specification includes

office buildings which are brand new or have re-

cently been redeveloped or thoroughly been re-

furbished within the last 15 years. It must also be

highly visible, although may not be significant.

The supply of office space as at Q2 2016 in Pe-

nang recorded at 8.8 million sq. ft. of which 7.2

million sq. ft. is on Penang Island and 1.6 million

sq. ft. in Seberang Perai.

On Penang Island, George Town has the largest

supply of office space with a total of 5.7 million

sq. ft. followed by Bayan Baru/Sg. Nibong/

Gelugor with 0.9 million sq. ft. of space. The

remaining 0.6 million sq. ft. of space is located at

Green Lane, Jelutong and Tanjung Tokong.

The monthly rentals of prime office space on Pe-

nang Island are between RM3 to RM4 per sq. ft.

depending on the exact location, size and

facilities provided.

11

Chart 11 Cumulative Supply of Retail Spaces on Penang Island as at Q2 2016


Opportunities despite weak sentiments.. Research Report @ Q2 2016. For internal circulation only



A total of 11 malls with 7.6 million sq. ft. of

retail space is expected to be completed in the

next 5 years.

Occupancy rates stood at about 85% and 50%

on Penang Island and in Seberang Perai

respectively in 2015.

Generally, retail market in Penang has seen a

drop in consumer spending affected by the

overall economy, weakening Ringgit and the ris-

ing inflation. The weakening Ringgit should how-

ever attract foreign tourists to spend more.

Food & Beverage sub-sector seems to be per-

forming better as more innovative cafes and

modern restaurants open its door to the public.

Monthly rentals of retail space on the ground

and lower ground floors of prime malls on

Penang Island are presently recorded between

RM20 and RM40 per sq. ft. while upper floors

are recorded at between RM10 and RM18 per

sq. ft. depending on the exact location and size

of the retail outlets.

Chart 10 Existing & future supply of office

spaces on Penang Island as at Q2 2016

Retail market worsen?

There is only a marginal increase of retail space

in shopping complexes on Penang Island in Q2

2016. There is no new supply completed in

Seberang Perai. The total retail space recorded

at 11.42 million sq. ft. on Penang Island and at

6.9 million sq. ft. in Seberang Perai.

12



Cop-

Industrial market remain stable

There is an existing 1,490 industrial units on

Penang Island comprising 855 units located at the

South-West District and 635 units at the North-

East District.

Future supply of industrial units at the South-

West and North-East District recorded at 72 units

and 68 units respectively.

The services and manufacturing contributes al-

most equally to Penang’s GDP at over 48%. Pe-

nang’s largest trading partners are US, Japan and

Singapore.

In Malaysia, Penang leads in the areas of shared

services outsourcing (SSO), medical tourism and

medical devices. According to Malaysian Invest-

ment Development Authority (MIDA), Penang

contributed nearly 20% of Malaysia’s overall

Foreign Direct Investment (FDI) inflows in 2015,

the highest among Malaysian states.

There will be more than 3,000 jobs cut when

Seagate Technology and Western Digital Corpo-

ration leave Penang for Thailand beginning

August 2016. Amid the bad news, the good news

shine through recently when Bosch, a leading

global supplier of technology and services an-

nounced that it will be investing RM140M to

re-model its multimedia plant in Bayan Lepas,

Penang.

Chart 12 Existing & future supply of industrial

properties on Penang Island as at Q2 2016

With the signing of the Trans-Pacific Partnership

Agreement (TPPA) which involves 12-Pacific Rim

countries including Malaysia, Penang will contin-

ue to receive large amount of FDIs. As Penang

is export-oriented, the TPPA is expected to ben-

efit larger international corporations while

smaller companies will face stiffer competition.

The TPPA will also have an impact on the rise of

imports from the members of the TPPA.

It is also worth-noted that more investment in-

terest, particularly from Singapore will generate

more opportunities for properties and tourism

related businesses. On Medical Tourism, the

cost of importing “state-of-the-art” technology

would propel Penang to become a high-tech

medical city.

Source : HB Research/Penang Institute

13

Drop in tourists arrival to Penang

Penang continues to attract local and international

tourists as a result of exceeding tourists’ general

expectation in terms of services, food, hotels, ac-

cessibility and interesting festivals that were regu-

larly held in George Town.

According to Penang Institute, the international

tourists arrival at Penang International Airport in

2015 was 683,897, a decrease of 4.71% compared

to 717,724 in 2014.

Chart 13 International visitors to Penang accord-

ing to countries




tourist from China as a result of the drop of 7.37% in

the arrival of Chinese tourists in 2015 compared to

2014. It was also meant to strengthen bilateral ties

with China after the incident of MH370.

In 2015, there was a total of 6,347,618 number of

local and foreigners hotel guests which comprised

3,467,719 and 2,879,899 respectively. This saw a

drop of 7.3% from 6,847,569 number of hotel

guests recorded in 2014.

Chart 14 Registered Hotel Guests for Locals &

Foreigners on Penang Island from 2005 to 2015

The largest number of tourists was from Indonesia

(268,892) followed by Singapore (144,581) while

China (62,215) was the third contributor to the in-

ternational tourists arrival. 2015 saw a drop of the

number of tourists from all countries compared to

2014. The extension of visa fee waiver until Decem-

ber 2016 was hoped to increase the number of


0 50,000 100,000 150,000 200,000 250,000 300,000

Indonesia

Singapore

China

Japan

Australia

Taiwan

USA

UK

Thailand

Germany

TOTAL 2014

TOTAL 2015


-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Millio

n

MALAYSIANS

14

Hotel rooms continue to be in demand

The average hotel occupancy rate hovers around

65%. During low period, the rate could drop to 35%

while at peak season, hotels reported occupancy

rate to be up to 85%. City hotel usually performed

better than beach hotels.

Despite the opening of new hotels in Penang such

as St Giles Wembley (415 rooms), Olive Tree (250

rooms), G Kelawei (208 rooms), Citi Express (234

rooms) and other boutique hotels in 2015, there is

still a low supply of hotel rooms in Penang.

New hotels expected opening in 2016 :

Double Tree Resorts (318 rooms)

The Jazz Hotel (226 rooms)

OZO George Town by Thailand-based ONYX

Hospitality Group (132 rooms)

The Rice Miller Hotel & Godowns (67 rooms)

Vouk Suites @ Mansion One (48 rooms)

The number of boutique hotels boomed during the

last few years and have now become steadier.




St Giles Wembley

Pre-war heritage properties continue to

attract investors

Penang’s prewar properties remain the favorite

property investment portfolio with the local and

foreign investors alike. Its unique old charm archi-

tectural heritage with eastern and western influ-

ence continues to attract property investors, par-

ticularly from Singapore.

Since 1980, prewar property prices shot up to as

high as RM2,800 per sq. ft.

There are only 54 units of prewar property transac-

tion as at Q2 2016 with the highest recorded at

RM2,277 per sq. ft.

Some of the recent transactions of prewar proper-

ties in George Town city in 2015 are as follows :

Source : JPPH

Streets Price (RM) Price Per Sq. Ft.

Love Lane 1,766,000 1,632

Love Lane 4,000,000 2,277

Jalan Muntri 3,000,000 1,685

King Street 2,000,000 2,105

King Street 2,000,000 1,961

Carnarvon 2,000,000 1,090

Lebuh Melayu 2,200,000 1,185

15

Value of prewar heritage properties

remain stable

2015 saw a slight decline in prewar property

transactions to 150 units compared to 176 units

in 2014.

Chart 15 Transactions of Prewar Properties

on Penang Island from 1987 to Q2 2016



Chart 16 Price Index of prewar Properties on

Penang Island from 1980 to Q2 2016



Prewar property prices recorded an increase to

ten-folds after 15 years. Based on our price anal-

ysis from 2000 to 2015, the CARG was 16.6%.

Recently, Penang government has announced its

plan to introduce a rent control policy

involving prewar buildings due to the extensive

hike in rentals of certain prewar buildings in

George Town city.

It is mulling to cap rental hikes to 20% over a

period of four to five years and will be imposed

on buildings built before Second World War or

before 1948. This measure is to preserve the

living heritage culture while reducing further

gentrification.

Performance Indicator for all sectors

Residential

Office Space

Retail

Hotel

Industrial

Prewar Heritage

Land

16



What is the Penang Real Estate Market

Outlook for 2016?

The real estate market outlook seems rather

uncertain.

Weak market sentiment in primary &

secondary market are expected to gain

momentum leading to poorer performance

this year.

Better quality lending policies have resulted

in higher loan rejections.

The volume of transactions are expected to

decline further.

However, demand is still strong for project

with catalytic components such as well-

planned business and transit-oriented

developments that provide connectivity and

easy accessibility.

Bank Negara’s recent cut in the OPR

resulted in the lowered interest rate will

help reduce the loan burden for businesses

and consumers.

Prevailing buyers’ market have influenced

sellers to accept more reasonable prices.

Fewer speculative activities.

Buyers have more choices due to the

increased supply of secondary properties for

sale.

More emphasis on affordable housing.

Investors and home buyers are careful

in their selection of properties.

Properties at the right location in well-

connected areas with good

infrastructure and public transports are

the factors influencing their property

purchases.

Buyers are also more selective and feel

more comfortable buying from develop-

ers with good track records.

Developers are offering good

incentives and special sales packages to

attract potential buyers.

Young Malaysian workforce will

underpin demand for property

purchases.

Healthy fundamentals due to Penang

diaspora, young population

demographics, shrinking average house-

hold size, low unemployment rate, sus-

tainable local & foreign investments will

continue to support the local market.

17



TOP 10 TIPS ON PROPERTY INVESTMENT

IN PENANG

1. Choose a registered real estate agent

(REA) with license registered with the

Board of Valuers, Estate Agents and

Appraisers Malaysia (BOVEA). To

search for REA :

http:www.lppeh.gov.my/

2. Select a registered real estate negotia-

tor (REN) from the REA that you have

appointed. A REN holds an identifica-

tion card which is registered with BO-

VEA. Only a registered REN can deal

in property transactions. To search for

REN : http://www.lppeh.gov.my/

3. Select a property that suits your needs

at the right location

4. Find out about any proposed develop-

ment planning around the subject

property

5. Seek independent advice from a repu-

table registered valuer on the market

value of the property.

6. Do an investment appraisal to assess

the returns and risk prior to making

decision.

7. Leave the price negotiation to the REN

as he or she has the experience in

sales closing.

8. Pick the right type of loan for your

type of investment. Discuss with your

banker for advice.

9. Appoint a registered property

manager to manage your property if

your intention is to buy-to-let. A prop-

erty manager must be registered with

BOVEA.

10. Appoint an established solicitor to

prepare the legal documents.

Costs of buying a property

Stamp duty

Legal fees

Disbursement fees

Search fees

State consent, if any

State levy, if any

Real Estate Agent’s fee, if any*

Costs of selling a property

Real Estate Agent’s fee, if any*

Advertising costs

Legal fees

18




KUALA LUMPUR (July 27): Escalating housing prices and the changing needs of young buyers have spurred interest in shoebox-sized apartments on Penang island, said Henry Butcher Malaysia (Penang) Sdn Bhd director Jason Teoh.

"Currently, there is no supply of shoebox-sized apartments in the (Penang) market, but I observe that shoebox-sized apartments with facilities will have strong demand from young working adults who are looking for homes offering a modern lifestyle," he told TheEdgeProperty.com after sharing his outlook of the northern region of Peninsular Malaysia.

He noted that although land scarcity will be an issue for new develop-ments in George Town, Penang, there are opportunities for developers to look into, such as redeveloping existing old buildings or old houses into shoebox apartments to cater for the needs of young homebuyers.

On the overall market view, Teoh said developers in Penang have always been confronted with various challenges in the overall supply chain, such as lack of suitable land for development. There are fewer new launches in recent times and pent-up demand seems to be broiling.

"Developers with projects in the right locations with the right concept and prices will attract buyers despite the weak market sentiment," he added.

A good example of a recent well-received residential project in the southwest district of Penang island has seen a remark-able take-up rate of 80% without any aggressive marketing campaign.

However, he noted that the outlook on Penang’s property market remains uncertain if economic and market sentiment continue to be weak, hence, transaction volume is expected to decline and there will be fewer speculative activities.

"In the long run, Penang’s property market will be supported by healthy fundamentals — such as the growing young pop-ulation, shrinking average household sizes, low unemployment rate and sustainable local/foreign investment — which could help regain market confidence," he explained.

Teoh said Penang island is a small place, and being small has its advantages in terms of the density of economic agglom-eration.

"Given that infrastructure development is now in the making, greater connectivity between places and people and, more importantly, between people and people would augur well for the future of Penang," he noted.

Teoh said the Penang Transport Master Plan, which includes construction of the monorail, bus rapid transit (BRT), high-ways and roads, undersea tunnel and sky cab, is now pending the consent of the authorities.

Once the plan is approved, it will be the greatest catalyst for the property market in the northern region.

He was speaking at the Malaysian Property Summit Mid-Year Review 2016. TheEdgeProperty.com and The Edge Malaysia are the media partners of this event. Source : TheEdgeProperty.com | July 27, 2016

Shoebox units to kick off in Penang?

http://www.theedgeproperty.com/my/penang/georgetown

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