Penang property seen slowing down due to high prices

“For landed developments, the option is to either pay increasingly high prices or move further away (from prime locations),” said Real Estate and Housing Developers Association Penang (Rehda) chairman Datuk Jerry Chan.

PETALING JAYA: Escalating prices of landed residential properties in Penang could see transactions slowing down in 2015.

According to Real Estate and Housing Developers Association Penang (Rehda) chairman Datuk Jerry Chan, prices of landed residential properties have been rising over the past few years.

“We don’t see highly motivated sellers yet. Land prices have been moving at a faster rate than their selling prices,” he said.

Chan added that land scarcity was also an issue.

“For landed developments, the option is to either pay increasingly high prices or move further away (from prime locations).”

According to CH Williams Talhar & Wong’s (WTW) in its 2015 Property Market report, prices of newly launched, landed residential properties in Penang continue to rise unabated to new benchmark levels.

It said older residential units in established and growing neighbourhoods, such as Greenlane, remained highly sought-after despite higher asking prices.

“The steep hike in prices is expected to taper off in the near future with more choices of new housing accommodation entering the market.”

According to the report, 985 units of landed residential came into the market last year in Penang Island.

“The construction and completion of the Second Penang Bridge has been a catalyst for new developments in the souther region of Penang Island.

“The existing supply in the Northeast district is slightly ahead of the southwest district (namely 51% of existing supplies in the northeast district and 49% in the southwest district).

WTW noted that the majority of landed residential developments have been focusing on the Seberang Perai area, due to the availability of lands with a comparatively lower land cost as compared to Penang Island.

“According to the National Property Information Centre, existing supply of landed residential was 141,599 units of which 104,804 units (74%) are in Seberang Perai and 36,795 units (26%) in Penang Island.

“With land size nearly triple that of Penang Island, Seberang Perai has abundant land but lacks extensive infrastructure and connectivity. 

Landed residential developments predominated in the past few years with high-rise residential making stronger inroads.”

WTW said cumulative supply of landed residential developments stood at 104,804 units, comprising mainly terraced houses.

“In 2014, low take up rates were observed for newly launched projects in Seberang Perai. 

The landed residential market appeared to be weakening as developers are having a hard time to push sales in order to clear the unsold units.

“However, the transaction activities regained its momentum in the second half of 2014.” 

Compared to the primary, WTW said the secondary market in Seberang Perai remained active, with an upward trend observed in the transaction values of the properties. - The Star