Penang Property Focus: Hotspots in Penang

Despite being the second-smallest state in Malaysia after Perlis, Penang boasts the highest population density in the country. It is home to about 2,500 people per sq km on the island and about 1,000 people per sq km on the mainland.

When presenting The Edge/Raine & Horne International Zaki+Parners Penang Housing Property Monitor for 4Q2009 (the article appeared in City & Country, Issue 793, Feb 15 to 21, 2010), Mike Geh, director of Raine & Horne International Zaki+Partners (Penang), noted that the number of transactions for residential properties in Penang increased 5.4% y-o-y last year. More transactions took place in 4Q2009 than in the previous quarters combined, he said.

Geh believes that the confidence of property buyers in Penang remains shaky despite the improving economic recovery. As such, he predicts that there will not be an unexpected jump in transactions this year, although more first-time homeowners and those looking to upgrade their homes are expected to purchase properties this year.

Khor Boon Soo, executive director of KGV-Lambert Smith Hampton (Penang), believes that, as property investment is usually a long-term endeavour, this is a good time to buy and hold on to properties in Penang. Khor acknowledges that property prices on Penang Island have always been high, owing to the limited availability of land for development. “As such, property prices will continue to rise in tandem with economic growth. Experience has shown that investors who wait for prices to fall before entering the market often end up buying at much higher prices. Where the Penang property market is concerned, the sooner you enter it, the better.”

Which are the hot growth spots? Teluk Kumbar, Batu Maung, Bayan Lepas, Sungai Ara and Relau, say property consultants The Edge spoke to. In general, these areas stand to benefit from factors such as new infrastructure (for instance, the second Penang Bridge), the offering of modern and planned townships, as well as scarcity of quality development land on the island.

“The shortage of suitable development land on the island has pushed development southwards to previously undesirable areas such as Relau, Sungai Ara and Batu Maung,” Khor explains.

Batu Maung
Khor says this former fishing village on the island is seeing rapid development. It has largely been cleared of squatters for a large modern and high-end residential development. VPC Alliance (Penang) Sdn Bhd director Kelvin Tan says one of the two growth areas in Penang is southeast of the island, from the Penang bridge interchange down to Batu Maung.

altGiven its proximity to the proposed Second Link, Mah Sing’s 86.7-acre Southbay project in Batu Maung is another major development that will change the landscape of Penang Island, says Tan. The first phase, comprising three-storey link houses priced from RM967,000, has been taken up, he notes. However, some bumiputera units remain unsold, he adds.

Similarly, Chan Wai Seen, director of JS Valuers Research & Consultancy Sdn Bhd, adds that the Teluk Kumbar/Batu Maung areas can be high growth locations, owing to their proximity to the second Penang Bridge. At present, notes Chan, there are limited large and properly planned townships in the area.

While Batu Maung is separated from the main Bayan Baru township by the airport, Khor believes that it now benefits from the Sungai Nibong-Jelutong Coastal Expressway, which provides fast and convenient access to George Town and the inner city. Like Chan of JS Valuers Research & Consultancy, Khor points out that the second Penang Bridge, which will link Batu Maung to the mainland, will be a major contributor to its potential.

Sungai Ara/Relau and Teluk Kumbar/Bayan Lepas
Shawn Ong K B, vice-president of asset valuation at Henry Butcher Malaysia (Penang), favours areas such as Sungai Ara/Relau and Bayan Lepas/Teluk Kumbar. He observes that there is still plenty of land for future development. “Owing to the scarcity of land suitable for development within and on the fringes of George Town city over the past few years, many developers, such as Mah Sing have shifted their developments to the southern part of the island,” notes Ong.

The Sungai Ara/Relau area and the Bayan Lepas/Teluk Kumbar areas are also blessed with good infrastructure, notes Ong. “For example, they are near Bayan Lepas Airport, easily accessible via the Bayan Lepas Expressway, and close to all amenities, such as the existing Penang Bridge and future second Penang Bridge.”

The interchange will be connected to the Bayan Lepas Expressway and will be near Batu Maung/Bayan Lepas Industrial area, says Ong.

Ong points out that in these areas, a freehold double-storey terraced house would cost RM550,000 to RM650,000, while a leasehold one would cost RM300,000 to RM350,000. Meanwhile, a freehold double-storey semi-detached house is priced at RM700,000 to RM850,000, while a leasehold equivalent would cost RM400,000 to RM500,000. Freehold condominiums of 1,000 to 1,300 sq ft are priced from RM220,000 to RM350,000.

Simpang Ampat, Bukit Tambun
On the mainland, Khor of KGV-Lambert Smith Hampton (Penang) believes that the area around Simpang Ampat/Bukit Tambun/Valdor in the South District of Province Wellesley (Seberang Prai) shows great potential for high growth. Tan favours the Simpang Ampat-Tambun-Batu Kawan area. However, he notes that the developments are mainly carried out by local (mainland) developers, as opposed to developments on the island, which are carried out by KL developers.

Khor says the Simpang Ampat/Bukit Tambun/Valdor locality, which lies at the end of the second Penang Bridge, will benefit directly from the new accessibility afforded by the link. “As land and property prices on the island are much more expensive, developments will eventually spill over to the mainland,” he predicts.

This is an excerpt of an article that first appeared in the May 2010 issue of Personal Money

This article was written By Lim Siew May of The Edge Malaysia

Properties in Penang – A Lucrative Market For the Intelligent Investors

Many investors are investing in Penang properties. One year ago, when the economic crisis came to Penang’s shore, the property price did not drop at all – not even 5%. In fact, many investors start to pick up properties at a very good bargain. In order to sell their properties that are already under construction, most developers are giving out unbelievably great promotions. Instead of the 10% down-payment (booking fees) that buyers used to pay, they only need to pay a mere 5%. Not only that, legal fees, stamping duties and transfer fees are all borne by the developer! There properties have since appreciated 7% of the initial purchase price in only one year.

Why is Penang such a popular place for property investors? There is sufficient demand from the population and the developers are providing steady supply. The young entrepreneurs are learning to invest in properties to earn monthly rental income as well as for capital appreciation. Penang is an industrialized state; many young graduates from outstation who migrate to work here require a roof over their head. Some, who decides to settle down, will eventually buy their own property to start a family. When the family numbers increases, they will buy a bigger property to accommodate the additional numbers. The “old” property will either be rented out or sold at a profit.

Penang is also island. Land here is getting scarce. With the increasing demand, the property price here is sure to increase with time. The demand not only comes from the local dwellers. Foreigners are also investing in Penang properties. Foreigners consider it cheap to invest in Penang, when compared to countries like Shenzhen, Singapore, Hong Kong, Shanghai and Xiamen. The property prices in these countries are so much more expensive. These foreigners are composed of retirees who participate in the Malaysia My Second Home Programme (MM2H). They find the cost of living in Penang much lower compared to where they come from (Australia, Europe, Japan and Korea), the food is delicious, and the people here friendly and the medical facility here are also advanced.

To give you a taste of the potential rate of returns, I will tell you about some projects and the returns obtained in a certain time frame. Putra Place Condominium was sold at RM160,000 at Year 2005. A friend of mine sold his unit at RM350,000 in Oct 2009. That is a whopping 118% ROI in a mere 4 years. Another bought a condominium at N Park for RM185,000 recently and is renting it out at RM1,200 a month. This is a return of 7.7% annually.

This article was written by: Vivienne T

Developing A Business Plan For Your Real Estate Office – Important Things You Should Know

In order to have a successful real estate business you should have a plan. It’s advisable that this plan be written out. You could create this plan on your own or you may have experts assist you with it.

The fundamentals of a productive business plan possess one or more of the following elements:

Company Name: The name you decide on on your own should be very easy to remember and unique. In addition, it could be the name of a notable real estate company who you decide to take part in as a franchise operation.

Mission Statement: This section of your business plan outlines your purpose of your business and the way you will accomplish that purpose. If you have a clearer purpose for your business plan, there is a better chance that you will get a receiving money from a lending company.

Kind of Real Estate Business: You should know what type of real estate you’ll specialize in. For instance, several real estate agents will sell only residential houses while some will sell commercial or resort property. You could as well trade both, however, you would like to list 1 most important real estate specialty that would enable you to appear more focused when you apply for financing regarding your real estate venture.

Services Offered: You will need to define your responsibility in the real estate industry. For example, you may choose to just record homes or properties in a catalog and trade them on your own. Either that or you may do a commission off of listings that you sell for other people. Moreover you may be involved in helping people flip property for a huge profit. You have quite a bit of chance with regards to providing real estate services.

Financial Objectives: You will like to establish realistic financial goals for your business. This could include the number of amount of profits or sales you will like to make in the next few years. It can also contain expansion plans as well. Also a part of your financial objectives could be a budget plan as well. You would need to plan how much cash you would keep, how much cash you will invest, and how much money you would use for bills. In addition, you should need to understand how much you would wish to produce so that you can make income along with your current monthly or yearly profits.

Expenses: Your budget, that will be a part of the monetary section of your business plan, will include a list of expenses. Those expenditures incorporate start-up expenses such as office hire, name registration, licensing, and education. Maybe you would even like to get a small building where real estate ventures will take place. Other fees of running a real estate business comprise the price of communication, utilities, advertising, and office staff. You will need to see how much it would cost to run your real estate businesses and this is 1 of the primary sections of your written business plan.

Market Analysis: You have to carry out a research and find out what kinds of real estate are most marketable in your vicinity. You would also have to carry out market study to find out if a real estate business would even be viable in your town as well. Your market study could perhaps include online surveys if you intend to use the Internet to enlarge your territory.

Competitive Analysis: You must evaluate what you are promoting to competitors who give similar services. This would enable you to key in on aspects of business that your competitor has missed. Also, it will provide you with what you will be up against as you launch your new real estate venture.

You should include a summary of all of the above in your plan plus at least one page consisting each of these above sections. Your business plan needs to be as thorough as possible, describing each aspect of what services you would provide as a real estate agent.

You would also want to incorporate in your business plan how your real estate company differs from all the others. You should know what would make you exceptional and why others would want to come to you.

Furthermore, you will want to put on view your qualifications together with references of past customers if you have been in real estate for a while. If you’re just getting in progress in real estate now is the perfect time to start creating that plan-before you even start.

You can find valuable real estate info by way of the Internet to get you started. To start with, you can read other free content exactly like this one, which would help you.