Penang affordable homes? RM300,000 – RM650,000 lah

First of all, I always think Penang property market is a resilient one. It’s prices seldom fall once it goes up. I am not sure why, maybe it’s just a plain fact that Penangites are rich. I am not a Penangite. 🙂  Anyway, it was reported that Penang would soon have affordable properties worth up to RM4.7 billion entering the market within the next three years. When I read further, it was stated that the pricing was between RM300,000 – RM650,000 depending on the area and the sizes ranges from 850sf to 1,000sf. In other words, RM650psf or maybe even higher? Is it still affordable? My personal opinion is that RM600,000 and below is still quite affordable. Anything higher would be a little tougher but fortunately, RM650,000 is the highest point. According to Raine & Horne director Michael Geh, the pricing was in response to the current slowdown in the property market especially due to the high rejection rate for housing loans.
The developers for these units? They include Eastern & Oriental Bhd (E&O), Boon Siew Group (BSG), Tambun Indah Land Bhd and Ideal Property Group. A few of these names are more well known for their high-end projects in my personal knowledge but no harm. After all, many of the top 10 developers these days are also signalling their intention to go into affordable homes since there is an oversupply of the luxury ones. An interesting one would be E&O’s Tamarind high-rise project within it’s Seri Tanjung Pinang in Tanjung Tokong. I am very interested to know how competitive can the prices be for these units. Today, any of it’s existing condos there are RM1,100 per sf or higher and the buyers are normally the high net worth individuals. I think many are not staying there. 🙂
Meanwhile, there would also be some affordable units in the Batu Ferringhi area by Ivory Properties. The project is catered to newly weds and young adults. For this Batu Ferringhi one, it has to be more competitively priced compared to the Tanjung Tokong one because of the location. It may not that conducive if the couples are working in Bayan Lepas and has to travel from Batu Ferringhi to their working place every morning, especially with the ever increasing jams in the Tanjung Tokong area. Of course, the jams are still quite manageable except when there are accidents.
These days, affordable homes would be the flavour of the day. In fact when we look at the luxury units which are not lit in many of the projects in Penang, we should understand that the oversupply of such units are not just in Penang but also in Klang Valley and even more so in Iskandar. Note: Oversupply is not related to property bubble bursting. Oversupply simply meant that there are more units than there are demand. For property bubble to burst, the owners of these units must be desperate or the buyers in the whole market simply could not afford the units since there are the only ones available. Current situation is far from it. Within the secondary market and for older units, there are still many affordable ones. Thus, for the affordable homes, unless there’s a world crisis there’s no way it will fall suddenly. RM300,000 for a 850sf unit, if market is really bad, would it fall to RM200,000? Haha. I think if it does, the developer would just stop building and use the land to plant durian trees instead. Just kidding but RM200,000 would be too low to proceed. Happy queuing for these affordable units when they are launched next year.
written on 2 Dec 2014
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