I read an article in TMI quoting REHDA (Penang), Dato Jerry Chan as saying that prices of land in Penang is still rising and the latest one being RM1,200 psf which was the state government’s land swap deal with Consortium Zenith BUCG which is building the mega RM6.3 billion undersea tunnel and three highways. RM1,200 psf is a record high in Penang. This would meant that the new land deals are not going to go lower but would continue to edge up.
His deputy, Mr. Toh of IJM said that there are a few reasons why property prices in Penang will go up despite the new levy. This is because landowners will continue to ask for higher prices while the costs of construction has also gone up 40-50% for the past few years following inflation. besides that, within past five years, developers are continuing to pay ever higher compliance costs such as RM120,000 in lieu instead of building low cost units, and even car park is now RM35,000 instead of RM15,00 previously.
Personally, I hope that the prices are much more moderate. Secondly, a huge number of affordable housing continue to be built. There are some signs that the prices are slowing down. Especially if we look at the recent launches, in certain parts of Penang, it’s coming back down to RM450 psf. For example, Relau. There are also developer’s new projects which are no longer selling as fast as they hoped. I seriously feel that the market needs to consolidate for a while. Demand is there but perhaps the prices has gone way too much from it’s supposed fundamentals. What’s the price psf I hope for? That’s hard to answer because Penangites have their favourite spots. As for migrants like me, I like newer places which a lot of Penangites shun. Haha.
Written on 10th Dec 2013.
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