Property: Primary market sees strong sales in 3Q2009

Housing property sales were strong in the Penang primary market in 3Q2009, says Raine & Horne International Zaki + Partners’ director Michael Geh. Having mentioned earlier that there were apparent signs of a property bubble, specifically in the condominium market, Geh believes the recent announcement of a 5% real property gains tax (RPGT) from Jan 1, 2009, may cool things down a bit.

Attractive home ownership campaigns by various developers and aggressive marketing of home loan packages by banks over the past few months drew a good number of upgraders and first-time homebuyers. But these lured speculators as well.

“I noticed that 50% of the sales of certain properties launched recently were taken up by upgraders and first-time homebuyers while the remaining 50% was bought by bulk buyers who then quickly put these properties back on the market again,” Geh comments when presenting The Edge/Raine & Horne International Zaki + Partners Penang Housing Property Monitor for 3Q2009. Some of the speculators were asking for RM50,000 to RM100,000 more than the actual price, he says.

The imposition of a 5% RPGT may therefore help neutralise what Geh describes as a “highly speculative developer direct market” in Penang.

Geh: New high-end condominium developments offering larger unitsThe secondary market for the older properties, on the other hand, was rather quiet in 3Q2009. Secondary residential prices and rental rates remained flat during the period after hitting a plateau in 2Q2009 as homebuyers turned their attention to new launches. In fact, based on the data presented, house prices and rental rates in 3Q2009 in the areas surveyed had not budged since 2Q2009 except for 2-storey detached houses in Minden Heights, Tanjung Bungah and Tanjung Tokong.

Since the announcement of the 5% RPGT, there have been grumblings on the ground that investors/speculators are trying to clear their stock before year-end to avoid being taxed.
“This may bring the asking and selling prices of residential homes in Penang down from speculator-upped prices to market value,” Geh says.

The RPGT is a matter of concern for those who want to dispose of properties that are more than five years old, considering that Penang has a large number of pre-war shophouses that were largely inherited or bought over 20 years ago.

“Some of these houses could have been acquired at around RM100,000 two decades ago and prices would have appreciated to between RM350,000 and RM500,000 now. Currently, any disposal of a property held for more than five years is tax-free,” Geh says.

RPGT or not, Geh believes homebuyers and upgraders should consider making their buying decisions now while bank policies are liberal, with loans fairly easy to obtain, and the lending rates are low.

New launches
According to Geh, generally all properties launched in 3Q2009 saw high take-up rates of above 50%. Developer Belleview Group recently launched four residential projects in Penang — Bukit Dumar Residences in Bukit Dumbar, All Season Park in the heart of Farlim Township and apartments Melody Homes and Palmyra Residences. Bukit Dumbar Residences has 62 units of 3-storey terraced and semi-detached homes in total, priced from RM930,000 to RM1.5 million. These are within walking distance of a Tesco hypermarket.

All Season Park consists of four blocks of 30-storey apartments that are priced from RM180,000 each and have built-ups ranging from 850 to 2,000 sq ft. Belleview Group’s third development, launched and located next to All Season Park, is Melody Homes, whose apartments have built-ups of 700 to 750 sq ft and are priced from RM150,000 to RM180,000. The group’s Palmyra Residences comprises 227 units of 2-storey terraced homes and semidees priced from RM373,000.

Aside from Belleview, former architectural and interior design consultancy BSK Concept Zone launched Pinang Village in Balik Pulai, which consists of 51 units of terraced houses and 20 semidees priced from RM388,888.

Palmex Industries Sdn Bhd, a subsidiary of IOI Group, launched Rain Tree Garden, which comprises 2-storey semidees, in Sungai Ara. Geh says the response to these properties, with built-ups of 3,850 sq ft and tagged from RM700,000, has been overwhelming. “There are only three units left,” he says.

Developer DNP Land recently launched its residential project Sentral Green in Relau, adjacent to a 1.6-acre rejuvenation park. The nearly five-acre development consists of 52 units of 3-storey terraced houses and two semidees, priced from RM848,000.

Geh says smaller developments, such as Celesta Garden by Singapore developer Centrepoint Tiara in Jelutong town, were also launched in 3Q2009. Celesta Garden comprises 3-storey terraced houses with built-ups of 3,300 to 3,600 sq ft and priced from RM868,000.

Lip Sin Co Sdn Bhd too recently launched two projects in Taman Iping in Batu Maung, called Taman Sri Mewah Jaya and Taman Sri Mewah Jelita. These came in the wake of its successful launch of Taman Sri Mewah Indah Phase II, which consists of 30 units of 2-storey terraced houses, 12 units of 2-storey semidees and two bungalows.

Geh says an interesting project to look out for in 4Q2009 is the one on Gurney Drive. Its units are large, with built-ups of 10,000 sq ft, inclusive of individual swimming pools. These units, available for exclusive preview, are to be priced from RM3 million.

Geh also notes a significant trend in the high-end condominium market in Penang — newer developments are offering larger units — 3,000 to 4,000 sq ft compared with the conventional 1,400 sq ft.

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 779, Nov 2-8, 2009


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