TO say that the opening of the Second Penang Bridge has injected new life into the real estate potential of Seberang Perai is an understatement.
While the ordinary property investor is still debating to what extent the area’s prospects will be boosted by the enhanced accessibility, Seberang Perai has been on the radar of astute property developers since the second bridge project was announced back in 2006.
Naturally, interest from developers grew when work started, and it intensified with the completion of the bridge coupled with indications of the Penang government’s commitment to develop the mainland. The bridge, spanning 24km and costing RM4.5 billion, was opened to the public on March 1.
As it stands now, the landscape in the mainland is a far cry from the hustle and bustle of Penang island. A good portion of it is covered in plantations and vegetation, reminiscent of how a stretch of Jalan Damansara in Kuala Lumpur — between Bandar Utama and the junction with Jalan Kepong — used to be like in the early 1980s. A recent trip to the mainland shows that the area is still primarily agricultural, even in Batu Kawan, where one end of the second bridge sits.
Meanwhile, established and high-profile developers based outside Penang have been flocking to the mainland. So, one can expect the unveiling of interesting and creative development concepts that will spice up the market there.
Generally speaking, land prices in the mainland, although they have moved up in recent years, can still be cheaper by more than half that on the island. This would make homes in the mainland a lot more affordable and attractive, thanks to the second bridge.
Those who cannot afford to own a home on the island can now look at the mainland as an alternative. At the same time, property owners on the island looking to cash out can relocate to the mainland with a hefty bank balance to boot.
However, not everyone on the island would be willing to make the mainland their home despite the enhanced accessibility.
The appeal of the island — apart from having all the amenities city dwellers would want — lies in a unique blend of heritage, art and culture, and food. The island’s attractions have been drawing tourists in increasing numbers, both from within and outside the country, especially in recent years. Many KLites are known to own weekend homes on the island.
On the part of the state government, efforts to promote Penang island are ongoing, such as featuring Penang in a popular Chinese serials screened on Astro Wah Lai Toi.
A growing expatriate community and rising tourist arrivals, meanwhile, have led to the mushrooming of boutique hotels, quaint cafes and eateries. Some of these have, in turn, become attractions on their own.
Will such activities migrate to the mainland to take advantage of the significantly cheaper real estate costs? I don’t think so.
Here’s why. Interestingly, the value of an address is tied to how sexy it is deemed to be. A loose measure of that would be how popular the preferred address is. The location factor is important as are accessibility, amenities and the profile of residents.
Take Damansara Utama in Selangor. For a very long time, real estate values in the development remained inferior to those of its neighbour Bandar Utama, just beside it, and Taman Tun Dr Ismail, located across the road.
It has only been in the last 10 years or so, thanks to a surge in demand for landed homes, that prices in Damansara Utama have managed to narrow the gap with those of its neighbouring developments.
Property prices on Penang island, which is more established in the eyes of investors, will stay ahead of prices in the mainland. Considering the development game plan unveiled thus far by the state government, one can expect more excitement on the real estate scene, both on the island as well as the mainland.
Au Foong Yee is managing director of The Edge Communications Sdn Bhd
This article first appeared in The Edge Malaysia Weekly, on April 21 - 27, 2014.
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