Kuala Lumpur and Penang-based developers will develop RM4.56bil worth of residential and commercial projects in Penang this year amid a challenging environment where the domestic property market is expected to soften.
About RM1.86bil worth of residential and commercial projects are being planned in the mainland – Seberang Prai – while the remaining RM2.7bil will be launched on the island.
The island, however, is seeing fewer residential property launches due to the growing shortage of land, higher land cost and a challenging property market environment. This is despite the gross development value (GDV) of projects launched on the island this year being higher.
Developers set to launch new projects include IJM Land Bhd (GDV of RM538.5mil), Mah Sing Group Bhd (RM280mil), DNP Land Sdn Bhd (RM800mil), Wing Tai Malaysia Bhd’s subsidiary Ideal United Bintang (RM935mil), Tambun Indah Land Bhd (RM616mil), Sunway Bhd (RM290mil), S P Setia Bhd (RM300mil), and Eastern & Oriental Bhd (RM800mil).
In Seberang Prai, among the bigger projects planned so far are DNP Land’s RM250mil BM Mahkota, the RM550mil Jesselton Hills scheme in Bukit Mertajam and Tambun Indah Land’s RM616mil worth of landed property launches in Bukit Mertajam and Pearl City in Simpang Ampat, South Seberang Prai.
On the island, Ideal United Bintang has planned the most number of projects for launch this year.
The group is launching about RM935mil of residential projects in the south-west district, which include mixed-development projects such as the RM265mil Solaria and the RM220mil Ideal Vision Park second phase, and the RM450mil Imperial Residences second phase.
Seberang Prai is drawing the attention of developers due to plans to develop a RM200mil premium retail outlet known as Penang Designer Village and an integrated shopping mall, which will be anchored by an IKEA store.
The entire project is located in Batu Kawan, which is the landing point of the newly-opened second bridge.
Sarawak-based PE Land Sdn Bhd will develop The Penang Designer Village, while the integrated shopping mall with residential components will be developed by Aspen-Ikano.
The recently opened 24-km second bridge connecting Batu Maung on the island and Batu Kawan in South Seberang Prai has also boosted property prices in the surrounding areas on both ends of the bridge.
The volume of property transactions in Seberang Prai is expected to soften this year, due largely to the difficulty in obtaining housing loans.
Henry Butcher Seberang Prai associate director Fook Tone Huat said in an interview that there would definitely be fewer transactions this year, compared with about 12,000 registered for 2013.
“Since January, we can see fewer enquiries for primary and secondary market properties, as the rejection rate of housing loans is currently hovering at about 60%.
“Property prices are expected to remain more or less the same as last year,” Fook said.
Raine & Horne Malaysia director Michael Geh said property prices would soften this year, unless Bank Negara changed its housing loan policies.
“There will definitely be a dip in the volume of transactions, due to the stringent loan conditions,” he said.
To be noted is that since the announcement of the second link in 2007, land prices in areas leading to the bridge in Penang and Seberang Perai have risen significantly.
In Seberang Prai, Fook said vacant land prices were now hovering around RM40-RM50 per sq ft, compared with RM8-RM9 per sq ft before the announcement.
“Landed properties such as double-storey terraced houses are now priced between RM350,000 and RM400,000, compared with RM150,000 and RM200,000 prior to the announcement of the second bridge,” Fook said.
