The edge | Nawawi Tie Leung Property Consultants Penang Housing Property Monitor (1Q2022): moderate performance in the secondary market

According to Saleha Yusoff, Executive Director and Regional Head of Research and Consulting at Nawawi Tie Leung Property Consultants Sdn Bhd, Penang’s overall secondary market – whether on the island or on the mainland – has not completely recovered.

She says most of the residential properties analyzed saw no quarter-on-quarter (qoq) price growth, with the exception of 2-story semi-detached houses in Sungai Ara.

“From one year to the next, the prices of certain developments such as the 1 floor [terraced houses] in Jelutong, Sungai Dua and Sungai Ara continued to decline by 6% to 8%. Price on the island for 1 floor [terraced houses] remained unchanged, ranging from RM520,000 to RM850,000 per unit,” Saleha says during the presentation The edge | Nawawi Tie Leung Penang Housing Property Monitor 1Q2022.

Most one-story townhouses on the island are older, and their sellers have kept prices down, which are almost on par with newer high-rise units, she says. She adds that the average price of one-storey townhouses on the mainland was at pre-pandemic levels, ranging from RM180,000 to RM220,000 per unit, due to owner-occupier demand.

Mixed performance

For 2-storey townhouses, the average price in Pulau Tikus and Sungai Nibong saw a year-on-year decline of 7% and 13% respectively. She observes that these are over 20-year-old residential projects in George Town, and that the houses have small porches, which limits the possibilities for expansion and renovation.

Their average prices increased from RM1.15-1.6m in 2019 to between RM1-1.3m in 1Q2022. Prices on the mainland remained unchanged on a quarterly and annual basis.

For 2-storey semi-detached houses, the average price in Sungai Ara increased by 4% quarterly and annually, while the average price in other locations remained unchanged. Prices ranged from RM900,000 to RM1.3 million per unit, depending on the location and age of the building. Mainland prices remained stable at pre-pandemic levels, averaging RM290,000 to RM350,000 per unit.

According to Saleha, the average price of detached houses – which are usually bought for the buyer’s own use – has remained stable since 2016, ranging from RM3.5 million to RM5.1 million. “The average price of standard 3-bedroom apartments and apartments/condominiums remained unchanged.”

She notes that rents and yields have remained stable. “We expect secondary market prices on the island, especially for older programs, to remain at current levels due to competition from newly launched projects priced between RM400,000 and RM600,000. RM. The new developments offer modern facilities, various designs and layouts, as well as security. »

Penang Property Market

According to the latest data from the National Property Information Center (Napic), Penang ranked No. 3 in 2021 in terms of total overhang units, which stood at 5,493 and was worth 3.56 billion. RM.

As 71% of overhang units in Penang are condominiums and apartments, and with more high-rise units being developed on the island, 80% of overhang properties are on the island, explains Saleha.

She notes that the Penang property market recovered in 1Q2022, recording the highest transaction volume and value in the past five years. The volume and value of transactions increased by 16.3% and 30.2% respectively compared to 2020.

According to Napic’s 2021 Real Estate Market Report, secondary market transactions/sub-sales contributed about 80% in the residential subsector, compared to about 20% of primary market transactions/developer sales, explains Saleha.

“The secondary market continues to be more active than the primary market as most new launches are priced at RM500,000 and above, while the majority of trades are priced below RM500,000. We also note that for new launches, developers are reducing discounts as building material and labor costs have increased,” she adds.

In terms of rental yield, Saleha says smaller serviced apartments in good locations will fetch a better return than larger condominiums with higher maintenance costs. “As a result, most new launches now offer smaller units with lower initial capital, lower maintenance costs and better marketability.”

Events in 1Q2022 and beyond

Notable launches in Penang during the quarter under review include The Meg by E&O Bhd at Seri Tanjung Pinang 2 (STP2); Lucerna Residence by Ideal Property at Ideal Vision Park, Bayan Lepas; and Anggun Residence @ Batu Kawan by PE Development.

The Meg is the first project developed on the reclaimed 760-acre STP 2 Island. It is part of the planned 253-acre mixed-use development on the STP 2A parcel known as Andaman Island.

The project will offer 1,020 serviced apartments in two blocks and 28 commercial lots. Targeting young professionals, young families and start-up entrepreneurs, it offers nine layouts with built sizes ranging from 567 to 897 square feet to cater to the lifestyle of millennials. Fully furnished units are priced at an average of RM850 psf.

Lucerne Residence will comprise 480 residential units and 103 offices on a 4.71 acre site. The units have builds of 1,100 to 1,200 square feet and are priced at RM663,900.

As for Anggun Residences @ Batu Kawan, the development is designed to allow owners to rent out their units like a typical hotel room. The project will comprise 496 condominium units, with builds ranging from 1,045 to 1,400 square feet and prices starting at around RM550 psf.

Marriott International Inc has announced that it has entered into a management agreement with local Rackson Group to develop the 200-room Le Méridien hotel at Penang International Airport in Bayan Lepas. Located opposite the airport, the hotel will be connected by bridge to the light rail offered at the airport.

Saleha expects construction of the hotel to begin in the middle of this year. Its completion is scheduled for 2026.

In addition to Le Meridien Hotel, which is Phase 1 of the Penang Gateway transit-oriented mixed-use development, other components of Penang Gateway include an office tower, serviced suites and a wellness center. to capitalize on Penang’s strength as a popular destination. for medical tourism in Malaysia. “We expect Penang Gateway to attract interest from potential buyers and investors due to its strategic location in Bayan Lepas and its direct connection to the airport,” Saleha said.

Penang also saw the launch of a nuclear medicine center in George Town at Penang Adventist Hospital. Saleha says the center will benefit the state’s medical tourism industry.

Various ongoing Penang Island modernization works will also boost tourism. This includes that of the Esplanade Seawall, which is expected to be completed this quarter, she notes. The project includes a 460m stretch between the Medan Renong food court and the Royal Malaysian Naval Base.

“Once completed, the site will be accessible at low tide, which provides a direct view of the original seawall. The project aims to enhance the attractiveness of key landmarks and demonstrate the value of the heritage city of Penang,” Saleha said.

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