The Penang property market has recovered from last year’s global financial crisis and is set for another boom, said Hunza Properties Berhad (HPB) Group executive chairman Datuk Khor Teng Tong.
He said the market was well on its way to recovery with signs of prices gradually rising.
“The local property market is expected to enter another booming cycle preceded by signs showing a gradual rise in prices due to the limited supply of land in prime areas,” he said in his briefing on HPB Group’s 2010 financial results on Tuesday.
Khor said the scarcity of land on Penang island, among other factors, had contributed to its rising prices.
“The increase in building material prices and labour costs, coupled with a restriction on working hours, has resulted in a rise in property costs on Penang island,” he said.
“The shortfall in supply of property cannot be addressed and overcome in the short term and this will lead to a situation where supply will not be able to meet demand,” he added.
This, he added, would contribute further to the increasing trend in property prices.
Given the current situation, it would be the best time to invest in real estate, he said.
Khor also said that the property market in Penang was on the upward trend following the economic recovery.
“This is the time to grab hold of this golden opportunity,” he said.
On HPB Group’s performance in the year ending June 30, 2010, Khor announced that the company had raked in its highest ever net profit — RM50.9mil.
HPB Group also recorded a stronger result of RM248.7mil in revenue, a 172% increase from RM91.4mil the year before. - The Star
13 comments
Developer will always share only positive news. Last year, most developer are doing well and released the result only now. Currently, the heat has mellow down ever since the height in the interest rate. Many new completed properties are also available for sale in the secondary mkt i.e. Summer Place, Waterside, Dpizza and even The Spring. Others not to mention are Platino, I-Regency and less popular ones are abundance. A check with the bankers and developers also confirmed that activities slow down since June 10 and very quiet.
YA, What Mr Khor TT said is developer speach!
We are going to see bubles soon with over supply of commercial and residential property in Island! With non-performing loan increasing and no sub-sales take up.
Sales talk ..Penang very small island lah . Have heard in the market the own staff invest in other property
It is still nto sure whether the new condo subsale price is coming down. But, for sure, it is stagnant. No hurry to rush in. Keep cash somewhere else to generate some return since there are so many condo for sales.
From developer point of view. Property market is always very good and every year is a good year to invest. Otherwise how to increase their profit. These RM50.9 mil profit is derived from selling " over price " property in Penang.
Developer shouldn't be allow to give too much publicity, they are more on promoting their properties. Advise should come from qualified economist which are more neutral and professional.
"Good time" means another down trend is near....careful!
The mainstream media should not give too much space & publicity to developers who come out with sweeping and biased statements that are obviously to serve their interest only, as if the public are not able to analyse and decide by themselves ...
See Pek Sen ... very boring and insulting
Once bankers tightern up their loan approval, property market will goes down, let banker play the game now. They gain and suffer later if continue approving so much speculator's loan.
Current BLR is at 6.25%, still considering very low. Looking back into the history, 1998 was highest at 12% after market crisis, 2003 was at 6%, and 2007 was at ~7.5%. Lets assume that BLR increase to 8% and bank loan fix into that range with no (-), the monthly installation required for a RM400k property will be ~RM2.6k, 30yrs tenure. Sounds abit scary, this is not the kind of money which an average income group can/willing to afford for a basic RM400k property. Of course this is not something the banks would want to do as well unless there is another crisis..only god will know. Looking at the other angle, inflation rate is at ave ~3% for the past 5 years, defnitely putting money inside bank is not an option as the hard-earned will just get depreciated over-time, and eroded away. Property however can be quite a good hedge against this though, inflation would bring up building cost so price should also increase together. Personally i would still invest, but carefully. I am targeting those <=RM500k as may still have room to stretch as compare to those high-end products.
Guys,
Not to forget that BLR during the 97/98 was BLR + 2.2 from Citibank. Now the interest is BLR - x.xx.
Those who secure the loan last year was even -2.3, but when the market turns bad, Bank may not provide -x.xx anymore. Furthermore, when Bank tighten the loan, new loan is also becoming harder.
In a way, it's because of the Bank facility, that's why people can buy property, without Bank loan (like the old days), it will be problem for new buyers as well... At the end, have to rent from those who already have properties.
This world is never perfect, and Economy is an Art.
property market can't use inflation rate, economics growth or any statistics figures to support, is depend on buyer/investor believe.
You brave to invest in high prices is your business, and many people still gaining when invest in very high prices.
You brave to invest in market recession time is your business, you can gain more if your luck is good.
i would say TOO MANY now for condo and apartment in Penang island, but not sufficient for landed houses.
No suprise landed house keeps going up, But why non-landed with < 1500sqft cost 500k & above also got so many people wants?
Not worth at all!
I am new in Penang property market.
I notice that the rental price has been stagnant since >2 years ago (based on the information I read from this blog).
But, the property price has been inflated >20% within the same period.
With that, the rental return is <5%/year (considering maint fee & other costs).
Anybody wants to comment on this?