The days of “super condominiums” selling at exorbitant prices are apparently over.
State Real Estate and Housing Developers Association (Rehda) chairman Datuk Jerry Chan said such condominiums would be difficult to sell in view of escalating land prices.
“Three years ago, land prices on the island were between RM300 and RM400 per sq ft. Now it is more than RM700. A super condominium will probably cost RM4mil per unit now. It would be very difficult to sell.
“Even the demand among foreigners isn’t for super condominiums so it’s better for developers to build smaller units,” he said yesterday.
Chan said the trend now was for more landed properties and high-rise condominium units with built-up areas of less than 3,000 sq ft.
“The demand for houses is strong though the supply is limited. Of course, there will be some new super condominium projects too but these will be in specific areas such as Gurney Drive, Pulau Tikus and Jalan Sultan Ahmad Shah,” Chan said.
State Town and Country Planning, Housing and Arts Committee chairman Wong Hon Wai said the Penang Municipal Council’s plot ratio guidelines for high-rise properties were revised last year to provide for the construction of more affordable housing.
“The trend a few years back saw developers building super condominiums.
“This was largely due to the previous guidelines. The worrying trend was among the factors that led to the revision,” he said.
Wong said based on recent applications received under the revised guidelines, the state would see more mid-range high-rise developments.
“The council is also introducing fee incentives for developers of units costing less than RM350,000.”
The revised guidelines would allow developers on the island to construct 122,000 sq ft per acre compared with 42,000 sq ft per acre in the past.
The previous guidelines, which had been enforced for 30 years, did not give developers the room to construct units of mixed sizes and lay-outs and price them according to the needs of different income groups. - By Christina Chin (The Star)
4 comments
Finally, he agrees to the oversupply/overprice market condition. Everyone has been aware of it 1 years ago.
The next in line will the medium cost condo.
I have heard from some market analysts that the property market in Malaysia in general is expected to cool down mid to end of 2011 as the current market condition has been over-inflated and over-heated. Unless if there is a sudden influx of overseas investors, the market should cool down as there are now more supply of new property launches in the recent 1-2 years. Supply has finally met if not exceeded the demand (be it own-stay demand or investment demand).
Don't forget the ringgit has strengthened a lot over the last 3 years. I think the days of the sudden influx of overseas money has peaked. For the same unit of foreign currency, you get a lot less bang for the buck. There will still be foreign money coming in, however it will not be like the tsunami-like money flow like the last 3 years.
Of couse Dtk Jerry Chan will agree. Asas Dunia is not involved in super hi-end condo development. His Co deals mostly in low & mid-range houses
But his statements still hold much water though...as the newly completed or 2010-released supercondos along T'Bungah are seriously blank at nite.
The only one showing plenty signs of life is none other than the (in)famous "cheap yet big piece" Cove development