Penang Property Talk

Gamuda Bhd is likely to sign the Project Delivery Partner (PDP) agreement for Penang Transport Master Plan in the ‘next few weeks’, and the first package of Light Rail Transit (LRT) would be awarded by mid-2020, according to managing director Datuk Lin Yun Ling.

“Once the PDP agreement is signed, the design works will start, from LRT to the first (man-made) island, or what we call Island A, and Pan Island Link, and reclamation work for South Island will all move. We expect by middle of 2020, the first package of LRT will be awarded,” he told reporters at a press conference, after the group’s annual general meeting today.

Source: EdgeProp.my

by Anders Ong

Sometimes some people earn more in property investment and sometimes some people just making lost in the market. Some are pure experts and some are pure luck if we had bought properties during the boom time every single person can also be an expert and boast about it. But, the era had past or do it really past forever?

We might know some of our friends whom had earned millions and we might have friends whom are saying property investment isn’t profitable. This goes to the simple theory of Property Cycle, it is the periodical and sequential cycle of property where there price goes up and goes down; in a nutshell, TIMING. Property cycle happens due to the economic principles of Supply and Demand influenced by the political, demographic, economic and social economic factors. The demand of property will always increase in the current era due to the growth of population and limited supply of land for property development.

The property cycle happens from time to time but it does take quite a long time to complete a perfect cycle which can range up to 10 – 30 years in some countries and this is the reason no one ever notices it or forgot as it took quite a time and an amateur investor could turn into professional investor for such a long period of investing.

The First recorded studying of property cycles was Homer Hoyt in 100 Years of Real Estate Values in Chicago and popularised by the 18 Years property cycle developed by Economist Fred Harrison, they are the first few people to identify the existence of property cycle. Fred concluded that the length of a full property cycle averages out to 18 years at max and divided into 4 distinctive stages.

Basically, there are TWO trend and FOUR stages of property cycles:-

Up – Cycles Trend

#1. RECOVERY of Market – During this stage, the market is gaining more confidence in the property buyer market. Rental rates started to rise, time took to sell off a property reduced, property price and property value increase. Banks are hungry and ease their lending criteria and approve more credits.

#2. Mid Cycle Dip – Once the market started to recover there will be a small mid-cycle dip as some earlier investor take profit before the explosive phase of the market

#3. EXPLOSIVE of Market – Bank interest is low and easier for approval, buyer sentiment increase, media perception are positive, property price increase at a more rapid rate and rental continue to increase. Property will be sold above their market value and vendor keep on increasing their prices for more profits. Every explosive stage also brings in more new young generations of investors into the market due to greed-driven by seminars and property guru. Many people will borrow against their increased house value and buying consumer products. Even seasoned property investors will also be driven as they worried they will missing out the boat. (Seller Market)

#4. Cycle Peak – This is the final few years of the explosive phase, where price had to reach the peak of the property cycle which the economist Fred Harrison named it as the “Winners’ Curse”. It is definitely not lucky to buy the highest priced property during the peak as the next phase of the cycle will be a downturn phase. Most property bought at this peak will be valued lower or worth less than the price paid later on. This happens due to property prices risen too quickly or unaffordable to the market, high growth of liability and credit due to heavy borrowing, overconfident of developers in sales and led to oversupply, and more speculators whom are looking for a quick property flip of fortune.

Down – Cycles Trend

#5. RECESSION of Market – Market stage is characterized by oversupply, decreasing growth, price plummet, more seller and fewer buyers, harder to get loan, home harder to sell, past buyers over-leveraged, increased vacancies, increase auction market, reduced cash flow or rental, and bad media perception with daily dose of oversupply and auction news. This is also the result of a rapid supply of developers’ stocks and sellers in the boom phase. Property prices could stagnate or even drop due to purchases at the boom period which people could not afford so they had to sell at depressed prices. (Buyer Market)

#6. Cycle Bottom – This stage of property cycle reflects the lowest stage of the cycle where most property prices are low, stagnant and rock bottomed but no one is buying due to the negative sentiment, oversupply and loss of money from sales during the recession.

#7. STABILIZE of Market – Falling bank interest rate and Bank Negara Over Night Policy (OPR) rates, ease of lending rules and policy, prices may remain flat and move up slowly. There are more and more government initiatives and interventions on the property market to encourage take up rate, economy and homeownership.

Summarization on investing through the property cycles timing:

• Recovery phase prices usually start higher than the last recovery prices.
• The property cycle has different time variance in different country.
• It is normal for property prices to go through the up and down.
• Buy at the bottom of the cycle and sell at the top of the cycle.
• Do not over leverage at the peak point of property cycle.
• Do not panic sell when price are dropping.
• Be a seller when everyone is buying
• Be a buyer when everyone is selling
• Do not mislead by the media.

In a nutshell, understanding of the periodical property cycle can make us a better investor and have more understanding of current property market health by looking at market signals. There would be nothing to be worried of during market recession and there would be nothing to be excited during the market explosive.

Anders Ong – Speaker, Property Consultant, Young Property Investor and Author of Back To Property Investment To Create Wealth

Hong Kong house buyers are looking around in Penang.

“Hong Kong people buying properties in Penang is not something new. But the number has definitely accelerated now,” said International Real Estate Federation (FIABCI) Malaysia president Michael Geh.

“For the past five years, there had been quite a number of retired bankers and semi-retired professionals who came and stayed in Penang,” he said.

These Hong Kong residents, he added, would opt for properties priced between RM1mil and RM2.5mil.

Geh said Penang had always been popular for Hong Kongers as it is just a two-and-a-half-hour flight away. “There are daily flights from Penang to Hong Kong and vice versa. They can even plan for a ‘one-day trip’ if they want, as it is very convenient to travel between both places.”

He also said the cost of living in Penang is lower.

On Tuesday, the South China Morning Post reported from a survey that showed “Hong Kong has lost its preferred status among the world’s expats” due to soaring flat prices, high cost of living and long working hours, before the protests began.

The survey by InterNations ranked Taipei as the best city for expats, followed by Kuala Lumpur and Ho Chi Minh City.

Real Estate and Housing Developers Association (Rehda) Penang chairman Datuk Toh Chin Leong said the “unbeatable” property prices here was also one of the main draws for Hong Kongers.

“Landed properties in Hong Kong cost around RM10mil. Just consider the amount of money they can save if they buy a property in Penang,” he said.

With RM10mil, he said a buyer could get a luxury unit for RM2mil here and keep the balance of RM8mil in fixed deposit.

“Buying properties in Penang is a retirement plan for them to live comfortably for the rest of their lives.

“Another draw to our island is the presence of international schools, the delicious food and sandy beaches which are quite similar to Hong Kong.

Even for the less well-off, Toh said prices here were still unmatched for those wishing to take up the Malaysia My Second Home (MM2H) plan.

Several Hong Kong stars are already accepted by the locals here as “semi-Penangites”.

According to China Press, they included TVB actors Hugo Ng, Dickson Lee and Philip Keung.

Ng, 60, recently moved to Penang with his actress wife Lily Chung, 55. Apparently, Chung was not too fond of the cooler temperatures in Hong Kong.

The couple rented a 4,000 sq ft condominium unit in Tanjung Bungah overlooking the sea. They would return to Hong Kong for work occasionally.

“The monthly rent here is RM8,500. In Hong Kong, with the same rent, I would only get a house that is 400 sq ft,” he was quoted as saying.

And he liked the food as well.

“My wife loves nasi lemak. She loves roti canai, too, and can eat that for breakfast and dinner. I prefer half-boiled eggs with toast and kopi-O,” he said.

However, he made clear that his decision to relocate to Penang had nothing to do with what was happening in Hong Kong, saying that it was purely a coincidence.

As for Lee, he decided to move to Penang after coming here for a holiday last year.

According to the China Press report, Lee had hurt his legs in an accident last year and decided to visit Penang with his wife while recuperating.

“I had not been to Penang before this and once I set foot on the island, I fell in love with it. The lifestyle here is simple and it’s like Hong Kong in the 70s and 80s.”

“I applied for MM2H and moved here in October last year,” he added.

“The people here are very nice and helpful. I enjoy the simple life here.”

Source: TheStar.com.my

A newly proposed development by Zantalite Enterprise Sdn. Bhd. at Teluk Kumbar. Located along Lorong Gertak Sanggul, about 5 minutes drive away from Lexis Suites Penang. Surrounding amenities include SMK Seri Bayu, SK Teluk Kumbar, markets and popular seafood restaurants namely Hai Boey Seafood and Khunthai.

This development will see the demolition of the existing buildings, for the construction of two 28-storey residential and 21-storey commercial towers. The residential tower will offer 986 affordable units whereas the commercial tower will feature 200 duplex suites.

The project is still pending for approval. More details will be available upon official launch.

Project Name : (to be confirmed)
Location : Teluk Kumbar
Property Type : Affordable housing & commercial
Built-up Size: (to be confirmed)
Total Unit: 986 (affordable housing), 200 (suites)
Indicative Price : (to be confirmed)
Developer : Zantalite Enterprise Sdn. Bhd. (OHM Group)

Location Map:

Ewein Bhd is partnering Consortium Zenith Construction Sdn Bhd (CZC) to jointly develop land in Penang as a RM159.75 million development.

In a bourse filing today, Ewein said its unit Ewein Zenith II Sdn Bhd, a wholly-owned unit of Ewein Zenith Sdn Bhd, which in turn is an 89%-owned subsidiary of Ewein Land Sdn Bhd, has entered into a joint venture (JV) with CZC on Nov 30, 2019 to undertake a proposed development.

Ewein said the proposed development is to develop a freehold land situated in Section 1, Bandar Tanjong Pinang, Daerah Timur Laut, Negeri Pulau Pinang measuring approximately 4.34 acres marked as Plot 1 in the JV agreement (the said land) for RM159.75 million.

“Taking into consideration the experience and expertise of CZC and its group of companies (CZC Group) in the construction industry, the proposed JV allows Ewein to leverage on the CZC’s experience and expertise in property construction which will facilitate a successful execution of the development to be undertaken by EZII,” it said.

Furthermore, Ewein said this proposed JV will be the second development project both Ewein and CZC will jointly develop. Currently, both parties are involved in the development of a luxury sea-front property development project, known as City of Dreams in Bandar Tanjong Pinang, which is in completion stage.

As such, Ewein said it has a proven track record in a JV for a property development project with CZC, and the board of directors of Ewein is confident of replicating the same success in working together with CZC as both parties continue to have a strong relationship.

“With the strategic location of the said land, the board envisages the development potential of the said land to be favourable and in line with the group’s long-term strategic plan to enhance the group’s property development business.

“Thus, it is expected to contribute positively to the financial position of Ewein and in turn deliver greater value to the shareholders of Ewein,” it added.

After taking into consideration all aspects of the proposed JV, the audit committee said the agreement is in the best interest of the Ewein. The audit committee also added that the JV is fair, reasonable and on normal commercial terms, and is not detrimental to the interest of the minority shareholders.

Ewein said the proposed JV is expected to be completed within 24 months from the date of agreement.

“The proposed joint venture will be funded via internally generated funds and/or bank borrowings by Ewein, the breakdown of which has yet to be finalised at this juncture,” it said.

Approximate location of project site

Source: EdgeProp.my