Experts: Value is in the location, not furniture

GEORGE TOWN: The visit by pressmen to Penang Chief Minister’s controversial RM2.8mil bungalow in Jalan Pinhorn has no bearing on the controversy as it had nothing to do with the actual value of the property.

Several property valuers said the interior of the bungalow had no place in determining its value compared to its location.

“How the house is built and furnished contributes little to the price tag,” said one valuer who has been in the business for 18 years.

Pointing out that the data on all land transactions were available to property valuers, he said the last land sale before Lim’s purchase was done at RM722.36 per sq ft compared with Lim’s deal of RM275.56 per sq ft.

“The chief minister got a valuation of 2.62 times lower than the earlier deal of a house on a plot of land half the size, nine units away,” he said.

The 4,983sq ft plot was sold for RM3.6mil on Oct 8, 2014, while Lim bought his bungalow built on a 10,161sq ft site last July 28 for RM2.8mil.

Another real estate agent identified as Janice said features like the building’s structure, fixtures and furnishings would matter only for high-rise properties like condominiums.

“For landed real estate, it’s all about where it is. It does not matter if there is only a run-down house on it. The property value will still be high if it is in George Town,” she said.

Another real estate agent described Lim’s neighbourhood – Pinhorn Road – as a prized location

“People who can afford property in Pinhorn Road want the location. If they don’t like the existing structures, they just demolish and take their time to design their home,” said the property negotiator.