REAL estate value for landed residential and high-rise properties on the island is expected to remain stable this year, according to Henry Butcher International Asset Consultants (Penang) senior vice-president Teoh Poh Huat.
One of the reasons for the stability of prices had to do with the demand for ‘boutique bungalows’ and gated-community or strata-titled landed property projects, Teoh told StarBiz.
“The other reason has to do with the fact that there is no oversupply of landed residential properties in prime locations. We also expect landed residential properties on the island despite its low initial yield to continue attracting investors which would keep prices stable,” he said.
Teoh said that since the start of 2000, there had been several launches of ‘boutique bungalows’ and gated-community project in prime residential cum commercial locations such as Batu Ferringhi, Pulau Tikus, and Bukit Jambul.
According to Teoh, Pulau Tikus is a hotspot for ‘boutique bungalows’ and gated-community projects, as it has comprehensive amenities such as schools, hospitals, shopping complexes, and food and beverage outlets.
“A ‘boutique bungalow’ is a single storey detached house built on a 5,000 to 8,000-sq ft land area and has a built-up of between 3,500 and 4,000 sq ft, suitable for a family of four. The selling price is around RM3mil,” he said. “There are several ‘boutique bungalows’ in Jalan Ramanathan (popularly known as Scott Road) and Codrington Avenue. We plan to launch four ‘boutique bungalows’ this year in Codrington Avenue on behalf of a local developer.”
Teoh attributed the popularity of gated-community projects to their pricing, locations, tight security, and maintenance services.
Due to the scarcity of land on the island, developers have resorted to developing strata-titled landed residential properties to give home seekers value for their money.
Teoh said: “Given the land scarcity, it is tricky to find a sizable piece of land to build many different types of landed properties and still sell them at affordable prices. The alternative is to find a smaller site to build a higher density of landed properties such as terrace, semi-detached, and bungalow houses with strata titles. Developers, therefore, save on land cost and would have no problem in pricing their properties affordably.”
He said the built-up area for a semi-detached unit of a gated community was about the same as that of a regular semi-detached house with individual titles.
“The difference between the gated community semi-detached unit and the regular semi-detached one is that the former is located on a smaller land site. The land area for a gated community semi-detached unit is about 2,000 sq ft compared to about 3,000 sq ft for a regular semi-detached house. The price for a semi-detached unit in a gated community starts at about RM500,000 and is about 25% lower than the regular semi-detached house,” he said.
According to Teoh, for a bungalow in a gated community, the land area is about 4,000 sq ft while the regular one is about 6,000 sq ft.
“The built-up area is about 4,000 sq ft for the bungalow in a gated community, which is about the same for a regular bungalow,” Teoh said, adding that the selling price for a strata-titled property was around RM900,000, about 25% lower than the regular type.
He said landed properties in a gated community commanded strong demand because of the availability of comprehensive clubhouse facilities, round-the-clock security, and well-maintained landscaped surrounding.
“Most people purchased condominiums in the early ‘90s not only because they were cheaper than landed properties, but also because of the clubhouse facilities, security, and the landscaping provided. The gated housing scheme comprises landed properties and has all the security, clubhouse, and landscaping features,” Teoh said.
Some of the gated community projects launched last year were Casa Grande and Ferringhi Villas located on the Batu Ferringhi beach-front, and Krystal Hill and Krystal Garden in Bukit Jambul.
According to Teoh, the capital and rental value of high-rise buildings in Batu Ferringhi, Tanjung Bungah, Green Lane Heights, Island Park and Island Glades, Jelutong, Bayan Baru, Sungai Ara, and Relau, will remain fairly stable this year due to the demand for projects with attractive designs in good locations.
Last year, medium and high cost high-rise in locations such as Jelutong and Tanjung Bungah attracted buyers easily, he said.
“For example, we sold 470 units of the Mutiara Heights project, a medium-cost high rise project in Jelutong, within a two-week period. The units, measuring between 800sq ft and 1,600sq ft, were sold between RM110,000 to RM230,000. Most of the buyers were owner-occupiers. Similarly, the Coastal Tower project by Taman Ratu Sdn Bhd in Tanjung Bungah was also well received. We sold more than 280 units in less than two months after its launch in June. The units, with built-up areas between 806 and 1,210sq ft, were sold between RM139,000 and RM230,000,” Teoh said, adding that the project was scheduled for completion by the end of next year.
He said the units measured 1,500 to 1,600 sq ft and sold from RM260,000 onwards.
Raine & Horne International Zaki + Partners Sdn Bhd partner (Penang branch) Michael Geh is more upbeat about the capital value of landed residential and high-rise properties on the island this year.
“This year we expect to see the appreciation of the value of landed residential properties on the island. We are anticipating a 5% to 10% capital appreciation for landed residential properties in Sungai Nibong, Tanjung Tokong, Tanjung Bungah, Green Lane, Sungai Ara, and Teluk Kumbar,” he said.
Geh said the selling price of high-rise residential properties had already bottomed out, reaching the lowest levels.
“This year, therefore, we expect their capital value, especially for those apartments and condominiums in locations such as Pulau Tikus, Tanjung Tokong, Tanjung Bungah, and Bukit Jambul, to rise between 2% and 5%. Condominiums in prime locations such as Gurney Drive and Pulau Tikus are currently priced below RM275,000,” he said.
Geh said the demand for apartments priced below RM115, 000 in strategic locations was gradually making a comeback.
“Since Chinese New Year, we have successfully marketed 90 units of the new Permai Ria Apartments in Tanjung Bungah, each tagged with a selling price of RM105,000 onwards,” he said. “This was the right timing for first-time house buyers to invest in landed residential properties.