PENANG still has the magical charm to attract investment into its property development sector.
The sea, the hills and the affordable cost of living are all part of the pull factors, but the island should not remain complacent. It needs to work on enhancing its competitive edge.
This is the view of six key developers of Penang in a dialogue co-organised by CIMB Bhd and Henry Butcher Penang.
In the dialogue jointly moderated by Dr Daniel Yeoh of CIMB and Dr Teoh Poh Huat of Henry Butcher Penang, they shared their views on the outlook of the property market for the fourth quarter of 2005, and strategies to boost Penangs property sector.
Taking part in the dialogue were Hunza Properties Bhd executive chairman Datuk Khor Teng Tong, Sunway City (Penang) Sdn Bhd assistant general manager Yong Leng Kee, Belleview Group executive director Ng Chee Kheong, Coronation Springs Sdn Bhd director Ledand Tan, IJM Properties Sdn Bhd managing director Teh Kean Ming and Ivory Properties Group project director Ron Loh.
According to Teh, Penangs property market outlook for the fourth quarter is positive.
For example, interest rates on housing loans are still low, and there is a demand for high-end housing products on the island. To move forward, Penang needs to create an identity for itself, such as a hub for high-tech investment ventures.
This would create better-paying jobs and boost income levels, which are important pre-requisites for boosting the property market in Penang, he added.
Khor said the outlook for the island appeared more positive than for the mainland, due to the upmarket image and the magical charm of the island. The prospects for upmarket properties appear bright, but there is a shortage of houses priced between RM80,000 and RM160,000, he said.
Khor added that Penang needed an identity as a tourist destination.
To achieve this, we need to encourage more direct flights to Penang from overseas and have more high-profile conventions here. Finally, we need to improve the cleanliness of Penang.
If Penang could be more attractive to tourists, there would be a corresponding increase in demand for commercial properties.
With a substantial tourist crowd, developers will also find it easier to promote and market the Malaysian second home programme more aggressively, he added.
Khor said the local government must also reduce red tape and expedite the approval process of projects.
To boost tourism in Penang, the traffic congestion situation must be alleviated.
This means the Penang Outer Ring Road project must be carried out soonest to allow the island to cater to a larger volume of tourism activities, Tan said.
To ensure the products developed find the right markets, developers must understand the needs of their customers well.
Different customers have different preferences. For example, Japanese home seekers like timber and Japanese gardens, whereas Middle Eastern home seekers want separate swimming pools for men and women, Tan added.
Yong said demand for landed properties in Penang was still strong. We are seeing a lot of landed properties being sold to people who want to upgrade their lifestyles, he said.
Yong said relying on a good property market, however, was not good enough. To ensure what is built sells, developers need to stress on branding, product quality and customer service, he said.
The property market for the fourth quarter was stable, Ng said.
The upmarket and low-cost property segments appear alright, but there could be soft demand for condominium properties priced between RM250,000 and RM350,000, as there is now a lack of interest in such properties unless the location is extremely attractive.
There are still pockets of opportunities on the island and on the mainland, especially in Juru, he said.
Ng said the tastes of consumers in the property market had changed and had become more discerning. They are no longer in a rush to purchase big-ticket items, or exorbitantly-priced properties, he said, adding that developers must deliver quality properties with affordable pricing.
Loh, however, takes on a slightly pessimistic view of the property market situation in Penang.
We foresee a soft property market, mainly due to high fuel prices, which may push up interest rates in the near future. Thus, we also expect consumers to be more prudent in their spending, he said.
Loh said that because of the wide variety of property choices available, consumers were demanding discounts.
He said consumers needed to be educated on the type of properties that they were purchasing.
Some of them are still not quite familiar with the concept of gated-and-guarded residences, which is, simply put, landed properties with condominium lifestyle, offering the best of both worlds.