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Monday, September 13, 2010

Rising demand for Prai property

Completed terrace houses in the Pearl Garden project by Tambun Indah Development in Simpang Ampat

GEORGE TOWN: Residential property prices in the prime locations of Seberang Prai have seen their most pronounced rise in years with prices having advanced by between 10% and 20% for the past six months.

The prime residential locations in Seberang Prai are in Alma in central Seberang Prai, Simpang Ampat and Bukit Tambun in southern Seberang Prai, and Butterworth town.

Henry Butcher Malaysia (Seberang Prai) senior manager Fook Tone Huat told StarBiz that a double-storey terrace house in Alma, Bukit Mertajam was now priced at around RM280,000, compared with RM240,000 about a year ago, an increase of about 17%.

A similar type of house in Simpang Ampat and Bukit Tambun in South Seberang Prai is now selling for about RM260,000, compared with RM220,000 a year ago.

In Butterworth town, a double-storey terrace house is priced around RM320,000, compared with about RM260,000 a year ago.

For condominiums in prime locations such as the Pinang Laguna Water Park condo project in Seberang Jaya, Fook said the prices had increased by about 10% from last year to about RM200,000.

For example, the recent launches of Pinang Laguna Water Park Condo units in July by Island LandCap Properties were priced from RM208,888, up about 10% from RM188,888 last August when the project was first introduced.

The Pinang Laguna Water Park Condo project, comprising 350 condominiums with built-up areas of 935sq ft and 1,010sq ft, is over 90% sold.

“In last three years, condominiums are becoming increasingly popular in Jalan Raja Uda and Jalan Telaga Air in Butterworth town.

“The original selling price, which started off from about RM160,000 for a unit with over 1,000 sq ft in built-up area, has risen over 30% over the past three years to around RM210,000 and RM230,000 today,” he said.

For the second half of 2010, three condominium projects, the Dahlia Park, Tanjung Heights in Butterworth town, and Palma Laguna Water Park Condo in Seberang Jaya, are already being planned for launching.

Although the price of residential properties had risen, Seberang Prai is still far from being a speculative market.

Fook said this could be seen in the low volume of sub-sales transaction of residential properties in the secondary market.

“Since January 2010, our company’s sub-sale transactions are just over 50 units.

“The appreciation for sub-sales properties is about 5% yearly,” Fook said, adding that Henry Butcher Seberang Prai’s main focus was on sales transaction of light industrial properties.

Fook said the speculative element in the Seberang Prai residential property market was not strong, as there was a strong supply of new houses.

From Asas Dunia Bhd alone, a major developer in the mainland, in the first half of 2010, the group had already launched 231 units of landed residential properties with an approximate gross sales value (GSV) of RM82mil, compared with the 169 units with an approximate GSV of RM44mil launched by the group for the whole of 2009.

Tambun Indah Development Sdn Bhd general manager Teh Theng Theng said the sub-sales for its Juru Heights project in central Seberang Prai in the past three years were only about 10% of the 482 units of landed residential properties in the scheme.

The demand for workers from multi-national corporations such as Ibiden Electronics Malaysia Sdn Bhd, First Solar, and Osram is also stimulating the demand for affordable residential properties on the mainland.

Ibiden, for example, has announced that it would hire some 900 workers for its first plant that is scheduled to start operations in the second quarter 2011.

Osram Opto Semiconductors and First Solar had earlier this year announced their plans to hire 1,000 workers for each of their respective plants in Bayan Lepas and in Kulim Hi-Tech Park (KHTP).

Meanwhile, Real Estate Housing Developer Association (Penang, REHDA) chairman Datuk Jerry Chan said the rise in Seberang Prai property prices had to do with the increase in land and construction costs.

“In hot locations such as Butterworth and Bukit Mertajam towns, where land is limited, the price of land with vacant possession is now about RM50 per sq ft and RM40 per sq ft respectively.

“In Alma, the price of land with vacant possession is about RM30 per sq ft, while in Bukit Tambun it is around RM18 per sq ft.

“Inclusive of land and construction costs, the cost to build a double-storey house on the mainland is about RM200,000, compared with about RM160,000 a year ago,” Chan said.

Chan said the scheduled completion of the second Penang bridge in 2013 was another important factor in pushing up property prices. “Now that is over 24% completed, people are now confident that it would be completed on time,” he said.

DNP Land Sdn Bhd general manager KC Tan said one of the reasons why property prices in Bukit Mertajam was appreciating had to do with the effort to improve the road infrastructure.

“For example, the roads near Bukit Mertajam town are now gradually being widened to accommodate the construction of a flyover that will reduce traffic congestion.

“The opening of Tesco hypermarket in Alma before the year ends also explains why the area is now booming as a prime residential zone,” he said.

By The Star

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