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Monday, September 19, 2011

Property prices and demand up in Perak

On the fast lane: Terraced houses developed by YNH Property in Manjung. Manjung is the fastest growing district in Perak and property prices have risen by about 15% over the past two years.

GEORGE TOWN: The delivery of residential properties in Perak is expected to hit about 10,000 units this year compared with 4,582 units last year.

The delivery of housing units in Perak was 9,747 in 2007, 6,513 in 2008 and 8,496 in 2009, according to a recent Finance Ministry property market report.

Real Estate and Housing Developers' Association Perak chapter chairman Datuk Francis Lee told StarBiz that there was significant change in the attitude of consumers in Perak towards the purchase of properties since the beginning of the year.

The property prices in Ipoh have increased by about 15% over the past one year.

“The price of a double-storey terraced house has surpassed the RM200,000 mark, selling at around RM240,000 in the Kinta district area, which is within 8km radius from Ipoh town,” he said.

There are 10 districts in Perak. About 60% of the new property launches are located in the Kinta district.

The Larut, Matang, Selama and Manjung districts are the other areas where new properties are being targeted for development.

“The increase in property prices is largely caused by higher land cost, bureaucratic compliance fees, and construction cost.

“This has prompted more locals in Ipoh to buy properties today, as they fear that property prices may go up,” Lee said.

Despite the rising property prices, developers in Ipoh were not making additional margins from development, Lee added.

“At RM240,000, a double-storey terraced house in Ipoh is still affordable for a family with a combined monthly household income of about RM5,000.

“Buyers can withdraw from their EPF savings for partial payments and need only to pay above RM1,000 a month on a 20-year loan,” he said.

Lee added that double-storey terrace properties were still the most popular in Ipoh, followed by single-storey terrace houses which were selling at about RM150,000.

“Manjung is the fastest growing district in Perak. Property prices in Manjung have risen by about 15% over the past two years.

“In Manjung, the price of a double-storey terrace houses is about RM220,000, while single-storey properties are priced between RM150,000 and RM180,000, which are almost the same level as prices in Ipoh.

“There is rapid industrialisation in Manjung, which is spurred by the Lumut Port industrial park and the Lekir bulk terminal,” he said.

Lee added that the property market momentum should maintain unless there were further actions by the Government to prevent a property bubble and adverse changes in the economic climate.

Meanwhile, YNH Property Bhd corporate strategy head Daniel Chan said the group had so far launched mixed-development projects with an estimated gross development value (GDV) of RM525mil.

The projects include 300 units of shop-lots with GDV of RM210mil, 500 units of double-storey terrace houses with GDV of RM100mil, the RM135mil AEON shopping mall, and the RM80mil Pantai Hospital Manjung.

“The property outlook for Manjung should be stable, as our buyers are not speculators. Despite having gone through a few recessions, Manjung has generated a steady annual income of RM25mil to RM30mil to the group for the past 20 to 30 years,

“The Royal Malaysian Navy Lumut base and dockyard is a strong source of support for properties in Manjung. About 1,000 recruits join the navy every year,” he said.

The Manjung township project by YNH is also expected to benefit from companies such as Vale International (SA) Ltd, which is building a RM15bil iron ore pelletising plant in Manjung.

Scheduled for completion in either 2013 or 2014, the investment is expected to draw more workers to Manjung.

Kinta Properties Holdings Sdn Bhd chief executive officer Eric Chew said in the first half of 2011, sales had improved by 30% compared with the previous corresponding period.

Chew said the purchasing power of the younger generation had increased significantly in recent years.

“The residential property market in Perak is expected to remain to be stable. New properties will be priced slightly higher because of rising building material costs.

“The bulk of property purchasers are still locals. But in recent years, we are seeing more buyers from other states, as the value of property in Ipoh is appreciating,” he added.

The company has about RM55mil worth of properties to be launched in the second half of the year in Bandar Baru Sri Klebang, compared with the first half of 2011 which saw RM65mil worth of new launches.

They included new detached homes in a guarded community in ParkLane Residences, Bandar Baru Sri Klebang.

“There has been an increase in the demand for gated and guarded properties as purchasers are looking for homes with security as a key feature.

“We have also recently launched semi-detached and terrace houses in Bandar Baru Sri Klebang that are equipped with environmentally friendly features such as solar water heater, solar reflective paint, and rain water harvesting system,” Chew said.

By The Star

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