2016 Sector Review
Despite the global headwinds in 2016, the Malaysian economy proved resilient with a Gross Domestic Product growth of 4.2 percent. Bank Negara Malaysia reported that positive contributions from private consumption, net export, and investment activity had offset the decline in public expenditure.
However, the property sector continued the downtrend from 2015, as buyers grappled with high loan rejection rates due to stringent loan financing requirements. This was further compounded by the general increase in cost of living, together with narrower growth in income due to the prevailing economic uncertainty.
Not surprisingly, these negative factors led to property developers adopting a cautious approach in property launches, focusing mainly on landed properties in prime locations, which remained well sought-after by owner-occupiers and long-term investors.
In this regard, mainland Penang, with its vast land space compared to the island, accounted for approximately 90% of new houses constructed in Penang in the year, and constituted 75% of existing landed residences in the state.
On top of incoming supply, industry experts reported that landed property prices in mainland Penang had been firm, and possibly even increased during the year, reflecting the sustained demand from buyers.
The appeal for homes on the mainland was supported by affordable price points compared to the island, the improved commute to the island with the opening of the Penang Second Bridge, and new work opportunities resulting from increased industrial activity on the mainland.
2017 Property Sector Outlook
Entering 2017, the demand for residential property on the mainland is expected to stay firm, benefitting from land scarcity on the island as well as positive progress in planned economic developments on the mainland.
The industrial growth in the Batu Kawan Industrial Park is expected to be strong, with domestic and foreign investors committed to multi-million investments to build and/or expand their operations in the near future. These new industrial sites will translate to job creation and attract homebuyers to the vicinity, thus creating a positive cycle for property developers, retail, and other commercial activities.
On account of its proximity to Batu Kawan, the Pearl City township will benefit from spill over effects of the exciting developments in Batu Kawan, which has been planned to be an integrated hub for leisure and entertainment, medical, education, tourism and technology activities.
In the retail category, the consensus view is that retail centres that are able to provide comprehensive offering to the catchment population will be sought after.
The planned infrastructure developments interlinking major areas in the mainland under the proposed Penang Transport Master Plan, will certainly play a pivotal role in enhancing transport connectivity, and facilitating the movement of large masses to key areas.
Amid this challenging environment, Tambun Indah Land Berhad will endeavour to position itself to meet homebuyers