Posted by
OffThePeak
12 yrs ago
PENANG : As Good as They Say?
[b]"Time to Catch Penang Boom"[/b] - in today's Standard, pg.15
========
The premise is:
+ Malaysian property is "the most underpriced in the Asian region"
+ Luxury condos in Penang are "selling at a tenth of the prices on HK Island",
and they start from only HK$1,500 psf, with three car parking spaces
+ FDI in Malaysia rose by 12.3% in 2011, led by Penang, and
Penang contributed 28% of MY's growth, with only 6% of its population.
On the island are: Dell, Motorola, Hitachi, Bosch, and Intel
+ Penang ranked as one of Top 10, best places to live in Asia.
English is widely spoken, and the cost of living is low.
+ Malaysia My Second Home, can provide a 10 year Visa,
and investments may benefit from an appreciating Ringgit
(Free Plug):
Gabriel Choi of Asia Homes (HK) says:
"It is a golden time to buy in Penang as it is now at the same place as HK and Singapore were in the 1980's".
He recommends new luxury condos for MYR 1.0 - 1.6 Mn (= HK$ 2.47 - 3.96 mn)
(I reckon that such recommendation is based on what he has to sell.)
/there's a similar thread on the KL forum:
http://kualalumpur.asiaxpat.com/forums/living-in-kuala-lumpur/threads/148052/penang-:-as-good-as-they-say?/ /
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THE LIGHT COLLECTION - is the property mentioned in the story
(Directly across from Mainland Penang, near the bridge)
LightCollection-3 is now under construction,
and is described as "40pct underpriced*, compared with other new launches)
at HK$1,500 per sf
Project will be complete in 2015, an no interest is due until then
== ==
*Why underpriced? The clue is in the OP:
"they start from only HK$1,500 psf, with three car parking spaces"
You absolutely need a car to live there.
From memory there is No Shopping at The Light, and Nothing to Do.
=====
Video- : https://youtu.be/3rEMOMPDpQE?si=9B1PE8Lq7SEYTE_w
Light-1 : http://www.thelightwaterfront.com/
Light-2 : http://thelightwaterfront.com/collection_two/collection2.html
Light-3 :
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I like Georgetown/Penang, as a place to explore on foot.
There are many good restaurants in Penang and Malaysia. As more expats move there, the quality of life is likely to improve.
My biggest concern is that the next Tsunami may not be too far away, and Penang is more exposed than KL, for instance
==== ====
This is a little out-of-date, but some pollsters liked it:
George Town also moved up a spot in the ranking for the world’s most liveable cities at 62nd place.
Five Asian cities made it to the top 10 in the global ranking as the best places for Asians to live in – Singapore (1st), Kobe (3rd), Yokohama (4th), Tokyo (5th) and Hong Kong (8th).
1. Singapore
2. Kobe
3. Yokohama
4. Tokyo
5. Hong Kong
6. Taipei
7. Macau
8. Kuala Lumpur
8. Bangkok
8. Penang
11. ???
===
/see: http://tinyurl.com/Penang-G2
If you correct for cost-of-living, then Penang must be close to number 1.
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1) Singapore - government breathing down your neck so a non-starter, numbers 2-4 earthquakes so that leaves Hong Kong as number 1.
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"...that leaves Hong Kong as number 1"
At 10X the cost of humble little Penang
For excitement, you can watch a Tsunami roll in from your Gurney Drive luxury condo.
This one did not even make the news:
https://youtu.be/hLrcNUs3QgE?si=j7mYg5-APhA_nRE7
Here's an earlier one, from Ground Zero:
https://youtu.be/ihN1qYVhka4?si=LPOBs7F7syQGyCs-
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All of the places on the list have their pluses and minuses (at least of the ones that I am familiar with).
HK is probably the most liveable on the list in terms of most things except housing cost. If cost is an issue, I would be ok with either Singapore or Bangkok.
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Singapore is not appreciably cheaper than HK, from my experience.
Maybe 10-15% or so, but then you face higher taxes
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If you are an EU citizen, you have the right to live and work (though there are no jobs) in the French overseas department of Reunion Island in the Indian Ocean. The UK still has Diego Garcia but that is just a huge weapons depot and airbase and British citizens tend to have more rights in French colonies than UK ones now. I can only live in Gibraltar and possibly the Falklands. No chance of getting a look in in Bermuda or Cayman islands unless I win the national lottery. Can move to Guadeloupe or Martinique though.
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Malaysia is stable and pretty safe to buy now. I am from Singapore working in Hong Kong. I bought 2 each in both KL and Penang after selling a Singapore flat. It is only SGD 250 psf, while it is 2000 SGD in Singapore, which has risen 2.5 times since 2005. Now Hong Kong is too expensive for investment.
Penang I bought one in The Light Collection One and one in Batu Ferringhi.
In KL both are Mont Kiara, which are rented out. The rents are ok fetching around 6%. Both places are similar price and Many westerners and Japanese residing there in Penang and Mont Kiara.
Penang market is hotter than KL and locals have high purchasing power. Many flats have to queue up few days ahead to buy for those 500000-800000 ringgit price range.
http://www.theedgeproperty.com/news-a-views/9560-overnight-queues-for-vertiq-condo-launch.html
The price of Penang is also moving fast as base is low.
There are also a lot of super condos from 5000-18000 sq ft nowadays. Even at 500 RM psf, these are not cheap as it is huge. However, all have reported to been sold as well when called.
The other projects such as Andaman at Quayside and By the sea are selling RM 1100-1500 psf.
And the threshold has just been increase to 1 million ringgit for foreigners since July 1. It is the most expensive place for foreigners to buy in Malaysia. In KL only RM500000 upwards you can buy.
In Penang,RM 1.3 million can buy a very nice luxury condo over 2000 sq ft, is even cheaper than Jakarta, Medan or Bangkok , Manila
http://malaysia.curiouscatnetwork.com/tag/condos/
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Yes the increase in price entry means need to buy a bigger flat. Like 2000 sq ft instead of 1000sq ft.
For 500000-1000000, if any foreigner are from malaysia my second home program, they can buy maximum 2 units.
It means that for genuine mm2h holders can buy that range. http://pickofpenang.blogspot.hk/2012/06/property-purchase-thresholds-foreign.html?m=1
For foreigners with a limited budget with genuine interest in applying second home
The mm2h is not hard to apply just place a small term deposit of 150000 ringgit in bank for 50years old and above , and show assets of 350000 ringgit and income have 10000ringgit per month.
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The rental market for mont kiara, KL is swift. If your price is 10% cheaper, with fully furnish, you will rent it out within days. The yield for 1000-2500 sq ft is about 5-7% but if over 3000 sq ft it will be hard to rent and also the yield would be lower to 3-4%.
In Penang it's about 5% and here is interesting as there are some retirees renting . I rented one 5000 a month to a retiree from Japan and he paid one year 60000, the home was 1.1 m, so the return is ok.
Expats gets rm 3k to 6k allowances to rent. Locals do not rent.
And you have to choose those suburb with international
Schools. In penang island there's 7. Mont kiara 3. And there needs to be MNC and big companies within 10 km radius from working area.
It's easy to kick out tenant as if no rental can call police and do lock ups. All rental agreement are stamped like HK . KL more easy to rent however note more condo coming to the market, and Penang is less easy to rent, but the upside potential is much higher since the land is scarce.
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Remmy
12 yrs ago
Probably not a bad buy, but there is soooooooo much available land in Malaysia - so in that sense it very different to HK or Singapore.
Also, and without trying to offend people, its a Muslim country, and this is going to deter some people from living there, for a range of reasons. The food in Malaysia in general does not come close to the quality of HK or Singapore, nor does the service.
Overall, for people already with several apartments in HK, its worth a punt. I would go for either Penang or KL.
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Good comments, Felix:
"...Penang is less easy to rent, but the upside potential is much higher since the land is scarce."
====
Where would you buy in Penang?
What do you think of the Light project?
How about renovating an old house in Georgetown - any rental demand there?
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The old houses in Georgetown unless you convert to a hotel , otherwise the rental is bad.
Many people buy old houses but cost a fortune. And landed need to buy 2 million and no mortgage and also have to renovate immensely.
The places residential suggest to buy in The Light and Pearl Regency , or Gurney Paragon for the rich. Those are convenient and easy to commute . If you Want holiday feel , suggest Batu ferringhi area.
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The Light is a good project suitable for locals and foreigners
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I Agree:
Batu Ferringhi is nice, but isolated - And a long commute if you have to be in Georgetown, or a factory or office near the airport everyday.
We liked the area around Straits Quay - but it could be a sitting duck for a future Tsunami. Also the houses there were build on Land Fill, and may show cracks
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Straits quay is nice however price is1200 rm up to 1500 rm per sq foot, which I think is a bit too agressive.
It is targeted to Japanese mostly. It's at the top price range at the moment. It's almost double price of tanjung bungah and Batu ferringhi new condos. Even more costly than gurney drive.
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Yeah that's too much.
We visited them when we were in Penang a year ago, and liked the location on top of the shopping mall, but found the flats to be mostly small and dark - considering the cost.
If one looks around, it ought to be possible to get a nice Condo in Penang at RM 1,000 psf or less, don't you think? I also think it might be a good market to look for secondhand properties, and make "lowball" bids, maybe 15-20% below asking prices. New looks expensive
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Second hand many legal fees and also need pay commission.
And is not cheap. Need 500-600 Psf. Not so top notch.
Why not buy The light it's still around 600, it is few times bigger than straits quay.
And if has everything. It's starts only 600 Psf and have choice of to be completed and those construction in 2015
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Good points.
A bit to close to the water for me - I wonder: Will it smell?
But it might be a decent investment nonetheless
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The sea in Penang doesn't smell. And the light is on the east side is better as no tsunami. The straits quay area is prone to tsunami. There are cheaper Psf like infinity or moonlight bay Batu ferringhi, but these are big in sizes around 3 million. Even south side southbay plaza I saw some units selling 900-1100 Psf . It's near the second bridge.
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I know that.
Have you seen the video showing the look of the completed project?
/see:
There are something like canals running through the project, and these are bound to have some stagnant water. This would be my concern, that is could be a breeding ground for insects, or a place where garbage might collect.
That would destroy the look of the place.
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I know that.
Have you seen the video showing the look of the completed project?
/see: http://www.thelightwaterfront.com/collection_three/
There are something like canals running through the project, and these are bound to have some stagnant water. This would be my concern, that is could be a breeding ground for insects, or a place where garbage might collect.
That would destroy the look of the place.
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There would be corals and fishes. It is Saltwater and it is fresh water。The management fee is highest in Penang ,39 cents psf so I think it is top quality. it has 7 pools and inside it has many Eco tourism facility. It's first building in Penang to receive Green Building Index by Malaysia.
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That's a good sign then.
I hope thy can keep it pristine
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I opted for a unit at Quayside, next to Straits Quay. The light looks ok but its south of George Town instead of North, less well known area for expats and tourists
I won't be worrying about tsunami's, even the big one that came was weak compared to what it did to Thailand, Penang is pretty shaded by Indonesia
You can get a lot of home for your money in Penang but its getting pricier there, however you can still get the home you can only dream of in HK
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Malka
No, sorry I meant the Light (as in light waterfront, mentioned above) is located south of GT. The more popular expat areas are north of GT, (Tanjung Tokong, Tanjung Bungah, Gurney and BF)
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The light new video on its green concept. It is going to be a beautiful project. Many many HK people bought The Light. It explains the self sustaining waterways and canals that are unique, plus the wind turbine. Is amazing how it could be sold at only 600-1000 max Psf
：
https://youtu.be/XV3Kg5leSCk?si=SkXO-BZKTjiB8iEO
And the next city center will be there.
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Ed
10 yrs ago
Just reading though comments on DT and saw this involving Penang...
China is starting to crack. This is going to be one of the biggest " credit events " in history as the second largest economy on earth receives a margin call it cannot possibly meet. The Fed has casually let the greatest emerging markets bubble of all time inflate because they just didn't know or care. Thailand was issuing ten year bonds at only 100 basis points over US treasuries, and fools were buying them. Fools like Amundi, a fund manager owned by zombie bank Credit Agricole, with a trillion dollars under management, whose Singapore office warbled on about seeing value in Thai and Malaysian government bonds. These guys have loaded up on bonds issued by third world countries in local currencies. Prime credits - not. A nice way to lose half your money when those crappy low-coupon bonds trade down to 65-75 cents on the dollar with a bonus double whammy as the baht and ringgit lose 20-30% of their value against a strengthening greenback.
Mark-to-model fantasy accounting will save fundies like Amundi for a while, until the redemptions start to rise as people want their money back. Then you are going to have to sell those wonderful Asian bonds... to some vulture fund run by a canny billionaire like Carl Icahn who has forgotten more about finance than some 34 yo Sorbonne graduate sitting in an aircon Singapore office will ever know.
Take a look at the Penang skyline. It's an unending sea of new high rise apartment towers as far as the eye can see. Condos priced at US$300,000 and above are selling off the plan to speculators with as little as 1% deposit. The local Malaysian banks are gleefully financing this madness and will more than likely need a government bailout to stay solvent.
I'm not even going to start on Thailand because I could be typing all night. Condo construction galore and an 80% consumer debt to GDP ratio do not bode well for the near term future in the land of smiles. Continued political tension is a given.
Thai-Chinese business tycoons have also been loading up with debt priced in dollars. I hope they have hedged the currency risk, but wouldn't count on it. The two richest families have borrowed $27 billion in total and gone on an acquisition spree. Siam Makro, F&N beverages, and a stake in China's Ping An insurance company, were the targets. Banks including HSBC and Standard Chartered helped to fund the takeover binge.
Ping An have just built their new HQ, a 115 storey supertall in smoggy Shenzhen. In fact, it's the tallest building in China. Enron, Bear Sterns, and General Motors also built themselves impressive new headquarters... right before they collapsed. Could Ping An be China's AIG?
Time will tell. One thing is for sure, there will be no shortage of commercial real estate for lease for the next decade or two in the middle kin
http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100026893/emerging-markets-face-ordeal-by-fire-as-feds-janet-yellen-turns-tough/
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"Ping An have just built their new HQ, a 115 storey supertall in smoggy Shenzhen. In fact, it's the tallest building in China. Enron, Bear Sterns, and General Motors also built themselves impressive new headquarters... right before they collapsed. Could Ping An be China's AIG?"
Lots of over investment in real estate for sure and some of it is bound to end badly for investors (and lenders and developers) but the above is an example of what I call the phallic symbol fallacy. Sure many several companies have built large impressive buildings at the top of the market and then gone bust (Reichmann brothers/Canary Wharf and what is now the Lippo Centre in Admiralty can be added to the list) but a much larger number of companies built large office buildings for themselves at or near the top and carried on. Some examples in Hong Kong: Cheung Kong Centre (1999), Jardine House (1973), Hutchison House (1974), SCB Building (1990 - construction started shortly before the 1987 crash), BOC Tower (1990 - construction started in 1985), IFC II (1997 -2003) are just a few examples that come to mind. The companies that put these up are all still around and have been very successful.
What the examples you gave have in common are that they all carried too much debt - debt that the couldn't service when things when wrong as they inevitably will from time to time (except in Gordon Brown's parallel universe). Lehman was geared 40+ times - and had the hubris to claim that they were good at managing risks. The rest of your examples were all too highly geared as well.
As for Ping An, it's balance sheet is here: http://www.irasia.com/listco/hk/pingan/announcement/a121030-e_02318ann_20140313.pdf
Disclosure: I hold shares in Ping An (HK:2318)
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My biggest worry concerning Real Estate in the very long run, is the falling birth rate.
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Malka,
Your point makes sense, but I was actually thinking about the GLOBAL Birth Rate in the VERY long term
> see: http://www.greenenergyinvestors.com/index.php?showtopic=18912
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