Friday, June 5, 2015

Ipoh property market

Ipoh property market


Malaysian Business Magazine
A Glitter in the forgotten city.
MALAYSIAN BUSINESS | May 01, 2011 | Copyright



Cheah Chor Sooi stumbles upon Ipoh as a value-for-money real estate prospect
Mention Ipoh to any seasoned real estate investor and the state capital of Perak is likely to be perceived as a 'forbidden city', no thanks to the snail-pace appreciation in investment value compared to neighbouring cities, notably Penang and Kuala Lumpur.
But that perception may no longer be valid. Developers are now stepping up a gear by delivering products that the market was longing to have for ages. Good value developments such as The Haven, The Enclave, Parklane @ Bandar Baru Sri Klebang, Meru Valley Resort, Sunway City Ipoh, Racing Circle and The Thompson are now catering to the needs of today's discerning buyers/investors.
'Products that are churned out recently are innovative, current and up to expectations of a well-travelled individual,' Gladwin Agilan, Sales Director and Senior Negotiator at D. Henry Valuers Realtor, tells Malaysian Business.
'Not only has such positive development resulted in a better pick up rate, it has enabled developers to command premium prices,' adds Agilan.
A case in point are bungalow lots at the Meru Valley Resort, which are currently trading at RM38 per sq ft at average and RM50 per sq ft at maximum. Spawned within an award-winning 220-hectare golf resort that features a 27-hole golf course, prices of the lots are slowly inching their way to RM60 per sq ft over a year or two (rental yield is currently in the 8% to 10% range).
With the emergence of the Electric Train Services (ETS) that connects Seremban/KL to Ipoh, (the service will eventually be extended to Thailand and Singapore) and a more active airport (Sultan Azlan Shah Airport), Ipoh seems to have inched closer to the Federal capital in terms of distance.
These aside, there are signs that Ipoh is moving towards becoming a full-fledge city with the mushrooming of retail and F&B (food and beverage) outlets, affordable healthcare as well as reputable schools and colleges that may entice Ipohites who are outstation or overseas to return to their hometown.
Peter Chan, Co-Principal of The Haven Sdn Bhd, developer of Perak's first luxury condominium, opines that Ipoh is gaining prominence as a property investment destination for three reasons:
* Property prices in KL and Penang have spiralled substantially in the past years,
* Density and traffic in both KL and Penang are at near untenable levels, and
* Land scarcity has led to an oversupply of high-rise dwellings in both cities.
'Beyond that, the city boasts affordable living cost, which can be attributed to the lower cost of property ownership and definitely, for gastronomic enthusiasts, good food,' Chan points out.
Current Market
In the words of Datuk Francis Lee Yew Hean, Chairman of the Perak branch Real Estate and Housing Developers Association (REHDA), there is virtually no speculative buying of residential properties in Perak on account of the relatively low rental yield and the low capital appreciation potential.
From the perspective of affordability, anyone with a gainful employment is a potential purchaser. Not only are properties in Ipoh relatively cheap by cities comparison within Malaysia, they have a lot of upside potential by way of capital appreciation over the longer term.
Today, the demand for residential properties in Ipoh is predominantly based on effective demand for home ownership. 'However there is a small percentage of investment buying that is premised on the laggard pricing of residential properties in Ipoh when contrasted with prices at other urbanised cities in Malaysia,' asserts Lee.
In the residential marketplace, Ipoh offers various types of properties that cater for the varying income categories of house buyers. They can be in the form of first home ownership or house upgraders and the property purchase can vary from low-cost, low-medium cost, medium-cost to higher end housing.
A remarkable progress is that the city has caught up with development of high-rise residential units although condominium living is still confined to a niche market sector and represents less than 2% of total residential housing stock and annual deliveries.
In a nutshell, the price of vacant residential land in Ipoh ranges from about RM90.00 per sq ft for bungalow lots to a low of about RM15.00 per sq ft pending on location. Land with restriction of interest on title such as those for low-cost or medium low-cost housing fetches an even lower pricing.
'The average price of a double storey terrace residential house in Ipoh currently is about RM240,000,' rationalises Lee.
Economic reality
Following the tin crisis of October 1985, which saw tin prices tumble from RM32,000 per tonne in the late 1970s to less than RM17,000 per tonne, and its concurrent adverse effect on the economy of Perak, there was insufficient job opportunities for those coming into gainful employment.
Such phenomenon has compelled a percentage of forced regional migration during this period, particularly to the Klang Valley and Penang. But given that a thriving property industry is inevitably linked to economic opportunities, a concerted effort by both the public and private sectors to revive Ipoh's past glory as a prosperous tin mining town is perhaps the best action plan to correct the current perception of Ipoh as a sleepy hollow.
Free from the hustle and bustle of city living, Ipoh has every potential to become medical tourism and educational hubs provided serious thoughts are given to proper planning. In recent times, new higher learning institutions have sprung up and parents can now educate their children locally, unlike say five years ago when the kids had to be sent packing to KL or Penang.
Ipoh's potential as a tourism hotspot is obviously second to none given the existence of many historical sites and natural attractions that have not been fully explored - the limestone caves, the waterfalls, the parks, the forest, the hills and the (pomelo) orchards - all of which need to be marketed more effectively and cohesively.
Moreover, with its slow pace of life, less hectic living conditions and minimal traffic congestion, Ipoh also has every potential to excel as a choice venue for a retirement home or in wooing participants of the Malaysia My Second Home (MM2H) programme.
In this regard, authorities should also make changes to the ruling that foreigners can only be allowed to purchase properties above RM500,000. As a linked home in a resort fetches around RM300,000 to RM380,000, such ruling can be deemed as a deterrent.
'Lacking in publicity, the relevant authorities should campaign Ipoh's strengths which comprise scenic hills, wonderful food and low-cost but high value living conditions,' stresses D. Henry Valuers Realtor's Agilan.
'More so, the State Government should incorporate representatives made up of property developers to showcase developments in Ipoh side-by-side the state's tourism allure when campaigning abroad.'
Take-up rate
Perak has a population of 2.26 million as at 2010, according to the Preliminary Count Report 2010 of the Population and Housing Census Malaysia. For the period 2000 to 2010, the state had a population growth rate of 1.35%, which is low if compared with the national average annual population growth rate of 2.17% for the corresponding period. According to Property Market Report by the Valuation and Property Services Department of the Finance Ministry, the total annual deliveries of residential properties for Perak for the years of 2007, 2008 and 2009 stood at 9,474 units, 6,412 units and 8,496 units respectively.
During those periods, the total number of residential property transactions in the state - including both the primary and secondary market - averaged at about 22,000 units per annum with a gross value of about RM2 billion per annum. In both units and value terms, the bulk of the annualised transactions were in the RM50,000 to RM250,000 category (low-cost, low-medium cost and medium-cost housing segments).
Although official figures for 2010 have yet to be released, REHDA Perak expects residential housing deliveries for 2010 to be in the region of 11,000 units. For 2011, it sees a surge in confidence by both the housing developers and purchasers, and this will be reflected by way of an increasing delivery and total transactions in the primary market.
'We would anticipate total deliveries into Perak for 2011 to be in the region of 12,000 units,' REHDA Perak's Lee points out. While Perak has an area of 21,035 sq km and a population density of only 107 people per sq km, it is wrong to surmise there from that Ipoh is therefore land abundant.
In the present six km developmental radius around Ipoh, there is very little land available for housing development. This boundary limit is now being extended to an eight to nine km radius.
The Haven
A luxury eco condo-tel, The Haven is fast changing the mindset of Ipohites about high-rise living. Due for completion in 2013, the RM250 million lakeside development boasts three blocks of 26-storey luxury condominiums (497 units).
Developed by The Haven Sdn Bhd, a subsidiary of Superboom Projects Sdn Bhd, The Haven is poised for completion in 2013. The size of the units range from 968 sq ft to 5,350 sq ft and are priced from RM389,500 to RM2.32 million.
MontBleu Residence
Sunway City Bhd's maiden townhouse development in Ipoh, MontBleu Residence comprises 220 units of well-planned and modern three-storey townhouses that are surrounded by lush greenery with a 25-ft wide backyard garden.
Spanning over 4.4-ha with standard intermediate built-up from 1,889 sq ft to 2,066 sq ft, the projects boasts a Gross Development Value (GDV) of RM93 million. Selling prices started from RM272 per sq ft (RM399,000/Nett Floor Area of 1,462.5 sq ft) back in September 2010 for the first phase which comprised of 56 units.
The second phase of 42 units were released to the market in January 2011 at RM299 per sq ft (RM437,800/NFA of 1,462.5 sq ft). The development is due for completion in September 2013.
Hill Top Residences
Meru Valley Resort's premium series of modern resort homes comes with three designs of detached homes with built-ups starting from 3,951 sq ft and land size from 6,000 sq ft.
Named Asia Pacific's Best Golf Development 2008, the selling price of the properties ranges from RM988,000 to RM1.2 million. This RM25 million development has its own guardhouse with patrolling security for its 32 homes.
Bandar Seri Botani
Bandar Seri Botani is the most ambitious property development by Taiko Group of Companies. Sprawling over 480 ha of former plantation land, this fully integrated township development boasts a GDV of RM1.5 billion with 28 phases already launched to date.
Discerning house buyers can choose from a dazzling selection of over 6,000 units of bungalows, semi-detached houses, townhouses and link homes, most of which are located amid lush and green landscaped gardens.
Bandar Universiti Seri Iskandar (BUSI)
Located about 45 minutes away from Ipoh, the 335.2 ha township is centrally located in the heart of Perak's new administrative and educational corridor. This mixed development project encompasses double storey shop offices, double storey terrace houses, link homes and double storey semi-detached house priced from RM173,000 upwards.
Developed by Agro-Mod Industries Sdn Bhd, a subsidiary of Hua Yang Bhd, BUSI is located within close proximity to educational hubs such as University Teknologi Petronas (UTP), University Teknologi MARA (UiTM), Kolej Professional MARA and the Institut Kemahiran Belia Negara (IKBN).

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