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General Veers
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Sunday October 10, 2010
Struggling to buy first homes
By CHRISTINA CHIN
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AN accountant with a multi-national factory in Kuala Lumpur, Ursula Lee is still harbouring hopes of buying her first property in Penang. “I’m just looking for a decent place, not some luxury apartment, and even that is proving to be a challenge,” says the Penangite who feels she is now ready to buy but is having a problem finding one to suit her budget. “The prices have skyrocketed in Penang, especially in certain locations like Tanjung Bunga and Gelugor’s coastal front,” adds Lee, who has come to the conclusion that “most properties are not worth the current market price”.
Spiralling prices: The public checking out properties at the Star Property Fair 2010. — Filepic
She has opted to rent for now because she feels that it is not a good time to buy property. “The bubble could burst any minute and you’ll be saddled with an overvalued lot,” she says. The 32-year-old regrets not investing earlier when she was still based in Penang. “There was a development in Gelugor overlooking the Penang Bridge that I was considering,” she relates. “That was a few years ago when the property was still under construction and there was no hypermarket or office lots there yet.”
She says a colleague snapped up a unit for about RM300,000 and has just sold it off for more than RM500,000. “My mistake was that I did not see its potential. It wasn’t considered high-end then but looking at the price today, it definitely qualifies.” Lee, who is also looking at buying apartments in Kuala Lumpur, believes it is best to buy property under construction because prices will double once it is completed.
“Property prices in Kuala Lumpur have stabilised but it’s stuck at a very high point,” she says. “An apartment in Damansara that was going for RM350,000 in May is now RM400,000. Apparently, the steep and rapid rise was due to a new high-end development next door.” While checking out the market, she also found that prices for second-hand leasehold apartments are also on the rise. “It used to be that people stayed away from leasehold units but now, even as the lease is getting shorter, the price is getting higher,” says a surprised Lee.
Kimberley Tan, 32, who bought a condominium unit in Bayan Lepas three years ago, says the place is now worth close to RM700,000. She purchased it with her younger brother for RM430,000. Completed last year, the condominium offers an unobstructed panoramic view of the sea with prices ranging from RM430,000 to RM800,000 for 145.1 sq m to 231.4 sq m units. “We are lucky we bought it then because property prices have soared to ridiculous amounts in the last two years,” Tan, a finance specialist, says.
“It’s even harder for young professionals to buy their first home now because prices are higher than ever,” she notes. “New developments are a good buy but you have to get in before the project’s official launch. “The problem is that most developers would require you to buy at least three units at a go and if you wait for the official launch, the units would have been taken up by property investors.” Both Lee and Tan knew from the start that they would not be able to afford buying landed property on the island.
“Unless you are from a two-income family, you can forget about owning landed property,” says Lee. “For a single lady like me, security is of the utmost importance and, of course, you want a fairly nice place. For this, one must set aside between RM350,000 and RM420,000.” Despite this, property prices in Penang are still relatively cheaper than other countries in the region, according to Real Estate Housing Developers’ Association Penang chairman Datuk Jerry Chan.
“Yes, there are some instances where the price has doubled but we are just playing catch up with places like Singapore, Thailand and Hong Kong,” he explains. “We have just come out of a very bad economic downturn so it’s natural for property prices to spike.” He adds that a yearly 15% to 20% rise was not sustainable and that the rate of increase would eventually slow down. On the other hand, he says it has only been a year-and-a-half that prices have been on the rise, so the bubble is not about to burst just yet.
