Is Penang’s property growth sustainable?

We’ve just finished analyzing the results for the 3rd quarter Malaysian Housing Property Index (MHPI) property report (until September 2011), compiled by the National Property Information Center, NAPIC. Malaysian Housing Property Index is an index of all-house prices in Malaysia. These are reports available for public on a quarterly basis. All information is based on secondary or sub-sale residential property transactions, meaning, buying and selling of existing residential properties in Malaysia.

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We will be running a series articles to highlight the interesting findings that we’ve obtained from report. For your reference, the data will be taken in reference from year 2000 onwards until 3rd Quarter 2011. We will also do some data comparison with post 1998 periods.

In this current article, we will be highlighting on Penang. In summary, it can be said that Penang, as a whole is experiencing a healthy property market, with prices increasing on an average of 6% for the period of 2009 to 2011. In comparison with the highs of 1995-1996 and 1992-1992, 6.0% capital appreciation is relatively low, and doesn’t show an unsustainable growth for the state of Penang.

Let’s look at Penang’s standing in the national standings, referencing the average house prices in the country. Looking at the statistics, Penang’s prices are at an average of RM232k. Comparing this with the national average of RM209k per unit, Penang is among the other states where property prices are higher than the national average.

One of the questions that arise from this analysis was the fact that Penang’s data takes both housing prices in the island state as well as the mainland properties.

The final chart we would like to highlight would be the property prices in Penang Island as compared to the mainland. Looking at the chart below, if you were to do a comparison study with regards to the prices, since 1999, until 3rd quarter 2011, you will notice that the appreciation of residential property prices have been significantly higher in the island state as compared to the mainland. Residential properties in the island state have seen a substantial growth exceeding 100%, since 2001.

We suspect that the figures could be higher, as the information pertaining to residential property growth doesn’t include statistics from primary market sales, or properties from developers.

In the next article, we’ll look more into the national statistics to measure if the current growth is sustainable or not.

For those of you who are interested to know more on our studies, we would like to invite you to our property talk, this coming Sunday, at Vistana Hotel, Penang.

For the first 17 people who sign up for the talk will receive one complimentary book from Ho Chin Soon. To register your seat, please visit www.aboutpropertyinvestment.com

By FREEMEN

FREEMEN is an organization that has been training investors since 2008 to benefit from any market and helped 200 individuals to invest in over RM30Million worth of properties, ALL with no money down! There will be a workshop this coming Sunday, 4th of Dec in Vistana Hotel, Penang entitled “How to achieve your financial freedom in 5 years of less” from 1:00pm till 6pm. Book early as we will be expecting a full house.