GEORGE TOWN, Jan 8 — The general outlook for the property sector in Penang was positive but less so in Johor Baru and Kota Kinabaly, according to Knight Frank Malaysia’s Real Estate Highlights for the Second Half of 2018.
The residential sector in Penang continued to lead the property market in the state with a 5.4 per cent increase in transactions in the first half of 2018 compared to the same period of 2017.
“This trend is expected to continue,” the report stated.
According to Knight Frank Penang executive director Tay Tam, the residential market will continue to improve especially in the landed housing market.
As for the office sector, it continued to record stable rents and high occupancies although the overall occupancy rates in some buildings have dropped marginally.
“This favourable state of affairs is expected to continue for the next few quarters as new supply is only expected to come on-stream beyond 2020,” the report stated.
Similarly, the industrial sector continued to experience strong demands in both the rental and sale markets.
Tam said the industrial and office property markets in Penang will continue to perform well.
“In contrast, the retail market is expected to be more competitive in 2019 due to the entry of new supply such as Ikea Batu Kawan,” he said.
He believed that the proposed Penang Transport Master Plan (PTMP), which comprises the Pan Island Link highway, the Bayan Lepas light rail transit (LRT) system as well as several major roads, will boost connectivity in Penang which will be favourable for the property market.
The improvements and expansion of the Penang International Airport and Swettenham Cruise Terminal and duty-free cruise centre will also spur tourist arrivals.
These factors are also expected to have a positive impact on the state’s economy and retail sector.
Down in Johor Baru, the overall market performance was generally quiet in the second half of 2018 with lesser market activities particularly in new launches and transactions.
The report predicts that this trend is likely to continue into the first half of 2019 for the residential market in Johor Baru where supply from new launches will consist mostly of landed units.
Knight Frank Johor’s branch head Debbie Choy said despite the challenging market, landed housing with reasonable prices ranging from RM400,000 to RM500,000 are expected to fare well among homebuyers.
“The industrial property sub-sector is still expected to fare well as investments in the logistics and manufacturing sector remains at a healthy level,” she said.
She said the economic region of Iskandar Malaysia had recorded a cumulative investment of RM272.90 billion as of the third quarter of 2018 which is a testament that robust investment activities are still present in the region.
As for Kota Kinabalu, the second half of 2018 saw fewer residential property launches as developers review and reposition their products in a highly competitive market.
The report stated that overall residential market is expected to remain stable but challenging.
“The increasing supply of residential properties, particularly high-rise units, is expected to exert pressures on the capital and rental markets for residential establishments that are located within areas with weak occupational demands and higher rate of project completions,” the report revealed.
Knight Frank Kota Kinabalu executive director Alexel Chan said the continued growth of Sabah’s tourism and hospitality sector coupled with the government’s commitment in delivering Pan Borneo Highway will help to spur Kota Kinabalu’s property market in 2019.