PROPERTY SNAPSHOT 4: What’s hot in Mainland Penang?

•    Today, we look at price growth and indicative asking rental yields for non-landed residences in Mainland Penang. From analysis of transactions by TheEdgeProperty.com, the average transacted price for non-landed residences in the secondary market was RM192 per square foot (psf) in 1Q2015, up 23.4% y-y.

•    In the 12 months to 1Q2015, the capital values in most projects have either held steady or appreciated. The average transacted price at Ria Apartments in Butterworth appears to have grown the most, with Pearl Tower’s prices up 36.5% y-o-y and Jade Tower’s prices up 30.3% y-o-y.

•    Elsewhere, the highest percentage growth in average prices can be observed at the lower-end segments due to the low capital base. In the mid-end segment, Pinang Laguna registered a 19.9% y-o-y growth in average prices, from RM255 psf to RM306 psf. Prices at Pinang Laguna are benchmarked to prices at its slightly newer neighbour, Palma Laguna, which registered an average price of RM316 psf in the 12 months to 1Q2015.

•    Indicative annual rental yields as calculated from asking rentals observed at June 2015 are fair, ranging from 4.0% to 7.5%. The highest asking rental yields can be found at Pantai Apartment (7.5%) in Butterworth.

•    With numerous public transport and infrastructure projects planned such as an LRT line linking Georgetown to Butterworth, a Monorail line from Raja Uda to Alma, a Bus Rapid Transit (BRT) line from Permatang Tinggi to Batu Kawan, and a Penang Undersea Tunnel; the mainland property market will become an increasingly viable alternative to more expensive properties on the island.