By Jerry Francis
Ipoh is a choice location now, especially for those planning their retirement. It is just about two hours drive to Penang and Kuala Lumpur. It is linked to the Federal Capital by an efficient electric train service and by air to Singapore.
The city is also becoming a hub for academic and medical studies with universities and colleges located close by.
Therefore, it is not surprising that the property market in the city is experiencing an annual appreciation of 10% to 15%, creating a good climate for investment in properties.
About a decade ago, one rarely heard of a residential property in the city having a seven-figure price tag, but now it is rather common. High end property, such as the Thompson Flora Tropika Residences where its freehold bungalows in phase one have risen from RM2.4mil to minimum RM2.68mil and above within the past year, and further price appreciation seems imminent.
“It is a good time to invest in property, especially when prices are increasing nowadays,” commented a housing developer.
According to him, this year has been moderately better for property development in the Kinta district than before, despite the move by Bank Negara last November to introduce a maximum loan-to-value (LTV) ration of 70% for the third and subsequent house financing facilities to curb speculation on property prices.
The developers are convinced that there will only be a temporary setback for the property and banking industry. The loan-to-value will hamper residential mortgage loans growth this year or even reduce residential property prices significantly.
Residential home loans growth might see a slight slowdown as the measure by the regulator would curb speculative investment activities but it will not be drastic, as up to 90% of banks’ mortgage loans are held by homeowners, who are not speculative investors but have purchased residential properties to live in.
There may be further demands for local properties especially the mid-level to high end properties which are normally the playgrounds for investors and speculators, as property prices in Singapore, Johor Baru, Kuala Lumpur and Penang have gone up.
The property demand should remain resilient, supported by positive macro factors i.e.: young population, robust economy, inflation hedging, urbanisation, shrinking household size, and accommodative bank lending.
Mid-level to high end property is in demand. The strong underlying demand from first-second home owners and up-graders continue to support property sales, even at new benchmark prices. The buyers are a mixture of both locals and foreigners.