By: Lim Ben-Jie

Recently however, the market
trend seems to contradict the perception that Ipoh has lost any possibility of
a major appreciation of its property market value. In fact, Oriental Realty
agent Gladwin Agilan described a particular single-story semi-detached house in
Ipoh being transacted at RM144 per sq ft which is relatively high in the state.
Based on this news, demand and supply of housing in Ipoh can be used as a topic
of discussion. Demand is very strong for
properties in Ipoh as seen from the rising prices of homes which showed
appreciation values of up to 30% in the last three years. This illustrates an
average appreciation of 10% a year which is higher than any fixed deposit
account whose returns are based on minimal interest of around 3%. One reason
why demand for housing is rising which translates into higher property prices
is the improved accessibility and connectivity from Malaysia’s federal capital
and from the city-state of Singapore. KTM Intercity train services recently
introduced their fast electric train service from Kuala Lumpur to Ipoh which
hastened the journey between both cities to around two and a half hours. Also,
Ipoh is receiving direct flights from Singapore’s Changi Airport through daily
flights on Firefly Airline. Improved accessibility and connectivity results in
more investors or homebuyers who intend to stay in Ipoh, now giving the
well-known ‘bougainvillea city’ a second look as it has become more ‘reachable’
in their opinions.

In terms of income elasticity of
demand, housing is considered as a normal good as the general population will
purchase more properties when their income rises and purchase fewer when their
income levels drop. Over the past few years, the Mr Galdwin mentions of Ipoh
born locals who migrated to other growing cities like Kuala Lumpur in search of
better jobs elsewhere when they were in their early 20s now returning to the
Ipoh in large numbers to purchase properties as they have found better
employment opportunities in Ipoh and other surrounding areas due to the growth
of new industries in the state that require highly skilled employees. These
locals are now in their 30s and 40s. This resulted in many Ipoh born citizens who
now possess higher disposable incomes due to better employment opportunities, returning
to Ipoh and purchasing properties in the city to live in. Wealth of the locals
in Ipoh is growing at a steady rate.
To sum up, Ipoh has seen and gone
through its worst period since the fall of tin mining which stripped the city’s
title of being the world’s largest extractor of tin ore. Ipoh-lites are seeing
a more positive picture of their city now more than ever as the state
government is striving hard to rejuvenate the state and its capital from its
weak and gloom period not too long ago. Climbing property prices is a good
indication that the city is heading to the right direction once again when seen
from an economic point of view as locals are bound to benefit from its 10%
average appreciation rate that is three times more than our nations inflation
rate of 3.2% in 2011.
0 comments:
Post a Comment