A softening housing sector

The property market in Penang experienced a slight decrease in sales for the first three months of 2009, compared to the previous corresponding period, and the housing sector is likely to soften further by end year.

Although there is a drop in sales, there is no corresponding decrease in property prices.

Henry Butcher Malaysia (Penang) director Dr Teoh Poh Huat says at this juncture there were no symptoms of a “fire sale”.

“For sub-sales, some owners are asking for a lower price to attract buyers. However, current sentiments suggest that the property market will become increasingly soft by the end of 2009,” he says.

Presently landed properties in Penang are still holding firm at RM600,000 to RM700,000, depending on the location and size of the properties. Mid-end high-rise properties are still priced between RM300,000 and RM400,000 for a 1,000sq ft unit, depending on their sizes and location.

The price of super-condominiums still hovers between RM2mil to RM3mil.

The total transactions in terms of sales volume and value in Penang for 2008 are expected to be at least 20% lower than 2007, although the finance ministry had yet to release the official figures.

Teoh says the high-end category was more vulnerable to the global economic climate because the owners were now under pressure to seek suitable tenants or a divestment opportunity.

“Rental returns from the high-end properties are also rather low.

“It is now a buyers’ and a tenants’ market for the high-end property segment in Penang.

“Expatriates are now spoilt for choice,” he says.

Teoh says the mid to high-end segment was quite sustainable, due to the demand from the young population in Penang.

Real Estate & Developers Housing Association chairman Datuk Jerry Chan says the price of properties in Penang would not plunge drastically.

“This is because prices in Penang have moved upwards gradually between 7% to 10% per annum over the past five years, unlike the KLCC area where property prices doubled during the period 2006-2008,” he says.

Chan adds that developers were now dishing out free legal fees on sales and purchase agreement, free legal fees on loan, and other easy payment terms to roped in buyers during this challenging market condition.

On the mainland, there is a 20%-30% drop in property transaction for the first three months of 2009, compared to last year’s corresponding period, due to the uncertainty in the prevailing market and the caution banks are taking towards loans.

Prai-based Kington Real Agency business development manager Frankie Soon says however, there was no corresponding drop in prices.

“The single-storey terraced properties are the most popular in Seberang Prai.

“However, developers are not building that many because they are not profitable,” Soon says.

In Alma, Bukit Mertajam, there are some developments of new single-storey houses with built-up areas of 1,300sq ft, priced between RM140,000 and RM150,000.

Such terraced houses priced below RM150,000 are popularly found in Batu Kawan, Simpang Ampat, Kepala Batas, Penaga, and Alma.

Developers in Seberang Prai are now focused on building two to three-storey houses, priced between RM250,000 and RM290,000 for the double-storey terraced, and between RM330,000 and RM380,000 for the three-storey terraced.

Another trend in Seberang Prai is the increasing popularity of high-rise properties, priced between RM120,000 and RM200,000.

“These properties are usually found in Jalan Raja Uda, Bagan Dalam, Teluk Air Tawar, Kampung Gajah, and Seberang Jaya.

“They are popular because of the affordable pricing and are equipped with clubhouse facilities.

“Their value appreciates between 15% and 20% from the time the sales and purchase agreement is signed and the time when the project is completed three years later,” Soon says. - The Star


March 29, 2009 at 11:06 PMTai Kung

Who are you kidding, developers??

March 29, 2009 at 11:08 PMTai Kung

Who are you kidding??? Price posted in advertisement may look the same, but in fact, bigger discounts have already been offered throughout the real estate market. Even landed properties in Penang are not spared. Don't hope. In months, you will see the deflated prices slowly unleashing!!

March 29, 2009 at 11:31 PMKK88

Tai Kung,

There might be isolated case of some firesales. But its very little case only. Do let us know if you found landed property which are sold for less. I'm very interested to buy. For all I know, most landed still selling at >RM500k (double storey).

April 1, 2009 at 9:23 PMTai Kung

Why should I let you know? Look it up yourself. We don't need speculators like you!

May 2, 2009 at 9:37 PMpockaroo

You have to look at who is doing all the talking here? He is realtor company and this is nothing but a classic case of "talking the market up"

Wanna to know how discounted it gets - just look up the bank auction lists. You can be sure that list will be growing a lot faster this year.