The "rebound" in Penang residential market

An interview with Mike Geh by Sharon Kam (The Edge Property)

Mike Geh from Raine & Horne International Zaki + Partners senior partner, shares with Sharon Kam about the "rebound" in the Penang residential market.


Sharon : I have with me Mike Geh from Raine & Horne International Zaki + Partners to get his opinion on recent surge in property market in Penang. Hi Mike!

Mike Geh : Thank you, Sharon.

Sharon : What do you think, is the recent "rebound" in Penang market a temporary one?

Mike Geh : Of course not. This surge is cause by pure confident in the property sector as an alternative investment option and also easy availability of credits by fine primary located properties with excellent branding appeals to property buyers since beginning of the year.

Sharon : Who are the purchasers in recent surge?

Mike Geh : Basically there are two groups of property buyers in this current surge. The first group are genuine first time home buyers who are relatively younger and buy their first home and property up-graders who are buying their dream home. The second group are property speculators, the group that buys in bulk and sell them immediately for profits between 50K to 100K each unit.

Sharon : Can you elaborate on these two groups?

Mike Geh : The first time home buyer, they upgrades and buy their dream home and to invest to stay in it. The second group intend to sell them the next instants for a higher profits.

Sharon : Who are these speculators?

Mike Geh : They are basically persons of higher net worth and excellent credit standing and also people in the real estate business who were pampered by developers and encourage by bankers to bulk buy.

Sharon : What does bulk buying mean?

Mike Geh : Bulk buying means a person buying three to ten units per purchase. It also means that they are buying somebody else dream home.

Sharon : Do you think their activity will lead to bubble?

Mike Geh : Sharon, there appears to be a primary residential property bubble emerging.

Sharon : What can we do to nip the situation in the bud?

Mike Geh : To nip this situation in the bud, I suggest that developers encourage the genuine first time home buyer and property up-graders by setting up an exemplary fair and transparent sales system for example buy balloting and overnight queuing. Bankers should that note and notice of the number of homes purchase by in applicant per instant to access the borrower between a property home buyer or a pure property speculator. I believe these mentioned steps can nip the situation.

Sharon : Thank you Mike for giving us your view on the Penang market today. Thank you.

Mike Geh : Thank you Sharon.


October 7, 2009 at 8:42 PMcentral

i dont think speculation is rife in the local property market!!anyway,a healthy and vibrant property market needs the participation of speculators-otherwise it will be a very boring and lacklustre play(look at the moribound and lackadaisal local bourse -when wall street and other asian stockmarkets undergo sharp gyrations in their indices, ours 'managed' to stay literally flat, unchanged ,inspite of the wide and wild fluctuation of other stock markets-it wont be interesting at all for local retail players not to mention drawing international funds to invest or wager in our market

of course when speculators dominate the market pushing prices to stratospheric levels,the market will crashed (read 1997 property collapse in BKK,HK and singapore and the bursting of the property bubble in japan in 1992)

as long as the market is allowed to run on her own with little or no interference from GOMEN,it will find her own level after the spurt/crash. there must be no bailout or else the distortion will precipitate another crisis in the near future(look at USA with massive bailouts for failed financial institutions-who is going to learn the lessons-prudent management will be thrown out of the window-afterall those behemoth are too BIG to fail and the GOMEN will always be there to lend a helping hand)

October 8, 2009 at 9:05 PMBK

Speculators should not be given privilege to select the units first. Speculate can, but have to treated like everybody else. First come first serve.

October 9, 2009 at 9:35 AMUnknown

Agree with BK; the market need to be fair, we (those for own stay) do not want to see like stuffs purchase day, bulk purchase day, soft/pre-launch day, then only actual launch day; We everyone have the chance to select the unit. As long as the property is open for public, it should be first come first serve starting on actual launch day, no booking or transaction before that!

But, can this happen? Will it be one day those own stay buyer can get they dream house with fair value?

October 23, 2009 at 1:24 AMpropertykaki

Agree with all the above... personally my observation is Speculators were welcomed by certain developers way ahead of TrueHome buyers... wat alarmed me is the ratio of Speculator to HomeBuyer.. i believe is 60-70% especially @the most recent near tesco launch..... maybe this blog can do a survey on readers Opinion on this Matter.....