Uncertain outlook for Penang real estate market

The real estate market outlook for Penang till the end of this year seems rather uncertain due to weak market sentiments in both the primary and secondary markets. This is expected to lead to poorer performance this year, according to Henry Butcher Malaysia (Penang) Sdn Bhd.

In its “Penang real estate market: Opportunities despite weak sentiments” research report for 2Q2016, the property consultancy expects the volume of transactions to decline further. Strict lending policies implemented by banks have also resulted in higher loan rejections.

In 2015, the total volume of transactions saw a dip of about 4,000 transactions compared with 25,555 units recorded in 2014. The residential market was the most active sub-sector in 2015, capturing 71% of the total volume.

The volume of residential transactions in 2015 saw a drop of 16% from the previous year.

However, demand is still strong for projects with catalytic components such as well-planned businesses and transit-oriented developments that provide connectivity and accessibility,” said Henry Butcher Penang in the report.

According to the report, investors and homebuyers are now more careful in their selection of properties and are more comfortable buying from developers with good track records.

“Properties at the right location in well-connected areas with good infrastructure and public transport are influencing their property purchases,” it said, adding that developers are offering incentives and special sales packages to attract potential buyers.

“The prevailing buyers’ market have influenced sellers to accept more reasonable prices and there will be fewer speculative activities in the market.

“This gives buyers more choices due to the increased supply of secondary properties for sale,” it said. Meanwhile, in the primary market, there will be more emphasis on affordable housing in Penang. - The Edge Property

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