Penang property (condo) – Buyer’s market today

My friend asked me if she should wait for the market prices to drop further. She was buying her first property, for her own stay. I told her, I seriously think currently you have the upperhand. The total transactions has gone down so much that I think some sellers may be pressured when they read about news in the market that there are potential bubbles building up, transactions for Penang properties down over 30% year on year and there has been quite a lot of new condos flooding the market recently. This meant that the negotiation powers of sellers are weak. This is especially for new projects because at the same time, there are so many sellers / units being put into the marketplace.

She said that the prices are still high. I told her, if she is serious, after viewing the unit, offer a price she thinks is reasonable for the property. In fact if  she wants to try her luck, give a number which is even below what she believe the market price to be. Who knows, the buyer may want to part with the property due to the many uncertainties and also the new RPGT rates which will come into effect next year. She has viewed quite a number of units and I believe she will decide the ones she really loves and will give her offer soon.

For market prices to continue to go down, the prices must be so high that no one could afford and there should be a world crisis. At this moment, no matter which media you read, there has been a lot of pessimism. The demand must also be weak or else the prices cannot continue going down. For example, current price is RM500,000 and the condo is in a good location and the developer is a reputable one. If the price comes down 10%, what would happen? Well, a lot of people would enter the market and buy the units because they really needed a place to stay. Would there be a chance for the property to drop further to 20%?  I think you know the answer. No idea how long it can last but for condo market (Penang), especially new ones, I think it is buyers’ market currently.

written on 22 dec 2013

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3 thoughts on “Penang property (condo) – Buyer’s market today

  1. My friend faced an issue on property. After viewed few property, finally, she decide to buy the property that she like. The house owner sell her in RM350,000 follow the market price. She paid 10% down payment which is RM35,000. She apply loan RM315,000 with bank. However, bank only approved her loan in RM250,000 with the reason this house value in bank list is worth RM250,000.Then my friend asking me, market price is RM350,000 as everyone well known the price. How could the bank list only stated worth RM250,000. Isn’t another RM100,000 is just the property bubble? End up, she didn’t take the house, because of insufficient down payment. What is your opinion on this?

    • House prices went up faster than bank valuation. If angry really feel that the market price for that property is rm350k, she can get a valuation report from licensed valuers. Just pay the usual fee. The bank normally would accept the report. Anyway, banks in Malaysia are much stricter due to Bank Negara, this is definitely better for a healthy market. She can go back to seller and nego the price as seller surely can’t sell at 350k due to valuation. Unless buyer super rich and pay extra and borrow lesser from bank.

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