Thanks to Michael Geh, the Senior Partner of Raine & Horne, we have this chart comparing the number and value of transactions by category of market in Penang from 1H2010 to 1H2013. We can see the actual sudden increase was from H1 2010 to H1 2011. The primary market transactions grew nearly 700%! This however went down in 2012 and for 2013 it went down further. Thus, if we look at the number of units which are completing soon or completed, it should happen within 2014 / 2015. I just remembered on top of my mind I have a few friends who bought The Golden Triangle which will be completing in 2014. Two bought it for own stay; upgrading from their current smaller units while 5 others are investors. Due to the price they paid which is less than RM350,000, the profit is quite certain. It’s only whether they would be willing to sell it cheaper than the current typical pricing. That’s the question.
When we look at the most recent H1 2012 vs H1 2013, the total transactions went down 28% while the value of transactions went down just 4.4%. In other words, prices continued to increase despite fewer units sold. When we look deeper into just the primary transactions, it has nose-dived 60% and yet, the value has gone down by just 17%. In other words, prices of primary property transactions has gone up a lot. Perhaps too much for comfort. Perhaps time for a rethink of what to launch for the developers.
The number of secondary transactions went down by 14.5% and the value went down by nearly 1% which meant that prices has actually inched up by double-digit within past 1 year for secondary market. This is still quite significant though no comparison to the primary market.
I still think if you are getting a place to stay, it does not matter whether it’s secondary market or the primary market. Thus, if we look at the monetary side, I think the answer is clear, perhaps you may want to think about buying a secondary instead of buying new.
written on 18 Jan 2014
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