Secondary Property Market – Volume Down, Value Remain

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A close friend told me today that our common friend is looking for a bigger place, preferably over 1,000sf for RM600,000 and in the middle of Tanjung Bungah and Bayan Baru. She does not want Jelutong. I told my close friend, ‘Don’t worry, just wait….. and wait….. and wait…..’. Yet, I feel if she has a chance of buying one which meets her expectation, it may just be this year. Reason being, after 4 years of continuous price increase, the market has slowed down this year. So many cooling measures, tougher lending requirements by BNM as well as negative sentiments meant that the market is declining.

In fact, according to Michael Geh who’s a committee member of MIEA Penang, the transaction volume for Penang’s secondary market for the first half of this year will be declining, especially due to the bank’s tightening measures. Nevertheless, value is expected to remain. In fact the decline in transactions may be up to 15%! He also said that the Sultan Abdul Halim Mu’adzam Shah Bridge (Second Penang Bridge) would be a positive catalyst to the secondary market and it will push demands up in Batu Maung (on the island), Batu Kawan, Bukit Tambun and Sungai Bakap on the mainland.

No one knows when the market sentiment would be more positive. However, one thing is quite certain, with the cost of land, materials and construction, we no longer see developers launching any projects which are priced at RM450psf or below. In fact last year, before the slowdown, every new project launched was already above RM550psf. Thus, if we are looking at a 1,200 sf condo project, it would easily be around RM600,000 and this is not even available in areas such as Greenlane or Tanjung Bungah or even Jelutong. In such hotspots, the demand has pushed prices to continue going up. Solution for our common friend? Perhaps Sungai Ara or Bayan Baru may be an alternative even if her working place is in the town area.

A quick search online yields the following result:

latest condo

written on 28 March 2014

Next suggested article: Penang Property Prices, Still too high (updated) 

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