Penang Property market slowed down – Updated

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From Penang, I got to know that one developer who launched its condo project without free car park is now giving one (1) car park. However, my expectation for ANY new condo project is two (2) car parks. Thus far, this has been true for all new launches from established developers as well as newer ones. However, there are still minority of developers which are still giving just one(1) car park. I think with the market going down, the developer has no choice but to offer something extra. In fact another developer called up their buyers and said a rebate of 5% is now available to reward its loyal customers. Actually, I think this is because they wanted to relaunch their project at a lower price since it has been selling for many months and so many units are still left. Another developer decided to just slow down all their marketing activities because it does not want to appear too ‘desperate’. No doubt, there are still many successful launches, right location, right price and effective marketing but the slowdown has started to affect some of the inflated confidence of many of these developers who once thought the market would just buy whatever they offer.

Everyone I know has been saying that the property market is slowing down. Well, everyone except one agent who told me that his business is still very good. In actual fact, market is slowing down. This is the effect from the many cooling measures implemented and will be implemented in the near future. Buyers are now also more cautious and thus may want to wait and see before they commit to a huge mortgage. What about the developer’s side? For those whose projects are yet to be launched, we can see they are now being delayed. I think this is a good move, rather than having bad sales if the location is not the best or the pricing seems to be too high compared to the perceived value. How slow is slow? Let’s refer below:

residential

Penang’s total transaction has gone down close to 30% year on year. KL’s transactions has done down close to 50%. Selangor’s total transaction went down slightly over 21%. The only one still showing huge growth is Iskandar. However, even Iskandar has slowed down though many developers are now snapping up parcels of land with full anticipation of a bullish time in the near future. Just look at all those huge names from China and you would understand what I meant.

The question is, how long would this period last? Well, in terms of demand, it is still there but the developers has to relaunch or think again. the magic word is ‘affordability’ instead of huge profitability. No one wanted the developers to stop launching but the time to simply launch anything has passed. Many prominent developers are launching medium priced projects instead. I think this is the correct way to go. I reiterate, if you are buying for own stay, this is the best time to negotiate for a good price for the unit you have been eyeing. You may wait for market to soften further but secondary market has not increased as much as primary since the beginning. I seriously wonder how low would it go. Of course if it really does go lower, then I may buy Penang instead of KL.

Updated on 20 April 2014

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