In a news article about Penang property market in The Malay Mail, Penang Real Estate and Housing Developers Association (REHDA) chairman Datuk Jerry Chan said that Penang’s house prices are certainly not going to come down. This is because of high costs which the developers would have to bear. These high development costs would have to be passed to the buyers and this is why prices would move up. Thus, the only way out is to build smaller units and this would enable the houses to be more affordable. He said that the developers have to pay lots of contributions today and due to this the next generation would have to suffer.
He also wished for an easier conditions for first-time home buyers to buy. This is to ensure they can afford to own a home. Current loan schemes made it tough for first-time buyers to get their loans. Datuk Jerry repeated something which many developers have been saying, that the first-time home buyers should be given higher rates. He also asked the government to reduce charges imposed on foreigners buying Penang properties. This will ensure more investments flow into Penang. This new money is definitely good for the economy.
This is what is happening currently in Penang property market. Read here: Residential Property Market in Penang 2015 In fact according to many agent friends in Penang, the total market is negative and it’s going to be tougher to sell homes. Thus, pricing may be the only element which would attract buyers. In terms of prices per sq ft, actually, the choices within the island is also getting lesser these days. Some of the usual hotspots are already priced so high that I always wonder who are these buyers anyway. We are talking about RM1,200 per sq ft or higher, something which baffles me. Perhaps there are really that many rich people or high salaried people in Penang.
In the near term however, I think it’s better to buy bigger units from the secondary market instead of smaller units at similar price levels. This is unless there are already no more such choices. If what Datuk Jerry is saying will be happening, it meant that smaller units would be the flavour of the future and that the bigger units would be the sought after ones in future. Oh yeah, in terms of net migration, it is not showing an uptrend. Read here: Penang: Fertility rate of just 1.5 and 1,300 net migration Are there still shortages? I think the demand is there but the sentiment and pricing holds the key. Happy buying a Penang property.
written on 5th Nov 2015
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