Penang Property Market: Demand or Supply First?

Buyer first or Build first? Penang developers will wait-and-see.

Are you looking for a property in Penang?

Do you find the choices are more from the secondary market versus from new launches? Or that the new launches are typically for a specific group and not the more affordable ones which could be what people need? Or are you the ones who are cautious and thus did not yet decide and the property developers become more cautious too because you were cautious? In Penang, this is what the developers are saying:

Article in nst.com.my: PENANG property developers will adopt a “wait-and-see” approach in rolling out new property projects next year in view of various factors, including rising power costs, fuel subsidy cuts and house buyers’ cautious stance.

The Real Estate and Housing Developers Association (Rehda) has expressed concern over bureaucratic red tape involved in obtaining developers’ licences and advertising permits for new launches, in addition to being saddled with rising construction and compliance costs.

Rehda Penang chairman Datuk Jerry Chan yesterday said Penang developers have to contend with not only making the biggest contribution to infrastructure, drainage and non-delivery of low- and low-medium cost homes, but also of high land costs, especially on Penang island.

“Since August, the issuance of advertising permits for new launches is taking longer than two weeks and run up to more than two months, while plans for fire safety now have to be vetted by the Ministry of Housing and Local Government as opposed to local council previously,” he said. Article in nst.com.my

Same question: Demand up first or Supply come first?

If demand starts first, many would lose out because prices can increase quite quickly. The years between 2008 – 2013 would tell us that property prices could even double during those times. The reason for it is simple. Homes could not be built overnight. This is not production of shampoo or Labubu toys which can be increased in production in hours or days.

A home needs many years for it to be completed. From land acquisition to planning approval and to construction and even keys handover. During all these years, due to demand increasing, developers would launch and buyers would continue to buy even as launch prices continue to move up. To the ones who could not wait, they would move into the secondary market and this meant that even the prices in the secondary market would be moving upwards too.

This is why it’s always more prudent to look at what we need and if the price has met logical expectations, it’s best to move in and buy versus waiting for something known as the best price which has never happened not just in the property market but also the stock market or any type of investments too.

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