Penang property price cheaper today?

‘The price of property is cheaper today than six months later’. This was the answer from REHDA Penang President, Dato Jerry Chan when he was asked if the prices are going down since the total market transactions are going down. He went on to explain that low interest rate is the factor why property prices would continue to go up and also the actual fact that when compared to even regionally, Malaysia remained cheap. We can refer to the chart which shows the BLR in Malaysia and we can see that what he said was actually true. Current BLR is indeed on the lower side even if no longer the lowest. He also explained that Penang is the only place in Malaysia where it is impossible to get a room during festive season.
Dato Jerry Chan then mentioned something which I have written a few times in my articles. Current market is cautious but investor sentiment is definitely not negative but more on cautious note. Reason for this is because everyone is still unsure of what to do next. So many cooling measures, how would the market react? Thus, everyone is thinking twice before they buy. In fact this is the best time to buy because the buyers have the most bargaining power. This situation is not expected to last long.
Besides that he reiterated his earlier points, that the construction costs continue to go up, especially due to labour shortage. Many Indonesian labourers are now home because of Jakarta’s own property boom. Mr. Toh then added that from what he can see, majority of all the more affordable units which will be launched, the prices may be more or less today’s level but sizes would be smaller. Thus, he advised the buyers to buy the developments which are/were launched before Chinese New Year as they still carry the old price but sizes are bigger.
To be objective, not all the properties launched earlier are affordable, however, in terms of sizes, I think Mr. Toh’s statements are very true. The only way for units to be more affordable would be through the reduction of size. I am not so sure if there would be more SOHO units but I think sub 1,000sf units may dominate the market launchings from now onwards. Even at RM500psf, if developer were to launch 1,500sf today, buyers may not be willing to take up a loan of nearly RM800,000. Spending a little time to visit the actual property fair may reveal more on whose words are really true.
MAPEX Penang will be held on 2-4 February at G Hotel. Time is 10am – 9pm.
written on 24 Jan 2014
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