GEORGE TOWN – Activity in Penang’s once bustling property sector is set to recover as the market eases into the new normal of doing business, said a property consultant.
The state had recorded a slump in activity during the first half of the year as recorded by the Valuation and Property Services Department (JPPH).
According to immediate past president of International Real Estate Federation (FIABCI) Malaysia Michael Geh Thuan Peng, there are a lot of activities online during the movement control order that were not captured in the statistics.
Among them were buyers viewing homes online and video conferencing to initiate interests and deals. These are bolstered by the firm belief among investors that Penang’s property market has the capacity to rebound.
Although property showrooms were closed, the market was active online, he said.
“A lot of agents say they have good bookings for the first half of the year and they look forward to making a transaction when they can.
“June onwards, bankers have been busy processing loan applications while lawyers prepare sale and purchase agreements, while agents follow up with transactions.
“I expect the property activity graph to show a ‘V’ for the third quarter (Q3), because in Q2, the dip was very pronounced. Based on my observation, there have been a lot of transactions in Q3.”
Geh said the residential segment has not been affected much.
“Because of the moratorium, some owners assisted tenants with rental discounts, and no matter what, we still need a place to sleep.
“With banks offering targeted moratorium to those who need it, I do not see foreclosures.”
He added that with the home ownership campaign, special initiatives for first-time buyers and exemption of real property gains tax (RPGT), the property sector is far from dead.
But he conceded that commercial properties had to bear the brunt of the slump due to the movement control order (MCO) in March.
JPPH indicated that the market showed a sharp decline in the first half of this year as transactions came to a halt as the aftermath of the first wave of the pandemic.
Geh said the Malaysian property market still recorded RM46.94 billion in transactions in the first half of the year.
"This shows that the market is still active. A total 115,476 transactions were recorded for the first half of this year despite the MCO."
The market had only recorded a drop of 27.9% in volume and 31.5% in value compared to the first half of 2019, which recorded 160,165 transactions worth RM68.53 billion, he added.
Geh said this is evidence that the market remains resilient despite the challenging economic conditions and impact of the Covid-19 pandemic.
Penang also recorded continued demand for housing, with the state executive councillor in charge of housing Jagdeep Singh Deo announcing that the state would increase its target of affordable homes by 2030 to 220,000 from 180,000.
“The interest (in affordable housing) is always there, we just need to see if those interested are qualified and if the banks approve of the loans,” said Penang Development Corporation CEO Datuk Mohd Bazid Abd Kahar yesterday.
“People need houses according to their affordability, but now the situation makes it harder. PDC will continue to play our role.”
From 2018 to 2020, Penang has seen the completion of 33,847 affordable housing units, 20,721 units in development and another 52,174 in approved projects. – The Vibes, October 25, 2020
