The National Property Information Centre’s (NAPIC) H1 Property Market Report confirms what we already know – a soft property market amid escalating residential property prices.

PENANG

The Report states, “The number of transactions in the Penang property market saw a decrease of 11.3% in volume and 2.2% in value against H1 2014. In contrast, the state’s All House Price Index increased by 5.1%, where the All House Price for the “average house” increased from RM344,163 to RM361,777.”

What does this mean for aspiring home owners, with prices increasing even with the slowdown in the market?

MY: The increase in prices is of no surprise as it is getting difficult to build more properties on Penang Island due to the land scarcity. If you were to study the chart of house prices over the span of last 10-20 years, you would notice that the figures have continued to see an upward trend. The demand is still there however, as property investors with the financial means will continue to buy as Penang remains as a viable location for many. For first time home buyers, however, they will have to turn to affordable homes by the state; which is going all-out to assist aspiring home buyers. Also, aspiring home buyers are now shifting their attention to mainland Penang where prices are considerably lower.

Another issue at hand is that property buyers are being weighed down by the sentiment that obtaining a home loan from banks is near to impossible. I have spoken to quite a few potential buyers who feel defeated even before they attempt to purchase. There is a pressing need for proper education to offset this pessimistic view. Those looking for more insights on bank loans are encouraged to read my articles at www.miichaelyeoh.com.

KS: Despite the overall slowdown of the property market, the residential sub sector remains resilient and stable, with the exception of a few fire sales; where properties are being offered at extremely discounted prices by distressed sellers. Those who are waiting for the right time for a good deal should reconsider doing so to avoid disappointment later on.

Read more here – http://iprop.my/1T8gjJk

*This story was first published in iPropertyFocus on Dec 01, 2015