The number and value of residential property transactions in Penang are projected to decline between 50% and 60% in the second quarter of 2020 from the preceding first quarter.

“We project a 50%-60% drop from the first quarter because the property market went into a silent mode after the movement control order was implemented in March.

“Most of the transactions happened in January and February, ” Raine & Horne Malaysia director Michael Geh (pic) said.

According to Napic statistics, in the first quarter the number and value of transactions for Penang stood at 2,748 and RM1.06bil.

On the island, depending on location, the current price of high-rise residential properties is 5% to 10% lower than in 2019.

“After the moratorium on the repayment of housing interest, we expect a further drop of 5% to 10%.

“We are not seeing a rush to sell properties because of the freeze on the repayment of housing interest, ” he said.

According to Geh, the cash incentives offered to promote the sales of housing projects in the primary market for the last 12 months had impacted the secondary market.

“The sales in the secondary market have contracted by about 30% as a result, ” he said.

On oversupply, Geh said: “The overhang of residential properties in Penang in 2019 was 3,353 units, compared to 3,445 in 2018.

“Some 35% of the overhang residential properties are priced between RM500,000 and RM1mil.

“About 25% are those priced between RM300,000 to RM500,000, while another 22% are priced above RM1mil, ” Geh added.

However, there is a surge of interest for the rental market.

“We can see more interest to rent than to purchase for the past 12 months, which may have to do with the difficulty of obtaining a housing loan.

“So far, the interest in rental has yet to trigger an increase in rentals.

“For shopping lots in a mall, the rentals have been lowered by 20% to 30% to retain existing tenants whose business have been affected by the virus outbreak, ” he added.

Geh said he could not see beyond the second quarter.

“When will the country open up its borders again? Until it opens up, the interests shown by overseas buyers for the residential properties would not translate into sales.

“We have seen healthy interests from overseas buyers because of the weakened ringgit, which has made the local properties even more attractive.

“The demand from the local market might be dampened due to the increase in unemployment in the near future.

“Many companies have just started to resume operations and will be reassessing their human resources needs soon.

“This means they could embark on retrenchment exercises to clear excess head-counts because of the business environment.

“Because many parts of the globe are still in lockdown, we can see companies in the manufacturing sector not taking in new employees. Therefore, we can expect the demand for affordable housing in Penang to be weak, ” he said.

On the federal government’s decision to waive the real property gain tax (RPGT) from June 1,2020 to Dec 31,2021 and restart the national home-ownership campaign, Geh said these measure were welcome and should have a positive impact on the property market. “The RPGT waiver will jump-start the property market, ” he said.

Source: TheStar.com.my

About The Zen

A mixed development by Asia Green at Bayan Mutiara. It is located next to Tun Dr. Lim Chong Eu Expressway, just a short drive away from the ongoing Penang World City township development by Tropicana Ivory. This development comprises a 46-storey skyscraper with two residential towers, and shop offices located at lower level. The residential component will feature 1,200 affordable units and 730 bigger open market units.

Find out more about The Zen development

A newly proposed residential development by Welcome Development Sdn. Bhd. at Bukit Mertajam. Strategically located at the intersection of Jalan Song Ban Kheng and Jalan Kota Permai, diagonally opposite Spectrum Residence by Zuwen Bina. It is only a 5 minutes walk to SJKC Beng Teik Chinese primary school, surrounded by various amenities which include banks, markets, eateries, petrol stations and others.

This development comprises one block of 9-storey apartment, featuring 60 units of low cost and 10 units of medium cost apartment. The low cost and medium cost apartment as a standard built-up size of 650 sq.ft. and 1,000 sq.ft. respectively.

The project is still pending for approval. More details to be available upon official launch.

Project Name: (to be confirmed)
Location : Bukit Mertjaam
Property Type : Apartment
Total Unit: 70
Built-up Area: 650 sq.ft. (low-cost), 1,000 sq.ft. (medium cost)
Indicative Price: (to be confirmed)
Developer: Welcome Development Sdn. Bhd.

Location Map:

The National Economic Recovery Plan (PENJANA) incentives announced on Friday are expected to heighten property buying activities in the next few months.

ExaStrata Solutions Sdn Bhd’s chief real estate consultant and chief executive officer, Sr Adzman Shah Mohd Ariffin, said the stamp duty exemption under the revived Home Ownership Campaign (HOC) would certainly boost the sales of new residential properties priced no more than RM2.5 milion.

“On top of that, developers are required to give a 10% discount on the prices (to qualify for the exemption). This incentive is further enhanced by the lifting of the 70% margin of financing limit for the third housing loan onwards (for properties valued at RM600,000 and above).

“The current low bank lending rate will also help to encourage more buyers to start buying properties provided that that they can qualify for a loan,” he told Bernama.

He added that this really depended on how the banks’ own restrictions were going to be loosened up for the would-be purchasers to qualify.

On the real property gains tax (RPGT) exemption, Adzman said this would encourage owners to dispose of residential homes during the period of June 1, 2020, to Dec 31, 2021.

“However, this may result in the sub-sale market competing with the sale of developers’ unsold housing stock.

“Nevertheless, this will help the owners who need to liquidate due to financial woes to gain more since the RPGT will be exempted,” he said.

Meanwhile, Elvin Fernandez, managing director of valuer and property consultancy Khong & Jaafar Sdn Bhd, said the big issue in the Malaysian property market — “the elephant in the room” — was the substantial oversupply of properties, be it residential or commercial.

“In the residential sector, the underlying fundamentals are stronger mainly because the vast majority of owners are owner occupiers who would not be easily shaken even with the severe downturn in the economy we are now facing.

“The owner of residential properties who are not desperate will hang on and not sell their houses at distressed prices,” he said.

On the other hand, in the commercial space like office buildings and retail centres, the oversupply had greater consequences, Fernandez said.

“To rebalance the various sectors of the property market will need a deeper and more holistic study and appropriate measures taken to make the property market more efficient and supportive of the economy in general,” he highlighted.

As for the incentives announced, he viewed the HOC as good in the sense that it might help to clear some of the oversupply in the residential sub-sector while the stamp duty exemptions were also welcome.

“The RPGT relief is good but it is only for residential properties and not as extensive as expected, especially on the RPGT after five years.

“The uplifting of the 70% margin of financing limit is also a very good move, as the banks should be allowed to assess their risks,” he added.

Source: Bernama

To stimulate the property market and provide financial relief to home buyers, here are the incentives announced by Prime Minister today:

1. Home Ownership Campaign (HOC) to be reintroduced:

Stamp duty exemption on the instruments of transfer and loan agreement for the purchase of residential homes priced between RM300,000 to RM2.5 million subject to at least 10% discounts provided by the developer. The exemption on the instrument of transfer is limited to the first RM 1 million of the home price while full stamp duty exemption is given on loan agreement effective for sales and purchase agreements signed between 1st June 2020 to 31st May 2021.

2. RPGT exemption for disposal of residential homes from 1st June 2020 to 31st December 2021 (This exemption is limited to the disposal of three units of residential homes per individual)

3. In addition, the current 70% margin of financing limit applicable for the third housing loan onwards for property valued at RM600,000 and above, will be uplifted during the period of the HOC, subject to internal risk management practices of financial institutions.