THE property segment in Penang and Johor, despite experiencing a slowdown like the general market in Malaysia, is still seeing a steady number of transactions within the secondary property sector.
Raine & Horne Malaysia senior partner Michael Geh says the secondary market remained strong this year despite a dip in overall transactions.
“In the first six months of this year, the secondary market recorded 5,658 transactions valued at RM2.17bil. In comparison, only 1,040 units valued at RM478mil were transacted in the primary market.
“This means the secondary market makes up 84% of the total transacted units for the first half of this year. When compared to the same period last year, the secondary market saw a drop of about 13% in transactions and 15% drop in value transacted,” he says.
Geh emphasises that the secondary market sold over four times in transaction units over the primary market and remains active.
He adds that in the same period last year, the secondary market recorded 6,325 transactions valued at RM2.55bil.
“The primary market recorded 1,418 transactions valued at RM590mil in the first half of 2015, meaning it also saw a 20% drop in transactions and value transacted.”
Geh says 15,291 residential property transactions valued at RM6.17bil were recorded in Penang last year.
“Interestingly, out of the overall transactions recorded last year, 77% are for properties priced below RM500,000. Only 16% are for properties priced above RM500,000 and 7% for properties priced above RM1mil.
“This shows that Penang still have properties transacted at below RM500,000. Secondly, I would also like to point out that the secondary market has remained bullish despite the dip in overall property transactions.”
In Penang, Geh says the residential property market for the first half of this year dipped by about 14% from 7,743 transactions valued at RM3.14bil in the first half of 2015, to 6,698 transactions valued at RM2.65bil in the same period this year.
According to the National Property Information Centre (Napic), residential property transactions recorded a marked decline in market activity in 2015 by 16.9%. The state saw a substantial decline in new launches by 47.5% or 2,348 units.
Most states, particularly major ones, Napic says, saw substantial declines in their new launches. New launches in Johor and Penang saw declines of 42.8% to 9,428 units and 47.5% to 2,348 units respectively.
Flat market for 2017
Looking ahead towards next year, Geh feels that the local property market will remain flat in 2017.
“The outlook should remain the same as 2016.”
One industry observer says he is “hopeful” that things will start picking up in the final quarter of this year.
“It tends to be a little quiet in the third quarter Generally, things usually pick up in the final quarter, especially the retail sector, given the festive holidays and year-end sales during the period.
“But it will also depend on other variables, such as sentiment, or if the central bank announced something that could affect the local property sector.”
In August, Retail Group Malaysia (RGM) said the Malaysian retail industry’s fourth-quarter growth rate estimate remained at 5.5%, taking into consideration the growth of 1.3% achieved during the same period a year ago.
Another industry observer says he expects the rental market in Penang to remain competitive for the remainder of this year.
“The investors or so-called speculators that bought properties some four to five years ago, who’s only aim was to flip it (for profit), might have problems selling the properties that are now coming into the market because of the weaker sentiment.
“Therefore, they will be eager to at least rent it out - so it’s certainly a rental market at the moment.”
Johor-based KGV International Property Consultants (M) Sdn Bhd director Samuel Tan Wee Cheng says unless for a few exceptions, the Johor property market has been rather subdued this year.
“Except for outstanding sales in the primary market like UEM SUNRISE BHD’s Melia Residences and the multi-billion mega development Forest City, other developers have been reporting slower sales within the state.”
Tan says transactions in good locations were still steady. Commenting on the secondary property market, he adds that many buyers are adopting a “wait-and-see” approach due to weak economic climate at the moment.
“I think it’s a good time and opportunity for buyers and investors to come into the market. It’s not when to buy – it’s where and what to buy. That’s the maxim to follow. The good news will come.”
Looking ahead towards 2017, Tan feels that the Johor property market will remain flat compared with this year.
“I think transaction volume and value will go down. Generally, the market has still yet to recover and likely to remain flat next year.”
According to Napic, Most states, particularly major ones, saw substantial declines in their new launches. New launches in Johor and Penang saw declines of 42.8% to 9,428 units and 47.5% to 2,348 units respectively.
The overall sales performance for the country hovered at 41.4% (29,089 units sold), lower than 45.4% (39,491 units sold) in 2014.