Looking at the Penang property market, all property transactions in the state saw fluctuations throughout the whole 2014 before it dipped in 2015. The first quarter of 2014 recorded a total 6,416 transactions (valued at RM3.78 billion). It increased to 6,513 transactions valued at RM3.44 billion in the second quarter. It dropped to 5,757 transactions valued at RM3.15 billion in the third quarter and increased to 6,865 transactions valued at RM3.40 billion in the fourth quarter.

The number of transactions dropped to 5,637 units (RM3.58 billion) in the first quarter of 2015 before it continues to drop to 5,564 transactions (RM2.84 billion) and 5,060 transactions (RM2.39 billion) in the second and third quarter respectively

If we look at residential property transactions, particularly the primary and secondary market, the secondary market also leads the overall residential property market. In the first half of 2014, a total 1,841 primary properties were transacted as opposed to 7,182 secondary properties, bringing the total residential properties transacted to 9,023 units value at RM3.77 billion. The second half of 2014 saw a slight increase in the primary market to 2,254 units while the secondary market remains at 7,133 units. The total value of transactions for the second half of 2014 was RM3.81 billion.

Geh noted that the unnatural withholding of Advertising Permit and Developers Licence (APDL) has also affected the primary market in the first half of 2015 to see the drop in transactions for the market to 1,418 units valued at RM0.59 billion out of a total 7,743 units being the total (valued at a total RM3.14 billion) transacted.

The secondary market saw 6,325 units transacted with estimated value of RM2.55 billion.

This year also saw the approvals of development plans for over 7,000 units of affordably priced housing hovering at prices between RM300,000 and RM400,000.

“This augers well for a market where the primary market of 1,200 sq ft apartments are selling at RM700,000 to RM800,000 in 2014 just the year before,” he said.

He said 2016 will see a plethora of affordable apartments available in the market and awaiting APDL to be obtained.

Once the APDL is issued, then the due process of Sales & Purchase Agreements can be signed and the end financing process for the purchases can begin.

He pointed out that such a large number of units available for sale in the market will drive the overall index prices down.

“We expect to see about 7,600 transactions for the second half of 2015 with a value of RM3.7 billion and making the total 2015 transaction to 6.8 Billion,” Geh said.

As for the first half of 2016, he forecasted that Penang will see a total 7,500 residential units transacted worth of RM2.7 billion. He forecasted that the primary market will record about 1,200 transactions with the estimated value of RM500 million while the number of secondary property transactions will hover at 6,300 units with a total transaction value of RM2.2 billion for the first half of 2016.

*Micheal Geh is a Chartered Surveyor & International Real Estate Agent. He is a member of the Financial Planning Association of Malaysia with the Certified Financial Planner designation; National Association of Realtors USA with the Certified International Property Specialist designation; and a Board Member of FIABCI, the International Real Estate Federation. He is also a senior partner of Raine & Horne International Zaki + Partners Sdn Bhd.