While no one would know when the COVID-19 will be effectively contained, the pandemic is definitely further dampening the already sluggish property market in Penang since its outbreak in March.

To hear some views from industry experts, an email interview was conducted with Ms. Christina Choong (MIEA Penang Branch Chairman) to discuss the impact of COVID-19 on the property industry and some tips for property buyers.

Q1. As the Penang Branch Chairman of MIEA, from your perspective, how is the Penang property market disrupted due to the Covid-19 pandemic?

Due to the pandemic, the property market is seen to be one of the most impacted among the many business concerns. In Penang, the hospitality industry came to almost a standstill with many related to this industry losing their jobs.

Due to the closed border and traveling being affected and the MM2H program temporarily suspended, the foreign investors have come to a standstill and the rental market is facing a drop in demand.

Rentals for commercial and retail lots have dropped due to the closure of businesses and its demand has decreased and in view of this, the existing tenants are requesting for lower rentals.

Many developers have deferred their project launches as many people are more concerned about their businesses, jobs and income losses than purchasing a property now. We expect some projects under construction to be delayed due to the disrupted MCO period.

Although the Federal and Penang Govt has announced few incentives packages for the property sector, the demand for properties is still dampened resulting in prices to ease slightly.

As they say in any adversity there is an opportunity and the investors may be in for a good bargain as the price easing begins. We see that demand for investment will go up because investing in Real estate is the best hedge against inflation.

For first time buyers, there will never be a better time to invest now because of lower pricing, low interest rates, government incentives and etc.

Q2. It is observed that some developers will be facing strong headwinds ahead, especially those selling midrange products with low-profit margins. What are your thoughts on this?

Developers are facing tough times and the overhang is adding pressure to them. Nevertheless, many developers are taking measures to give incentives & discounts and all these are good for buyers who are looking for opportunities.

Q3. Some are in the opinion that buying directly from the developer is a better option. Can you please share your views?

It all depends on which perspective they come from.

From our perspective, the agents are appointed by developers to reach the consumer, market the product highlighting salient points, and help you to select the best units that meet your needs. They are independent as such they can do a lot more running for you.

The developers know their product well and are more familiar with the location of the development. Sometimes they also help the agents in selecting units for their customers. Most of the developers’ salespeople are housebound and can only do so much as they are mostly salaried. So they may not be able to do a lot more running for you or present different views on other products nearby.

The benefits you get will be the same as the prices and discounts are prefixed.

And now with the State and Federal Govt introducing the economic stimulus packages e.g. reintroducing HOC which received good response in 2019, RPGT exemption, we believe that it would be able to stimulate the property market.

For the secondary market, purchasers are assured that the properties are completed and may be handed over upon completion of sale. Owners are selling it at a competitive price as they are competing with developers.

PART 2: Common property pitfalls and preventive measures.