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Even while facing the effects of the Covid-19 pandemic, the Penang property sector is expected to remain resilient. Raine & Horne International Zaki + Partners Sdn Bhd, a property consultancy company, expects the industry outlook for 2021 to do better.

This is due to tighter physical-distancing practices that would enable companies to make progress on their digital applications and improve online property transactions beyond the level of 2020.

Its senior partner, Michael Geh Thuan Peng, said that, along with transport hubs, residential properties in hotspots are likely to retain their value. Geh urged the emerging investors not to be discouraged by negativity, which is caused by weak market sentiments because of the virus-hit economy.

The number of residential property transactions in Malaysia decreased by 30 percent in the first half of 2020. The number of transactions fell to 115,476 units in the first half of 2020 – the lowest in a half-year between 2014 and 2020, from RM72,88 billion of 168,482 units in 2019 to RM46,94 billion.

With 14,789 transactions valued at RM5.59 billion, the number of transactions in the primary market was at an all-time low in the first half of 2020, compared with 20,300 transactions valued at RM8.07 billion in the second half of 2019.

Meanwhile, for the first half of 2020, the number of commercial sector transactions fell to just 8,118 units valued at RM8.51 billion, about 35 percent of the transactions in the second half of 2019.

In the first half of 2020, only 1,980 transactions valued at RM5.41 billion were reported for industrial properties, a 40 percent decrease compared to 3,123 transactions valued at RM7.83 billion in the second half of 2019.

Although, it isn’t all bad, as Geh expects the third and fourth quarter figures (Q3 and Q4) of last year to be on an upward trend. The migration of investors and real estate brokers to online platforms to perform their transactions and to view new, creative start-ups has led to this speculative outlook.

Geh noted that the importance of developing a long-term economic recovery plan to ensure sustainable growth and improve investors’ trust are among the lessons learned from the pandemic.

He also claimed that the number of transactions depended not only on the primary property market but also on the secondary market, which usually has a ratio of about 80:20 to the primary market.

“In view of its importance to the general economy, the property market would recover and consolidate, adding that a thriving property sector would contribute to domestic consumption”, said Geh.

 

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GEORGE TOWN – The Penang property market is expected to remain resilient despite the crippling effects of the Covid-19 pandemic.

Property consultant firm Raine & Horne International Zaki + Partners Sdn Bhd foresees the 2021 market outlook to fare better.

This is due to stricter physical-distancing practices, which will entice businesses to progress on their digital applications and boost online property transactions above 2020 levels.

Its senior partner, Michael Geh Thuan Peng, said that residential properties in hotspots, along with transport hubs, will likely maintain their value.

“We do not foresee the widespread auction of homes despite the downtrends,” he said.

Geh urged budding investors not to be put off by negativity, made worse by poor market sentiments due to the virus-hit economy.

The first half of 2020 saw a 30% decline in the number of residential property transactions in Malaysia.

The number of transactions dropped from 168,482 units worth RM72.88 billion in the second half of 2019 to 115,476 units worth RM46.94 billion in the first half of 2020 – the lowest number recorded in a half-year between 2014 and 2020.

The number of transactions in the primary market was at an all-time low in the first half of 2020, with 14,789 transactions valued at RM5.59 billion compared with 20,300 transactions valued at RM8.07 billion in the second half of 2019.

Meanwhile, the number of transactions in the commercial sector for the first half of 2020 dropped to only 8,118 units valued at RM8.51 billion, almost 35% of the transactions in the second half of 2019.

Only 1,980 transactions valued at RM5.41 billion were recorded for industrial properties in the first half of 2020, a decline of 40% compared with 3,123 transactions valued at RM7.83 billion in the second half of 2019.

But not all’s gloomy, as Geh expects last year’s third and fourth quarter figures (Q3 and Q4) to be on an upward trend.

What contributed to this bullish outlook was the migration of investors and real estate agents onto online platforms in order to conduct their transactions and viewing of new innovative start-ups.

“There is a change in preference from high to low-density living; thus, suburban and semi-rural settings are trendy among investors and homebuyers in the current climate,” he said.

Geh pointed out that among the lessons learnt from the pandemic include the importance of having a long-term economic recovery plan to ensure sustainable growth and increase investor confidence.

He also said that transaction numbers did not depend only on the primary property market, but also the secondary market, where its ratio to the primary market is typically around 80:20.

“In other words, most property transactions are all from the secondary market. This is why when we want to look at the property market, we cannot just rely on overhang numbers – because overhang numbers are for completed properties which are still unsold and not classified as part of the secondary market.

“If we look at the latest numbers from 2018 and 2019, we see a pattern. Q3 an Q4 transactions usually rise, while the Q1 and Q2 transactions are usually on a downtrend.”

Hence, Geh said that the property market would recover and consolidate in view of its importance to the general economy, adding that a thriving property sector would contribute to domestic consumption. – The Vibes, February 11, 2021.

 

Source: The Vibes