According to pundits, there are two types of property buyers: the first buys out of fear that homes prices will rise further, while the other buys out of need.
"Sales this year have been better than last year, driven by fear rather than the speculative element," said Datuk Jerry Chan, Chairman of Real Estate and Housing Developers' Association (REHDA Penang).
Chan was commenting on CIMB's report ‘Debunking the property bubble myth', which said that the "talk of a property bubble was overstated as the sharp rise in residential property prices over the past few years was confined to selected areas".
Chan added the tourism sector is very big in Penang and if Indian and Chinese nationals were to buy in Penang, it would "turn the market upside down."
"So I foresee Penang prices would continue to rise because of inadequate supply of land, not because of inadequate developments," he said.
In addition, domestic demand in Klang Valley for residential houses is expected to be strong until the middle of 2012, said Gerard Kho, Chief Executive Officer of Reapfield Properties Sdn Bhd.
"It is not a question of whether there is a bubble or not but whether prices in certain areas are tied in to fundamentals or not," commented Elvin Fernandez, Managing Director for the Khong & Jaffar Group of Companies.
"And we know in certain hot spots, they are not," he said.
In Johor, Samuel Tan of KGV International Property Consultants said the state is presently undergoing a transition due to the Iskandar Malaysia factor.
"New houses entering the market are priced a lot higher than three years ago but the market is accepting it," he said.
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