Amidst the sluggish residential market, several upscale homes in George Town, Penang are struggling to find buyers, reported the New Straits Times.
These properties include bungalows in Jalan Cantonment and Jalan Vermont as well as a mansion at Jalan Utama, priced from RM6 million to RM25 million.
According to an agent marketing some of the bungalows, these high-end homes have been on the market for nearly five years. Besides the high price, another reason there are no takers is the old age of the properties.
“The mansion for example, is quite old and would require a lot of renovation to make it habitable again. Also, the size of the mansion is comparatively smaller than properties which are of lesser value.”
“Coupled with the fact that the price is rather steep, many potential buyers are put off from buying them. Properties like this are usually purchased for commercial purposes, but we have yet to make a sale,” said the agent who don’t want to be named.
Based on data from Raine & Horne International Zaki & Partners, the country’s housing market has indeed slowed down as only 76,163 properties were sold in Q1 2017 compared to the 80,008 units recorded in the same period a year ago.
In Penang, the number of transaction fell from 4,278 units to 4,015, of which 2,898 consists of residential properties.
“There has been a slowdown of market activities. This is not due to glut of properties. The buyers’ affordability has been reduced. The loan eligibility of home buyers is a big issue now,” said Raine & Horne’s Senior Partner Michael Geh.
“We have been saying it for years that the difficulty in getting loans is the main cause for the slowdown in the property market.”
Property agent Danny Khor agrees as the difficulty in getting housing loans from banks in leading to lower sales, despite the stable demand for houses.
For instance, he revealed that the mortgage applications of at least eight would-be buyers were rejected over the last six months, with most of them applying to loan up to RM400,000.
“They feel that once their application is rejected by one bank, there is no point in applying from other banks. When this happens, the house is put back in the market for selling,” he added.
Image sourced from NST
Radin Ghazali, Content Writer at PropertyGuru, edited this story. To contact her about this or other stories email radin@propertyguru.com.my
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