In an effort to attract home buyers, real estate developers with residential projects in Penang are offering more promos, reported the New Straits Times.
According to Loo Choo Beng, Executive Director of PA International Property Consultants (Penang) Sdn Bhd, home builders in the state are dangling incentives to entice buyers like rebates, freebies, interior design packages and low down-payment schemes.
In particular, SP Setia is offering a differential sum loan scheme known as Setia Express Advance Loan (SEAL). However, this is only available for the developer’s completed projects such as the Pearl Villas @ Setia Pearl Island in Penang.
Basically, this loan will finance up to 30 percent of a property’s selling price. It is payable in three years and comes with interest rates as low as 5.5 percent per annum.
Despite these incentives, real estate developers are still struggling to sell their units in Penang amidst the weak residential market and the government’s strict lending rules.
“Penang’s property market remained soft last year. Cautious spending behaviour and competition with newly completed properties are part of the reasons for the slow sales performance,” noted Loo.
According to the latest property market report published by the Valuation and Property Services Department in April, the state was the worst performing in terms of sales in the primary housing market. Out of the 5,646 units launched, property developers only managed to sell 561 units in 2016.
Reasons for the lacklustre performance last year include high rejection rate for housing loan applications, rising cost of living, soft consumer sentiment and the weakening of the Malaysian ringgit versus the US dollar.
Moreover, Loo expects luxury residential properties in Penang to see a significant drop in prices this year as he believes that values have peaked.
“The property market in the state is experiencing a period of consolidation and price correction in terms of rentals and sales. The price correction process will bring a new equilibrium between supply and demand in the market.”
He also thinks that the occupancy rate of high-rise properties in the state would decline due to a substantial amount of incoming supply.
Nonetheless, Loo is optimistic on properties located outside of Penang Island. “The mainland is going through massive transformation, with Butterworth expected to be another upcoming hotspot after Batu Kawan.”
Image sourced from http://tradingandpsychology.blogspot.my
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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