Penang’s domestic market to rebound in 2022: Juwai IQI
PETALING JAYA: Penang’s real estate market will recover in 2022, according to a new analysis released today by real estate technology group Juwai IQI.
Juwai IQI co-founder and CEO Kashif Ansari said in 2022 he expects residential real estate in Penang to rebound faster than in any other part of Malaysia except Johor.
“By the second quarter of 2022, we expect the borders to fully reopen and the number of international visitors to trend towards pre-pandemic levels. Economic growth, employment, foreign investment and tourism will recover. These trends will support a further recovery in trading volumes and prices, ”he said in a statement today.
As one of the smallest and most developed regions in Malaysia with a leading international reputation, Penang is one of the states best positioned for post-pandemic recovery. The pandemic is an external shock and the ensuing decline in transactions and prices does not reflect any inherent market weakness.
“With the support of government initiatives and positive economic trends, the real estate market will recover along with the economy. The prices of luxury condos in Penang are lower than those in competing cities Bangkok and Jakarta. Prices in neighboring Singapore are even higher. Comparable residences can be five times more expensive there.
“As for the market for foreign buyers, it will take time to regain all their confidence. However, the high-tech manufacturing and unique tourism assets of Penang make it desirable for second homes, pensions, and investment. We expect foreign purchases to return to previous levels over time, ”Kashif said.
He said the border closures had more impact on Penang than on states with fewer international links. Penang depends in part on international trade, investment and tourism to support its thriving economy. The pandemic has prompted buyers to postpone their transactions. Both local and foreign buyers have strong pent-up demand.
“The Malaysian market has recovered in the first half of 2021 from a difficult 2020, with 32% growth in the value of transactions. In Penang, the volume recovery was even more robust, with a 41.3% year-over-year increase in the value of transactions.
“Penang’s real estate market struggled more with MCO in 2020 than in 2021. When the lockdown was first implemented, showrooms were not allowed to operate and business slowed down considerably. “
He said sales had started to increase with the adaptation of online presentations, virtual showrooms and other cutting-edge technologies. When it comes to transactions today, most buyers are willing to attend online presentations and then make a reservation.
“The promoters held firm on prices, even though activity fell. Rather than drastically lowering their selling prices, developers are offering all kinds of promotional packages to stimulate buyers.
“Is this the right time to buy?” Absolutely. With lower interest rates, developer incentives, and the ongoing Home Ownership Campaign (HOC), this may be the best time to buy for several years. The HOC has already been extended twice and could be halted after December.
When economic growth picks up next year, not only will buyers face increased competition, but construction costs will rise, suggesting further price hikes.