Penang home market to rebound in 2022: Juwai IQI

PETALING JAYA: The Penang housing market will recover in 2022, according to new analysis released today by real estate technology group Juwai IQI.

Juwai IQI co-founder and group CEO Kashif Ansari said in 2022, it expects residential real estate in Penang to bounce back more quickly than in any other part of Malaysia, except Johor.

“By the second quarter of 2022, we expect borders to fully reopen and international visitor numbers to be trending towards pre-pandemic levels. Economic growth, employment, foreign investment, and tourism will recover. These trends will support further recovery in transaction volumes and prices,“ he said in a statement today.

As one of the smallest and most developed parts of Malaysia with a prominent international reputation, Penang is one of the best-positioned states for the post-pandemic recovery. The pandemic is an external shock, and the subsequent drop in transactions and prices does not reflect any inherent weakness in the market.

“With the support of government initiatives and positive economic trends, the property market will recover along with the economy. Luxury condo prices in Penang are lower than in competitor cities Bangkok and Jakarta. Prices in nearby Singapore are even higher. Comparable residences there can be five-fold more expensive.

“As for the foreign buyer market, it will take time to gain back their full confidence. However, Penang’s high-tech manufacturing and unique tourism assets make it desirable for second homes, retirement, and investment. We expect foreign buying to come back to prior levels in time,” said Kashif.

He said the closed borders have had more of an impact on Penang than on states with fewer international ties. Penang relies partly on international business, investment and tourism to sustain its thriving economy. The pandemic has caused buyers to postpone their transactions. Both local and foreign buyers have a great deal of pent-up demand.

“The Malaysian market recovered in the first half of 2021 from a challenging 2020, with 32% growth in the value of transactions. In Penang, the recovery in volume was even more robust, with a 41.3% year-on-year increase in transaction value.

“The property market in Penang struggled with the MCO in 2020 more than in 2021. When the lockdown was first implemented, showrooms were not allowed to operate, and activity slowed dramatically.”

He said sales started picking up with the adaptation of online presentations, virtual showrooms and other advanced technology. As for today’s transactions, most purchasers are willing to attend online presentations and subsequently proceed with a booking.

“Developers have held firm on prices, even though activity has dropped. Rather than drastically dropping their selling prices, developers are providing all sorts of promotional packages to stimulate buyers.

“Is this a good time to buy? Very much so. With lower interest rates, developer incentives, and the ongoing Home Ownership Campaign (HOC), this is perhaps the best time to purchase in several years. The HOC has already been extended twice and may be discontinued after December.

When economic growth climbs next year, not only will buyers face more competition, but construction costs will rise, suggesting further price rises.