GEORGE TOWN, Feb 12 — Penang developers are appealing to the state government to ease off on its cooling measures, following the drop in property sales last year.

Real Estate and Housing Developers Association (Rehda) Penang chapter chairman Datuk Jerry Chan said property transactions dropped by 20 per cent last year as compared to 2013.

“The cooling measures put in place by the state government to discourage speculation were effective in reducing property transactions, but these did not affect property prices due to rising costs,” he told a press conference at Penang Rehda’s office here today.

Despite the drop in transactions, development costs such as development charges levied by the local authorities, land costs and other charges, materials and labour costs have continued to rise, he said.

“If you expect developers to cut their property prices, it’s not happening because the costs are going up,” he said.

Secondary market prices have also remained bullish, although it was expected to drop, he said.

“So we do not expect all property prices to soften, in fact, I’d say that prices now are quite stable and we don’t foresee an increase in property volume too,” he added.

Chan said Rehda has urged the state government, through its Housing Development committee chairman Jagdeep Singh Deo, to be more lenient in its development charges, and to give developers some leeway.

As for the cooling measures, which includes a three per cent levy on foreign purchases among others, Chan suggested that the state ease these measures for certain projects, instead of making them compulsory for all.

“We told them when the market is slowing down they have to ease up on all these measures and controls,” he said.

Penang introduced a new housing policy in 2014 to curb property flipping and control escalating property prices.

Although property prices are not expected to drop, Chan said he believes many developers will be more realistic with their pricing by not setting it too high.

“Property prices have stabilised, so now is a good time to invest in properties,” he said.

Earlier, Chan announced that this year’s Malaysia Property Exhibition (Mapex) 2015 would be held from February 21 to 23 at G Hotel.

He said the exhibition will be the best avenue for homebuyers to purchase their homes before the implementation of the Goods and Services Tax (GST).