Property transactions expected to spike despite Covid-19 pandemic, says real estate expert

An aerial view of Gurney Drive from Komtar in George Town, Penang September 7, 2020. — Picture by Sayuti Zainudin
An aerial view of Gurney Drive from Komtar in George Town, Penang September 7, 2020. — Picture by Sayuti Zainudin

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GEORGE TOWN, Feb 22 — The property market is expected to see more transactions despite the Covid-19 pandemic, property expert Michael Geh said today.

The Raine and Horne International senior partner said this is based on the property transaction trends released by the National Property Information Centre (NAPIC).

"Based on NAPIC figures which showed a spike in property transactions in quarter three of 2020, I believe it will continue to spike in quarter four and into this year," he said in a press conference with state exco Jagdeep Singh Deo at Komtar today. 

As for the number of overhang or unsold properties in the country, Geh said a lot of the unsold commercial units in Klang Valley are empty offices and lots in shopping complexes due to under-occupancy. 

"As for residential properties, a lot of the unsold units are those located in undesirable locations and a high percentage are unreleased Bumiputera lots," he said.

He said most of the overhang units are located at the fringes of areas with very low demand particularly in Johor, Perak and Kedah.

"So there is no overhang of all Malaysian properties, the overhang are only in specific locations, places that are not easily saleable so these overhang units will not go down when there is no demand for properties at these undesirable locations," he said.

Jagdeep said there was a consistent drop in overhang units in Penang each year. 

"The overhang units in Penang have seen a drop from 3,816 units in the second quarter of 2020 to 3,007 units in the third quarter," he said.

On the other hand, he said Penang recorded a 123 per cent increase in residential property transactions in the third quarter of 2020 compared to the second quarter of 2020.

A total 1,545 residential property transactions were recorded in the second quarter of 2020 and this increased to 3,446 transactions in the third quarter. 

He believed the spike was also contributed in part by the home ownership campaign, held from June 2020 to June 2021, which offered a waiver on real property gains tax (RPGT) and lower interest rates. 

"This year will be a promising year especially with the economic recovery where a majority of the industries believe that the affordable housing segment will be the contributing factor to the recovery," he said.

He said the affordable housing category only has 58 overhang units valued at RM10.29 million. 

"During the movement control order, the offer of affordable housing units continued to be made to eligible applicants and in fact, we saw an increase in applications for affordable housing units," he said.

As part of the Penang2030 vision, Jagdeep said the state is aiming to build 220,000 affordable housing units. 

Since 2008, he said a total 113,960 units have been planned with 38,149 units already completed, 18,519 units currently under construction and 57,292 more under planning. 

He added that the state has identified five plots of lands covering nearly 73 acres on which the state will continue to build at least 10,000 units of affordable housing.

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