GEORGE TOWN, March 26 — Tighter borrowing rules and the government’s curbs on property speculation is set to cause an influx into the secondary home market and lower prices, said the Malaysian Institute of Estate Agents (MIEA).

According to the Penang chapter of the property agents body, prices in the secondary market — previously owned houses in matured locations and established residential areas — could fall by as much as 15 per cent.

“This year, we will see an emerging market of properties being put up for sale by investors who had been buying up new properties under the Developers Interest Bearing Scheme (DIBS) in 2011,” said MIEA Penang committee member Michael Geh in a press conference today.

Referring to these properties as “post-DIBS properties”, Geh said these units will probably make up 30 per cent of the secondary market in the property sector.

DIBS is a structure under which developers paid for interest payments prior to the completion of the property. It will be discontinued as part of measures announced in Budget 2014.

There are two main drivers of the property sector: the primary market, which are new property launches by developers with only 30 per cent market share, and the secondary market with 70 per cent market share.

With the influx of post-DIBS properties from investors anxious to dispose of their investments, Geh said this will increase the number of units up for sale in the secondary market.

Coupled with the tightening credit regulations making it harder for home buyers to get housing loans, he said the prices of these secondary properties will drop by about 15 per cent compared to last year.

Paradoxically, cheaper housing need not mean an increase in transactions.

“We also expect to see a decrease of transactions by 15 per cent for the first half of this year due to the credit restrictions in which home buyers couldn’t get loans to purchase homes,” he said.

This year, the secondary market in Penang is expected to offer up to 20,000 units of housing within a price range of RM50,000 and RM3 million per unit.

Though the market is the main driving force of the property sector, it is often overlooked and prices of secondary properties have remained stable throughout the years without any extreme fluctuations.

Geh, in announcing an upcoming Malaysian Secondary Property Exhibition (MASPEX) Penang 2014, said the supply of secondary properties is between 14,000 to 20,000 units each year with an 80 per cent sales rate.

“The property sector has been on a slow downward slide in the past one and a half years and we are now in the midst of the slow downturn,” he said.

This is evidenced by the secondary property transactions, which decreased in the last three years.

In 2012, a total 15,964 unit worth a total RM5.26 billion were transacted which was lower than in 2011, where a total 16,939 units worth a total RM4.9 billion were sold.

“Last year, between January and June, a total 7,087 secondary property units worth a total RM2.63 billion, were sold,” Geh revealed, saying this could mean the whole 2013 transactions of the secondary market could be around 14,000 units, lower than in 2012.

Geh said many home buyers overlooked the secondary market and are often drawn into checking out the primary market only to turn away disappointed as many new project launches are above affordable range.

“This is why MASPEX Penang is important. It will bring affordable secondary properties to all segments of the society from those seeking below RM200,000 houses to those looking for homes in matured locations,” Geh, who is also MASPEX Penang 2014 organising chairman, said.

MASPEX Penang 2014 will be held at Penang Times Square between June 20 and 22.

They are inviting interested real estate agents to participate in the exhibition, which will have a total 30 booths.

Public talks on properties and the property market outlook will also be held during the three day event.

Additional information on MASPEX Penang 2014 in available on the website, www.miea.com.my.