Among the properties are bungalows in Jalan Vermont, Jalan Cantonment and a mansion along Jalan Utama. These properties are priced between RM6 million and RM25 million.

THE prospects for upmarket properties in Penang look uncertain.

Checks showed that there are several luxury properties in George Town sitting in the market for more than a year now.

Among the properties are bungalows in Jalan Vermont, Jalan Cantonment and a mansion along Jalan Utama. These properties are priced between RM6 million and RM25 million.

A real estate agent dealing with some of the bungalows, and who spoke on condition of anonymity, said they have been in the market for almost five years.

He said the reason they are not selling, apart from the high price, is because they have aged.

“The mansion for example, is quite old and would require a lot of renovation to make it habitable again. Also, the size of the mansion is comparatively smaller than properties which are of lesser value.

“Coupled with the fact that the price is rather steep, many potential buyers are put off from buying them. Properties like this are usually purchased for commercial purposes, but we have yet to make a sale,” he said.

Market worsening?

The local real estate market is performing at its lowest this year.

This is evident from statistics released by Raine & Horne International Zaki & Partners Sdn Bhd which revealed that there were only 76,163 properties transacted in Malaysia in the first quarter compared with the same period last year, which saw 80,008 transactions.

In 2012, 104,730 properties were transacted.

In Penang, the property market took a hit with only 4,015 properties transacted in the first quarter. This is 267 transactions less compared with the same period last year, which recorded 4,278 deals, and 2,992 less compared with the same period in 2012.

Of the total 4,015 deals, 2,898 involved residential units.

Raine & Horne International Zaki & Partners Sdn. Bhd, Senior Partner Michael Geh said despite the low performance, the property market was not in a glut.

“There has been a slowdown of market activities. This is not due to glut of properties. The buyers’ affordability has been reduced. The loan eligibility of home buyers is a big issue now,” he said.

According to Geh, there is still strong interest in the market where potential buyers who enquire about a property actually make an offer to purchase it.

He, however, noted that most of the sales were rejected as they failed to get their loans approved by the banks.

“We have been saying it for years that the difficulty in getting loans is the main cause for the slowdown in the property market,” he said.

Property agent Danny Khor said the increased difficulty in obtaining bank loans is a cause of concern as property transactions are declining.

He sighted a case where at least eight potential home buyers had their loans rejected in the past six months.

A majority of them had applied for housing loans of not more than RM400,000 each.

“They feel that once their application is rejected by one bank, there is no point in applying from other banks. When this happens, the house is put back in the market for selling,” he said.

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