The Penang property market, inactive since mid last year, is stirring. After months of lying low, the more aggressive developers are back with new launches, this time armed with innovative financing packages they hope will woo prospective buyers adopting a wait-and-see stance.

Prices on the secondary market are down. Rising unemployment due mainly to the closure or downsizing of manufacturing operations hit by the global credit meltdown are expected to drive property prices down by 10% or so this year, according to Penang-based Raine & Horne International Zaki + Partners’ Michael Geh.

The dip, he says, is likely to occur in addresses with speculative elements and he identifies these as Bayan Lepas, Bukit Gambier and Sungai Dua (southwest district), Gurney Drive and Batu Feringghi (north east district).

Presenting The Edge/Raine & Horne International Zaki + Partners Penang Housing Property Monitor for 4Q2008, Geh notes that buying interest practically dried up during the period under review while construction of existing projects slowed down. The number of completed apartments has also dipped.

As expected, Penang commercial real estate is also feeling the pinch. Geh says for instance, Queensbay Mall’s ground floor units sized from 350 sq ft to 600 sq ft were sold for between RM2,450 psf and RM2,700 psf in 2007. Last year, however, a unit changed hands for just RM2,200 psf.

Sampling for the Penang Housing Property Monitor reveals that prices in most areas surveyed stayed unchanged from the previous quarter, due to very few or no transactions.

On a more positive note, Geh points to a 4.2% rise to 3.46 million in tourist arrivals last year from 2007. Greater tourism activity, Geh adds, will spur the demand for tourism-related property projects.

Read the full report on the Housing Monitor in the March 2 issue of City & Country, the property pullout of The Edge Malaysia.