Malaysia: Penang to revise affording housing prices to below RM300,000

• Apr 27, 2020

GEORGE TOWN, April 27 — Penang will be reviewing its affordable housing price to below RM300,000 and increasing the number of rent-to-own units for first-time homebuyers after the movement control order (MCO) is lifted, state exco Jagdeep Singh Deo announced today.

The state Housing, Local Government and Town and Country Planning Committee chairman said the housing industry was badly impacted by the MCO and Covid-19 pandemic. 

He said housebuyers’ capabilities to purchase their own homes will also be impacted so he had suggested that the affordable housing ceiling prices in Penang be reduced further.

“The current ceiling of RM300,000 on the island and RM250,000 on the mainland will be reviewed and reduced by a certain percentage so that it can be accessible to first-time homebuyers,” he said during a press conference in Komtar today.

The Penang lawmaker said he will be proposing this to the state exco and Penang Chief Minister Chow Kon Yeow for approval.

He said the housing department and his office will also be engaging with industry stakeholders such as having roundtable discussions to include groups like Real Estate Housing and Developers’ Association (Rehda), the various chambers of commerce and the local authorities on the mechanics of reviewing the affordable housing ceiling prices.

“Maybe we can look at packages such as reducing the prices for extra car parks or reducing the prices for renovation packages of these units or review the pricing of basic units,” he said.

Jagdeep said the MCO has impacted the income of many people especially when they were not able to work and this will impact their buying capacity.

“Housing is a basic right of everyone, every person needs a roof over their heads, so to help this group of people who are affected economically, the state will increase the number of rent-to-own projects for the lower income group,” he said.

He said currently, there are 2,088 rent-to-own (RTO) units in Penang and the state had a target of offering 18,000 RTO units by 2030.

Due to the impact of Covid-19 and MCO, he said the housing department will speed up the process of procuring more units to be converted into RTO units.

“I have instructed the housing department to identify more projects for RTO so that we can take over the projects and offer it as RTO units,” he said.

He added that the department will look at both completed and upcoming projects to be offered as RTO units.

The Penang state government is also looking at introducing incentives for the property sector to clear the number of overhang units in the state which total 3,508 units.

Jagdeep said the overhang units in the state are still manageable and have been decreasing with every quarter.

“Most of the overhang units, about 98 per cent, are priced above the affordable range of RM300,000 so developers who want to clear their overhang must be wise in making decisions to lower their property prices so that people can buy it,” he said.

He said developers must also be prudent in planning upcoming property projects and not priced them above affordable price range.

“We can’t control their pricing but if they want to sell their projects at above RM1 million per unit, they are taking risks and if they end up with overhang, don’t come to us asking for help,” he said.

However, he said the state will still find ways to assist developers to spur the economy as the housing sector, directly and indirectly, assist more than 100 other industries for every unit of housing such as engineers, architects, the supplier of raw materials such as cement, earth, bricks and steel and also post-completion services such as interior designers, landscape architects and gardeners.

He said the state will review its guidelines to give more incentives for the delivery of affordable housing to first-time homebuyers. 

“I will be suggesting a reduction of the ceiling price of properties eligible for foreigners,” he said.

Currently, foreigners can only purchase landed properties worth RM3 million and stratified properties worth RM1 million on the island.

They can purchase landed properties worth RM1 million and stratified properties worth RM500,000 on the mainland. 

“I will be suggesting that we review this pricing so that we can clear the overhang stock as soon as possible,” he said.

Source: https://www.malaymail.com/news/malaysia/2020/04/27/penang-to-revise-affording-housing-prices-to-below-rm300000/1860565