During the first quarter of the year, the Real Estate and Housing Developers’ Association (Rehda) Penang has placed a bullish comment on Penang property market.
Its optimistic sales record from property developers has also proven that foreigners are part of the market segment too. Toh Chin Leong, the Deputy Chairman of Rehda, said that Penang properties are attractively priced and affordable to foreigners because of the low living cost and high stability and security.
Besides, the commencement of the second Penang bridge construction brings a brighter side to the property market too. Now, it is schedule to be completed in September next year. Land prices in Batu Kawan, Batu Maung, Gertak Sanggul, Teluk Kumbar, Bukit Mertajam, Seberang Perai Tengah and Selatan are increasing. Overall, Penang property appreciation is not only considerably doing well on the island, but also on the mainland area.
With the UNESCO World Heritage Site status, Penang is addressed as one of the most ideal cities to live in. Scarce land resource and inflated construction raw materials make the property price unlikely to drop down in the near future. Furthermore, the foreign entrant will likely influence the trend on property prices. Hence, to protect housing benefits of locals, Penang Chieft Minister Lim Guan Eng said his administration is proposing to raise the existing RM500,000 floor price to RM1 million to buy a landed property in Penang island.
This move is based on the currency advantage being hold by foreigners. Instead of prohibiting their participation, it aims to make foreign property buyers to add value and transform Penang into a worthy property market. As foreigners only involve in a small portion of all transactions, it will not draw them off from the market. Survey shows that a majority of foreigners are renting rather than buying a house.
On the other hand, the keen foreign direct investment indicates a problematic shortage of low and medium cost properties for low-income family. Property developers may tend to focus on build higher end homes which can be way above the locals’ affordability level. Obviously, it will cause a difficulty in looking for a suitable home that is priced below RM500,000.
This non-affordability issue must be highlighted because purchasing housing for the next generation is a tradition for Penangites. It is also not a good signal to hear some of the housing financiers have to take up the second generation loan. Toh told that the state government is looking seriously at this matter. He hopes that there are some sorts of incentives encouraging low-to-medium cost housing development projects.
Since many property analysts and researchers reckon that the property price becomes unrealistic, the policy to increase the floor price will hopefully protect the housing interest for the masses. Moreover, the competition for less-than-RM1mil residential properties will be responsively decreased. It will directly push up the landed property values and indirectly benefit our domestic buyers.
Property prices are facing a steep hike until “crazy” level. Control measures must be promptly implemented in order to strike a realistic balance in the blossoming property market. Not only in Penang, but also in every Malaysia states is crucial to do so.
Picture courtesy of: en.wikipedia
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