Penang looks into reducing property prices to stimulate industry

CORONAVIRUS | The Penang Housing Department will look into reducing the price of houses and apartments as a "win-win" situation to help both buyers and developers overcome the effects of Covid-19 pandemic.

State executive councillor on housing Jagdeep Singh Deo (above) said it is undeniable that developers too are badly affected by the movement control order (MCO) which has now been extended to May 12.

Jagdeep said the state administration was also in the process of studying how to provide incentives to developers and buyers in order to stimulate the housing industry.

"We have to balance out the situation, we will review the guidelines on how to further incentivise the delivery of affordable housing," Jagdeep said during a press conference in Komtar today.

"We must realise that building of every unit of housing involves about 100 industries like raw materials, sand and bricks, steel, engineers, architects and interior designers among others.

"We want to ensure that all industries can rise up to fight back against this Covid-19 pandemic," he added. 

Jagdeep said some developers may not be happy with the suggestion to lower the housing price. 

However, he said the proposal would help those who cannot sell their units due to high prices.

Meanwhile, Jagdeep said the state was also looking into property purchasing opportunities for foreigners.

Currently, foreigners can purchase landed properties which are RM3 million or more on the island and RM1 million or more on the mainland.

They can also purchase apartments at RM1 million (or more) on the island, or RM500,000 and above on the mainland.

"We are reviewing the figures downwards to clear the overhang," Jagdeep said.

Prior to the MCO, which was imposed on March 18, he said the overhang figures were at 31,092 unsold units.

The highest overhang figures were found in Johor (5,470 units), Perlis (5,120), Selangor (4,822) and Penang (4,358).

In January, the rent-to-own scheme for housing projects up to RM500,000 was already supposed to be rolled out across Malaysia to address the overhang issue.

Jagdeep said a discussion with all stakeholders including the state exco members, housing agents, and chamber of commerce officials will be held before the price reduction policy is implemented.

"The situation is such that even if we approve housing projects, developers cannot get financial support from banks, nor can they sell their properties as people cannot afford the units," Jagdeep said.

"So, it is better, we all adapt to the new normal. We have to seriously look in price reduction.

"We will rise from the ashes to fight Covid-19," he added. - Mkini