Penang reduces affordable home prices by 10 pct

The Penang state executive council has approved measures to ease the cost of living by reducing affordable home prices. The new ceiling limit for the homes will be RM270,000 on the island and RM225,000 on the mainland.

"Affordable home prices will be reduced by 10 percent over the period of one year," said Penang executive councillor Jagdeep Singh Deo (above).

He said the state's economy has been adversely affected by the Covid-19 pandemic and to remedy the situation, certain decisions have been made with regards to the state government's Home Ownership Campaign 2020.

On the island, the current ceiling limit for affordable homes is from RM150,000 to RM300,000. The new ceiling will be from RM135,000 to RM270,000.

On the mainland (Seberang Perai), the current ceiling for affordable homes is from RM150,000 to RM250,000. The new ceiling will be from RM135,000 to RM225,000.

Jagdeep added the state exco also decided to continue maintaining low and medium-cost apartment unit prices at RM42,000 and RM72,500 respectively.

"This is compared to other states which have raised the costs of these two categories of units to RM60,000 and RM100,000," he said.

The Datuk Keramat assemblyperson stated last month that Penang had so far approved projects worth RM250.2 million in the housing sector.

He added that another RM20.75 million was approved by the federal government and both amounts will be used to implement private and public housing projects.

Jagdeep said Penang's vision is to ensure a sufficient supply of affordable housing in the state with a target to provide 180,000 units by 2030.

"To date, we have 105,719 units, where 30,191 are completed, 24,098 under construction and 51,432 under planning or pending approval," he said, adding that the size of the units will be maintained at 850 sq ft (79 sq m).

However, Jagdeep said developers who wanted to keep the ceiling price of affordable homes at RM300,000 and RM250,000 were told to supply larger units at 900 sq ft (83.6 sq m).

"They are also to add more public amenities for the benefit of buyers such as recreational spaces, multipurpose halls, playgrounds for children, recreation rooms for senior citizens, library or reading rooms, gymnasiums and swimming pools," he said.

"We are also required to ensure that the quality of affordable housing adheres to the Construction Industry Development Board's Quality Assessment System with a Construction or 'Qlassic' rating score of not less than 70 percent," he said.

"This is to ensure that the quality of the development is maintained despite the reduction in house prices," Jagdeep said.

Meanwhile, there are currently 3,043 units of residential overhang worth RM2.6 billion in Penang.

Jagdeep said to encourage the sale of these units, the price ceiling reduction allowed for foreign buyers will stay for a year.

For stratified properties on the island, the ceiling purchase price for foreigners will be reduced from RM1 million to RM800,000 and on the mainland from RM500,000 to RM400,000.

For landed properties available to foreign buyers, the ceiling price on the island will be reduced from RM3 million to RM1.8 million and on the mainland from RM1 million to RM750,000.

"It is worth noting that lowering the ceiling price for real estate purchases for foreigners is justified by taking into account minimum ceiling limits set by the federal government," Jagdeep said.

"Penang has a higher land value and the size of the land suitable for development is limited. The balancing act between disposing of the overhang units and the interest of local buyers needs to be considered," he added.

"Based on the analysis of the National Property Information Centre, from 2017 to the first quarter of 2020, Penang showed a significant and consistent decline of unsold units at 22.3 percent. 

"This compared to Johor, Selangor, and Perak which saw an increase of unsold units at 24.9 percent, 30.5 percent, and 116.1 percent respectively," said Jagdeep. - Mkini