Letters
by Steven
I am a regular employee who works for an international company in Penang Bayan Lepas Free Trade Zone Industrial Area.
I have been working here close to seven years.
What I notice something seriously is the Penang landed housing property is going up tremendously.
I think that it is fair for the housing developers to buy the Penang lands and build whatever they like.
Realizing the Penang land price expensive, of course it is normal scenario to maximize the gain to build either luxury condominiums, three stories link houses or bungalows.
A quick check on the price is going to above RM600,000 and some could reach millions of dollars. As a result, only the upper income community or foreigners (who wants to utilize MMH2) can purchase these types of properties.
Of course one could say that why not we go and purchase the moderate costs of condominiums. Yes, we could do that but when times pass by, and if the person wants to change the quality of life, the what-so-called luxury property will reach RM1,000,000 and above.
Nowadays, it has been a trend for Penang housing developers to build luxury houses only, why they never build medium costs houses?
I just would like to ask for the management to look into this case, and discuss that is there any plans to provide Penangites moderate prices of property so that it can benefit the whole community and not only the minority. I know that the housing developers will not be happy but think of this for benefiting the society.
Below are few of my humble opinions:-
1) Lowering down the sales price
2) Build double or single stories houses instead of three stories houses
3) Come out a new township like Sunway Tunas
Emulate Spore’s success story. There is much one can learn from them.
Run the island like a nation itself. Failing is not an option. That was Harry’s mentality when Spore got kicked out.
Some may not know this, and I might be wrong on the actual law, but the property building law in Penang (or Malaysia, I am not sure) says that you need to build Low Medium Cost houses (LMC) if your project has 150 or more units. Of course, you can just built less than 150 units and get away with the requirement. A very good example would be The Cove in Tanjung Bungah.
If I am not mistaken, The Cove has 149 units, thereby eliminating the responsibility of building LMC. The Cove is also an extremely high density, luxury condominium project, with little open space. I have no idea how they get pass the council.
Therefore, I say we need a change in the law and regulations before real change can be seen in the housing development scene. Currently almost all LMC projects, to me, are unsatisfactory, badly maintained and is done so that the developers can make more money from higher end projects. Almost no property developer see it as a social responsibility. Therefore, mindset needs to change too.
i am from Penang also..it’s see now the housing is unaffordable by medium income family as well… i dont know if got any long term solution..but the housing price definely need some attention…
Actually, almost all if not all the local/state authorities got it all wrong most probably due to corruption or personal interest. Developers sole motivation is profits. it is up to the state authorities to plan and regulate development through plans, policies and tax. In Singapore and UK, they called it Development Tax or charge and DLT resp. They dont discourage development but controlled it through plans, plot ratio and tax. The difference is that they recognise the need for balance. In KL, its called Development Charges. By right, the revenue collected from the development charges and “sale of land” should be used to provide affordable housing to the needy and poor. Instead, DBKL in this case abuse its duties by utilsing its revenue for other purposes. Sale of land should have been through open tender to realise the highest price (like in Singapore where YTL and IOI have successfully bidded) but instead alienate state land to UMNOputras or their cronies for a song in return for kickbacks. Its also very prevalent in Selangor. just look at all the forest reserves in Sg Buloh, Kota damansara, Ayer Hitam, Ulu Langat, Rawang,etcetcetc in Selangor which are fast disappearing. Most of these have been alienated by KToyo and Mike Tyson to UMNo related companies or supporters such as Equine, MKLand, LBS, Talam, PKNS, Worldwide (but not SPSetia, IOI where land is sourced from the market). If there is a political will, all these state land could have been utilised to provide housing for the needy and poor. Yes, Singapore has got it right among many other things unlike Bodohland where corek is the motto of all UMNO/BN politicians. So all blame should go to the state authorities. Of course there are also unscrupulous developers working hand in glove with these corrupted politicians.
run the state like a country – and run the local council with accountability.
Well, economics will tell you that prices is usually the result of Supply and Demand. If you feel that housing prices are unusually high, it’s more likely the result of artificially limiting Supply.
The problem for Penang is that land is limited. You can try to make the island bigger, but that’s not going to be cheap too. You can try to build more low cost housing, but developers are smart people, and if better margins comes from building more expensive houses, then, they will do that. If there is oversupply in any segment, it’s usually a matter of time before prices comes down, or the units left unsold. And no developer wants to have too many unsold units, so, market forces will ensure that they cannot keep building higher end units.
I think it’s better for the Penang government to concentrate on the implications of having expensive housing prices, rather than try to artificially bring prices down. I see a trend where more and more Penangites are buying “cheaper” properties on the Main Land. To me, this is inevitable, and it’s better for the Penang government to recognize that its brothers on the main land are also Penangites.
Many Penangites have this mentality,they think Penang state is an island, they cannot imagine themselves living in Seberang Perai. I have met many of these people. There was once, when the Immigration HQ transferred to the mainland, many Penangites were angry as if the HQ being moved to another state. And there are much more people on the island whom knows very little about places in the mainland than the people on the mainland who knows very well about the roads and the places on the island.
My point is the island population needs to open up their mind and consider setting up home on the mainland. The government can do its share by bringing the bridge toll to a minimum. It will be a catalyst to the development on the island and the state as a whole.
Logic has it that it is a no brainer to pay RM750K for a 2.5 storey terrace house in Penang when you can get it around RM300K on the mainland. But many Penangites insist paying for this amount just to have the privelage to live on the island.
I have no answer to that.
I guess there are two things we can do here. One is to implement a housing scheme similar to Singapore where there are HDB flats/apartments. In the case of Penang, since there’s more land here compared to Singapore, it could be low cost houses instead of low cost flats. We could have private developers or government backed developments on these low cost houses and they can only be given out to Penang residents who have income below a certain threshold. On the MM2H program, I believe it should stay as it encourages foreign talent to come into the country to help spur the development but, of course, this scheme needs to be controlled and there should still be strong emphasis on providing housing for our own people.
Secondly, which is a good point raised by someone earlier is that there’s a big gap in prices between houses in the island and the mainland. The government should encourage development in the mainland by reducing the Penang toll, help reduce traffic congestion in the bridge (perhaps through building a second bridge or have dedicated buses that travels from the mainland to the island) or providing incentives for developers to build houses in the mainland. That way, I believe there would be good balance in terms of population for both Penangites in the mainland as well as in the island.
Some developers in Penang Island who launched the condominium project has used the illegal method. That is to have 2 agreements for S&P. One is for the actual unit size and the other is using the common area or so called accessory of parcel to convert and consider as the housing size in a later stage after OC obtained. Means that the extension work is carried out upon OC obtained. Example for an unit of 1400sf. 1 S&P will only cover for 900sq and the other will cover for another 500sf. Most of the purchaser are not awared the motive of such arrangement because the developer will tell them that it is for the sake of helping the purchaser to reduce the Assessment Rate by MPPP. As we know some banker will not accept to loan if there is two S&P involved. However the purchaser must get the loan from the developer panel banker. I believe it is not right.
How can MPPP close one eye on this or did not take action on this issue?
Yes, I agreed the price of landed property in Penang is not cheap. It boiled down to DEMAND AND SUPPLY. Land are SCARCE IN PENANG, REMEMBER.
As for low cost(RM100k & below), I feel that currently there are over supply of these houses(of couse, I mean apartment). If you were to walk into any apartment block, be it in Ayer Itam, Bayan Lepas or Jelutong are. You will see FOR SALE/RENT sign hanging/paste on the door! Some of these properties are sold at BREAK-EVEN price after taking into consideration of housing loan interest and legal fee! Why? because there are too many “FOR SALE” properties around!
If one seriously want to buy a house, all you have to do is SHOP AROUND, you can get one cheaply through AUCTION SALES too! Of course, location play an important part in property trancsaction. Don’t expect to get a SEA VIEW, BIG BALCONY. SWIMMING POOL, GYM, CCTV etc if you are paying below 100k!
As for luxury project especially along Batu Ferringhi stretch, I personally feel that these project need to be CONTROLLED OR BETTER STLL “STOP”. Most of these properties are bought/rent by foreign, expatriate and those under MMH2. It does not benefited the local and neither does it help the tourism industry. What we want is more GREEN because once it is gone, it is gone forever!
This is just my view.
///1 S&P will only cover for 900sq and the other will cover for another 500sf/// – js.
So what’s description of the property in both S&Ps??? If same description why need 2 agreements??? Surely it cannot be not same : 900sq cannot be described as property “A” and balance of for another 500sf for the same apartment unit of 1400sf cited in your example cannot be described as property “B”….
I don’t understand what you said about 2 sale and purchase agreements (” S&Ps”) for one unit of apartment divided into 2 parts, ie 900sq and the other will cover for another 500sf.
Are you sure it is not one S&P for the whole unit of 1400sf with description of the property and other Deed of Mutual Covenants for use of common property with other common users – as is usual the case involving condominium apartments???
Good, to see common sense in this blog [after some useless and unproductive personal attacks].
Of course, land is scarce on an island, and Penang is an island. Trying to bring down costs artificially can only be done on the expenses of the people, on tax-payers purses. So that should be a no-go. The green parts should remain untouched, without doubt. Therefore, alas, no cheap housing for everyone and anyone in Penang (island).
With respect to ‘green’, and MM2H, there are hordes of people overseas willing to spend heaps of money for environmental-friendly housing. Only, this market needs to be tapped. With the current state government, this is possible. If work can be outsourced to competent contractors, to be set up on reasonable plots, we can ‘kill a few birds with a single stone’:
– Green is being left green
– Investment is happening, competency increased
– Penang gets more attractive
– Job opportunities arise
Until now, the larger part of the country has been robbed and raped by quick setup and buildup of projects, executed in get-rich-quick quality by essentially tidak-apa contractors, who usually had to kick back a large percentage to the well-connected politicians in charge of handing out the permissions.
This change of mindset won’t come overnight, it will not be there tomorrow, and it will cost some seat and even tears. But today, we have the unique chance to accept the challenge, and over a few years change can be visible, with a new shine to the old (former?) Pearl of the Orient.
10 yrs ago (1998) a fresh grad in Penang is getting RM2100
10 yrs later (2008) a fresh grad in Penang is getting RM1800
so how can a Penangites ever afford to own a decent house ? in his dreams ? perhaps …
other advance country are sucking our young generation to work at their place, while we are sucking their old folks to Penang and retire ?
WTF ? Young ppl work and pay tax to the government, while we are attracting retiree through MM2H and what do we get from them ? just to raise up the property price in Penang ?
this situation is not right – thanks to the previous administration in Penang which held power for 18 useless and wasted yrs !
Barisan Rakyat pls do something to rectify this dilemma face by Penangites ! U can only succeed, because we have no other leader to count on !
Staying in a square flat or apartment is not fun !
they forgotten the other side of the equation…. :)
Please run Penang like Singapore, and by the way, we have Seberang Prai as a bonus. Make sure every implemetation has the rakyat in mind. I am sure DAP-PKR-PAS coalition will get the mandate to run Penang again in 2013.
By then, restore the free port status… Langkawi is a joke… hehehe
I totally agree with Cheng. Penang should be made a free port again in order to attract foreign investments. By the way, winning the four states on the West coast of Peninsular Malaysia makes the opposition the owner of two major ports, Penang and Port Klang. Did any see that? With proper management of these ports, these four states can flourish and outbeat the performance of the states controlled by BN.
By then and the next GE, what will the people of the BN controlled states think? They will envy these four states and cast their votes for the opposition and wipe out the useless BN!!!
Penang has only limited land, so therefore of course prices will be high. Especially if left solely to the ‘free market’ as developers want to maximize their profits.Singapore’s HDB Flats is one example of what Penang could follow.
Moving to the mainland would be an option except for ONE major problem: Having to drive everyday to work across the Penang Bridge. The driving distance, the toll and the traffic. The toll is RM7 that means in RM35 a week just for toll alone. Add to that the rising petrol costs and the nightmarish traffic. Moving to the mainland would be the LAST option i would consider.
The only way to encourage more people to move to the mainland: reduce toll price, set up a proper public transit system between the island and mainland and solve the trafiic problems of the bridge (by means of public transit system, widening of the 1st bridge and the construction of the 2nd bridge)
I am afraid that lowering down the house sale price is not going to happen in Penang because the building construction cost and the land cost has increased tremendously recently, unless the government assists in changing some rigid regulation on the buildup density and allowing development on 250 ft above land.
As developable land is very limited in Penang, the land price not surprisingly will be very high. Talk about the hill land only which is located above 250ft from sea level (where not allowed for development) has already reached about RM 20/ft², not to mention those land with good location, easily can be sold at RM 80-180 per square foot. Can you imagine? If my forefather has a piece of land above 10 acres in Penang and pass down to me today, I will become a muliti-millionnaire!!!
And the building materials’ price keep on rising uncontrollably, steel bar used for the reinforced concrete is reaching RM 3200 plus, brc, cement, ready mix concrete’s price (which are the major construction materials) take turn to increase due to oil price hike and shortage of supply. This has cast huge impact on the construction cost. The construction cost per square foot is expected to escalate 10-30 %.
What I am trying to stress on is that instead of attempting to cut cost (which will cause shoddy workmanship, poor quality, etc..), perhaps is time to consider to allow the developer to build more units of houses per one acre of land, where the restriction of 30 units per acre of land to be lifted to 40 or 50 units or more (The developer can spread out the cost by selling more units) . By doing this (frankly speaking, I also do not know how to go about this coz it will involve a lot of the government departments), there will be slight hope that we can see the light from the end of the tunnel that the selling price of Penang residential houses be lowered down.
Correction : steel bar used for the reinforced concrete is reaching RM 3200 plus per tonne.
Penang has a lot of potentials. I was there last year and there are buildings and places catered to the high class. There is even a Gold Coast. Of course this island is not meant for tourists and rich people alone. In other parts of Malaysia, a low cost house can cost something like RM 30,000. This is just a very small house meant for a family with few children. In Kuala Lumpur, the news reported how some people bought low cost houses and rent them out to make money. This is wrong because the low class people do need a house or a flat on their own. The Penang bridge is terrible even though it is a tourist landmark. I was there on the bridge for 1 hour or so before actually getting to Penang’s soil. Probably if there is an emergency service, you cannot depend on the ambulance service any more. I think you should have air service to carry the patient to another hospital if it is necessary. Or else to make Penang into one of the main health care centres so that the patients do not have to go out of the island for treatment if there is no air transport.
For the issue of people buying low cost houses and renting them out for money, Singapore has the potential solution to this problem.
The person who purchases it MUST be the occupant of the HDB unit. I.e. you cannot buy a HDB unit and NOT live in it. HDB units CANNOT be rented out. Anyone who broke these laws would be hauled up. But i believe recent laws have loosened the restrictions allowing people to rent out the units as people became stuck with HDB units they could not get rid off and could do nothing with.
For all those who are talking about running Penang like Singapore, do bear in mind, that as nice as such an idea sounds… Singapore has its own economy, its own taxes, its own trade agreements, its own foreign affairs, its own military, its own police force, its own civil defence force, its own education system, its own well… its own everything really. Even Singapore when it was still in Malaysia had far more autonomy than Penang has.
katdog, that rule has changed. I know some people who own HDB units and do not live in them, but rent them out instead. Don’t forget, that since foreigners cannnot own HDB units, the only way they can afford affordable housing over there is to rent it out from da locals.
the most important things is INCOME…
if you’ve greater INCOME, you may have greater CHOICE…
first thing first… find more investment into Penang this will help Penang economy to grow, of course the civil servant must work harder to ensure safer Penang and also efficient governance…
that are the indicators for other States (e.g. Sabah & Sarawak) trying to achieve… real unfortunate, they had crossed onto wrong box… :-)
Two campaigns that will works and it’s low cost.
One, If I am Lim Guan Eng, I will tell Penangites to clean up the Island. Yes, I meant the rubbish.
Two, tourism. Tourist, tourist and more tourist. No, not sex-tourism.
Oh, make it three. Safety, make Penang safe! You can do it even if police do not cooperate.
1) Not sure whether the new Penang govt will revive & review the Pernas project at Teluk Air Tawar, Bworth Penang?
Pernas already went bankrupt some time ago just like Queensbay mall original developer, fortunately they are able to find new developer to take over the project, i heard Singapore company will start working on T.A.T project soon. It has been more than 8 yrs i still have the 10% deposit slip from Pernas, even went to see Mr. Goh Choon Lai at his office when Pernas office still available at Midlands. All of sudden everyone just pretend nothing has happen.
2) 7 yrs ago when i completed my studies from overseas, the MNC is paying RM 1,450 for intern, then RM 1,800 for beginner well at that time the OT is very good, you can easily earn another RM 200-300 depend on your workloads. After 7 yrs, i earned more than doubled than the intern but life is also pretty tough as things are getting expensive and commitment were growing. My wife and me were working and we can afford a 1,200 sq feet apartment, two car with 1.6 cc engines.
The US sub-prime crisis in graphics – Part 1
The US sub-prime mortgage crisis has lead to plunging property prices, a slowdown in the US economy, and billions in losses by banks. It stems from a fundamental change in the way mortgages are funded. There seems to be no end to this and with the collapse of the investment banking giant Bear Stearn last week, it is believed more is to come.
It is inevitable the there is going to be a global economic crisis unlike the 1997 crash which started in the stock market, this has started in the core of the economy – Housing. In no time it will see our shores and our new cabinet has to be ready to face it. This two part article is to give us Malaysians a better understanding of this crisis preempt our government.
How it went wrong!
visit http://www.wagthedog-malaysia.blogspot.com
The supply demand game is due to the previous govt have always been paying more attention to the island.
Objectively, I think a few things needs to be done…
– there must be cheap/free connectivity between the island to the mainland (a good example is Seoul, Korea which is connected between the north and south of the river by more than 20 bridges, free of toll)
-there must be affordable public transport to connect both(at present there is only limited bus service, taxis are extremely $$, I wonder why, just to cross the bridge…can the council finx a fix to this problem?
-most of the upmarket development and critical good development are almost always focus on the island than mainland (e.g. good hospitals, shopping centres etc)
-level of hygene on the mainland needs to be improved, too many chicken/pig farms near housing area/towns causing drainage problem, too many flies & foul smell
One good concept that can be considered is, like the Factory Outlets in US which are often located away from the city. Their attraction is selling good branded goods in a location which the rental is cheap This helps to develop the surrounding area by bringing more city dwellers over to shop.
There must be more attractions on the mainland to attract islanders to buy houses there. To attract tourist, you need to understand what the tourist wants to visit/do, not just blindly building things that no one wants to go.
Steven,
I am not sure what exactly you people want the Penang Government to do on housing. Land is scarce for state like Penang. If one can’t afford landed property, one just has to live in a flat. This is a reality. One thing you ought to ask the state government is to have proper management of housing estate to ensure cleanliness, well maintained parks for recreation areas near the apartments and flats, safety in terms of proper lighting, lift and proper access. Look to Singapore for example. Change your lifestyle, no more landed property.
Dear Fido,
Free bridges will never come to Malaysian, as cronies already eat up majority of the funds thru concession companies. We are paying RM 7 per entry to Island. Here’s my calculation, working day 244 days x RM 7 = RM 1,708 per year per person working in MNC Mainland. What is the average vehicles entry to Penang island per day? assuming 10,000 per day at RM 7 = RM 70,000 per year (356 days) generate RM 24.9 million. It has been 17 years since the bridge was built, the bridges should have already generated RM 423.3 million.
lakilompat,
But that was in the past, I believe we can make a difference.
Yes, the toll generated RM400+ million but most of it landed into someone’s pocket, the benefit did not go back to the public. This is a sheer mismanagement of public’s funds.
Dear Fido,
As a Penangites, i felt so sad, now the bridge is old, and jammed every Friday. Will there be a day the Rakyat can see how many car pass thru that bridge, and how much funds they’ve collected?
Anyone know how much it cost 17 yrs ago to build the Penang Bridge?
So long there is no bubble in the property prices, let the invisible hands decide on the prices. If there is no demand, how can the houses in Penang island be so expensive?
I also agree with other writers that Penang government should study and consider Singapore’s HDB model for housing development. By the way, the problem of messy public transportation system in Penang should be tackled with urgency. Your ability to govern Penang will be manifested in solving the public transport problems.
Sir,
Perhaps YAB Lim Guan Eng should have a blog too. [-o<
Steven voiced out the concerns of Penang. Well done dude.
And as a Penangite who is looking for a house, i totally agree with him.
In todays world, if u want a decent house in a decent location, i think
u need to have the talent of S***ing out gold from your behind. Houses
are built with quality but the price? its absolutely ridiculous. And to
make matters worse, houses in areas such teluk kumbar and the
inner areas are already going above half a million.
Please help all the penangites that are having problem to own a
property on the island itself.
The economic theory ( supply and demand ) do play a part in the escalating property price in Penang island. One reason could be the previous Authority had work secretly with the developer to jack up prices knowing well of the scarcity of land in the island. A look at Jeff Ooi blog might offer an insight to the inherited problem .. http://www.jeffooi.com
How can this occur when the bank can auction off your property AFTER you have paid your dues to the developer? Where is the Housing Minister?
http://www.nst.com.my/Current_News/NST/Monday/NewsBreak/20080324182349/Article/index_html
The US sub-prime crisis in graphics – Part 1 & 2
The US sub-prime mortgage crisis has lead to plunging property prices, a slowdown in the US economy, and billions in losses by banks. It stems from a fundamental change in the way mortgages are funded. There seems to be no end to this and with the collapse of the investment banking giant Bear Stearn last week, it is believed more is to come.
It is inevitable the there is going to be a global economic crisis unlike the 1997 crash which started in the stock market, this has started in the core of the economy – Housing. In no time it will see our shores and our new cabinet has to be ready to face it. This two part article is to give us Malaysians a better understanding of this crisis preempt our government.
How it went wrong!
visit http://www.wagthedog-malaysia.blogspot.com
I have lived in Penang for more than 30 years and I do feel the same way as Steven on the rising prices of landed properties on the Penang Island. It’s almost impossible for an average working class to own a landed property on the island today.
However, I do have some different thoughts that I would like to share.
(1) Reducing landed properties prices.
Generally a decent landed property is priced RM600K and above on the island. Now looks like there is a pledge to reduce the price. Let me illiustrate an example here. Say, if the government decided to work with developers to reduce the price of landed properties. The government give out the land to the developer for free or at a low cost, and the developer is willing to forgo some profits, and build decent landed properties for the price of RM400K. Now it sounds more affordable.
What about the people who have worked their butt off and got a 30 year mortgage and purchased a RM600K house? They will be left crying as their property prices will drop due to new supply of cheaper houses. Is this fair to them? Do remember that majority of house owners on the island are locals too and most of them worked hard to finance their landed properties. Subsidising the lower income group by punishing the people who worked hard to achieve their dreams? No right or wrong answer, but think about it.
(2) Affordable housing in Penang Island
For the benefits of those who do not live in Penang, there are plenty of affordable housing in the form of apartments/flats on the island (as mentioned by one of the previous post as well). I personally live in a 700sf apartment with swimming pool, 2 parking lots and 24 hr security. If you are willing to pay RM110K you can be my neighbor. Areas like Relau, Jelutong, Paya Terubong has huge supplies of medium-low cost apartments. There are also a number of low-cost (but private-developed) flats in the same areas, for RM70-80K or less. I am not making up the numbers as I do check property prices regularly.
(3) Be realistic on what we can afford
If you are just an average working class and just wish to keep a secured job and not taking much risk, let’s be realistic and not aim to move into the multi-million condos in gurney or bungalows at Bukit Jambul.
Look at developed countries/cities like Singapore, Hong Kong, Tokyo etc. Who lives in landed properties? Rich people do. Not working class. As the population expands, it is inevitable that landed properties become more and more expensive. It’s either you work harder and smarter to get big bucks to pay for it, or, you live in a high rise. Well, it’s not that bad afterall for Penang, considering the fact that you still can get affordable landed properties in the mainland (Butterworth) for RM300K. And if you are willing to travel a little further, you can find RM200K houses in Kulim, Sungai Petani etc.
And, good luck for those who plan to get landed properties on the island, by the way you also contributed to the rising price :-)
Get landed properties on the island, by the way you also contributed to the rising price. Rising prices are due to corruptions, how much it cost to prevent the govt. agency to sabotage its foreigner workers.