Why is Penang forecasting a higher population in 2030 than the Statistics Department’s projection?

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Ah, population. Much of our development planning for housing and mobility including transport infrastructure hinges on what we expect our future population to be.

If the population forecast is unrealistically higher, then we would be planning and building more homes, highways and transport infrastructure than what we would actually need – which would be a colossal waste of our resources. Think of the property glut and over-the-top spending on transport infrastructure.

Let’s take a look at the population of the state of Penang;

Present population (Department of Statistics): 1.75m (2017)

Department of Statistics forecasts 1.98m (2030 revised) and 2.05m (2035)

BUT:

Survey report, Penang Structure Plan projects 2.53m (2035)
SRS Consortium (for land reclamation and transport infrastructure) projects 2.45m (2030)

Immediately, we can see there is a disparity of about half a million between the Department of Statistics’ figures and those projected by others.

Those higher projections of about 2.5m appear to be based on historical growth rates for the population extrapolated forward, whereas the Department of Statistics projects a much lower figure of around 2.0m.

Which is more accurate?

The Department of Statistics has access to more reliable and up-to-date data on migration, mortality and fertility. It also uses more sophisticated, internationally recognised projection techniques looking into each age group and gender.

Declining fertility

Of interest are the fertility rate and migration.

Let us look at the fertility rate, which is the average number of children each woman can be expected to have. All other things being equal, you would need a fertility rate of 2.1 for the population to replace itself ie for the population to remain stable.

Back in 1995, the total fertility rate in Penang in 1995 was 2.5. No wonder the population was growing steadily back then.

The fertility rate in Penang has plunged below the crucial 2.1 mark as people have fewer children.

But by 2015, the fertility rate had plunged by 40 per cent to just 1.5. (In Singapore, the total fertility rate is 1.24 and Hong Kong 1.2.)  Just look around at your friends and relatives and see how few children they have now compared to the previous generation. (That’s not surprising, given the higher cost of living and higher level of education.) That’s not all. The Department of Statistics projects the fertility rate for Penang to drop even further to just 1.3 in 2040.

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So the natural population of Penang is hardly soaring!

Now, let’s look at migrants. How you project the population of Penang depends largely on this.

Bear in mind over the last 20 years (a period which covers times of economic boom as well as lean years), the average net inward migration (those settling in Penang minus those leaving Penang) was about 9,300 per year. Net migration for the period from 2010 to 2015 was even lower than this figure.

So the declining fertility rate and the low net migration into Penang help explain why the Department of Statistics projects only a small growth in the population of Penang from now. In fact, we are an aging population with the percentage of those over 60 rising from 9 per cent in 2017 to 15 per cent in 2030.

Now, why does this matter? If you ask most people, chances are they think that the population of Penang is rapidly expanding. This misconception is reinforced by state and developers’ propaganda that makes us believe that we have no choice but to reclaim more land and increase property density to cope with a surge in population.

But the reality is different: the Penang population is only rising very gradually due to a small net inward migration. After all, how many Malaysians can afford the state’s exorbitant property prices?

Build and ‘they’ will come?

So… if our population is hardly soaring – and instead increasing ever so slightly – do we really need to spend RM46bn on transport infrastructure which includes a six-lane north-south highway hugging Penang Hill and an eight-lane highway along Gurney Drive?

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Do we really need to increase the maximum property development density by over four times (from 30 units per acre to 128)? Do we need to get rid of lower-density secondary corridors to raise the density in many places?

Do we really need another 381,000 homes until 2035 (as suggested in the Penang Structure Plan), which would double the number of existing homes of 387,000 (as recorded in the 2010 census) – and worsen the property glut.

Who are we building for? Is Penang adopting a build-and-they-will-come policy? But who are “They”? Wealthy foreigners?

I put across a couple of related questions on two different occasions:

My question during a Penang Transport Council workshop, which I attended as a representative of Aliran, in September 2016:

The three proposed artificial islands in the south of Penang Island are expected to house some 300,000 people. Where are these people coming from?

The answer I got was something along these lines: Well, the population is expected to grow because of economic activity, and these people will need a place to stay.

Then I asked, who are these 300,000 people that are expected to settle on these three islands – when only about 20 per cent of the homes on these three islands are going to be “affordable”? Who are we building for, really?

Are we going to create enclaves for the rich, especially on the second and third islands farther away from the noisy airport and the industrial zone, where there would very likely be fewer “affordable” homes amidst the exclusive condos and houses? (Most of the “affordable” homes will be concentrated in the first island nearest to Bayan Lepas.)

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Someone from the planning section conceded that indeed these artificial islands in the south would cater mainly for the rich, especially the second and third islands. We knew that, didn’t we. But to actually hear them admitting it was something else.

Then at the Penang Structure Plan review briefing at Komtar on 8 December 2016, I asked why they were using a population forecast that was much higher than the Department of Statistics’ projection for Penang in 2030.

The answer: It would be better to plan for more people.

“Better” in what way and for whom I am not sure. Wouldn’t a much higher projected population figure lead to the creation of a glut in the property market, more towers and higher density than otherwise necessary?

Is the Penang Structure Plan in reality a developers’ plan that makes uses of the Town and Country Planning Act to justify more property development than necessary, as one observer suggested?

Does the planning department really think its forecast is more accurate than the Department of Statistics? Should they have a debate with the Department of Statistics about whose figure is more accurate?

With a population that is only creeping upwards, it is time to explore alternative, more sustainable development models, including the concept of a steady state economy.

Maybe then we won’t end up with a situation like this, as reported in The Edge – after all the propaganda we had been fed earlier:

The Business Processing Outsourcing Prime (BPO Prime) and Penang International Technology Park (PITP) projects worth a combined RM11.3 billion, which involve the Penang Development Corp (PDC) and Singapore’s Temasek Holdings Private Ltd, have been deferred due to current property market conditions.

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22 COMMENTS

  1. The Gerakan and the MCA and MIC got zero for two straight elections and in all probability will get zero again this coming elections. Hence the only way they can control the rakyat in Penang is to impose federal rule in violation of the federal constitution. Rejected again and again by the rakyat of Penang and held in contempt for their incompetence and corrupted administration the UMNO /BN coalition which has looted the nation of its wealth is trying tp undermine the will of the people Penang who will reject them.

    • MCA and Gerakan are hoping to swap seats with Umno to stand in muslim majority area, knowing that they have lost the support of non-malays. How shameful?

  2. Penang will continue to attract more local Chinese immigrants from the neighbouring states like Kedah, Perlis and Perak if these states continue to be ruled by BN.

  3. GEORGE TOWN – Ketua Menteri, Y.A.B. Tuan Lim Guan Eng menasihati Pengerusi UMNO Pulau Pinang, Datuk Seri Zainal Abidin Osman supaya tidak mengaitkan keputusan syarikat pelaburan dari Singapura, Temasek Holdings untuk menangguhkan projek Business Processing Outsourcing Prime (BPO Prime) dan Taman Teknologi Antarabangsa Pulau Pinang (PITP) di kawasan komersil utama di Batu Kawan dan Bayan Baru dengan keyakinan pelabur terhadap Pulau Pinang.

    Guan Eng berkata, kenyataan Zainal Abidin itu adalah tidak berasas memandangkan Temasek Holdings (Temasek) hanya menangguhkan projek tersebut buat sementara waktu dan bukannya menarik diri.

    “Dia (Zainal Abidin) tidak tahu latar belakang (projek berkaitan) dan hanya buat kritikan.

    “Itulah masalah pemimpin BN (Barisan Nasional) apabila terlalu mendewakan pelabur-pelabur asing, sedangkan kita (Kerajaan Negeri Pakatan Harapan Pulau Pinang) memilih pelabur berdasarkan syarat-syarat (tertentu) dan memenuhi keperluan negeri dan rakyat Pulau Pinang,” ujarnya dalam sidang media di Komtar.

    Hadir sama, barisan Exco Kerajaan Negeri dan Pengarah investPenang (iP) yang juga Penasihat Khas Ekonomi kepada Ketua Menteri, Datuk Seri Lee Kah Choon.

    Dalam perkembangan sama, Guan Eng turut mengulas laporan akhbar perdana berhubung usahasama syarikat pemaju hartanah, Eco World Development Group Berhad (EW) dengan Kumpulan Wang Simpanan Pekerja (KWSP) membangunkan 150 hektar tanah di Batu Kawan dengan nilai pembangunan kasar (GDV) berjumlah RM7.8 bilion.

    “Pengumuman pelaburan baru ini (usahasama EW dan KWSP) membuktikan bahawa Pulau Pinang masih mendapat keyakinan daripada semua pihak termasuk pelabur-pelabur tempatan yang berkualiti.

    “(Dan) inilah yang kita (Kerajaan Negeri) mahukan, pelabur yang berkualiti dan memenuhi keperluan rakyat dan negeri…lagipun kritikan beliau (Zainal Abidin) yang menyatakan pelabur sudah hilang keyakinan untuk teruskan pelaburan di negeri ini adalah tidak benar,” respons beliau yang turut merujuk kepada artikel yang menerbitkan komen Zainal Abidin itu dalam akhbar-akhbar utama.

    Dalam pada itu, Kah Choon ketika diminta mengulas mengenai dakwaan berkaitan menyatakan bahawa, Zainal Abidin hanya memberikan takrifan negatif terhadap negeri ini, walhal Pulau Pinang merupakan antara negeri terbaik dari segi pelaburan dan pembangunan di Malaysia meskipun keadaan ekonomi dunia kini tidak menentu.
    “Saya tidak tahu kenapa dia (Zainal Abidin) menimbulkan persoalan sedemikian sedangkan projek itu cuma ditangguhkan untuk memastikan keberkesanan pelaksanaannya pada masa hadapan.

    “Projek itu ditangguhkan sementara untuk memberi laluan terhadap perbincangan yang lebih terperinci demi rakyat dan negeri Pulau Pinang,” jelas beliau.

    • According to Oriental Press today, Temasik insisted on more joint property development in Penang as part of the conditions for BPO deal. So good that Penang government is suspending the negotiations.

  4. Gerakan should invite Najib to hold his TN50 Town house-styled dialogue session in Penang to offer BN’s vision for Penang for the next 30 years. It will offera choice for Penangites to compare withthe current offerings by Pakatan government in Penang. MCA should not participate as it lacks ambition and happily settled and satisfied with the present 3 minister positions.

    • Gerakan needs to elaborate how come Sungai Nibong Bus Terminal cost in excess of RM500million during their time in power, as many now suspect potential “leakage” when present SPICE project cost RM600+million, take into account inflation after 10 years of comparison.
      Present young Gerakan leaders need to admit past misdeeds of their ex elderly leaders otherwise they cannot win the hearts of the commoners now bleeding in barang naik situations.

  5. The same “Who will take up these houses? in Johor.

    Expert sees spectre of ghost towns in Johor
    http://www.freemalaysiatoday.com/category/nation/2017/01/24/expert-sees-spectre-of-ghost-towns-in-johor/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+FreeMalaysiaToday+%28FMT+News%29

    PETALING JAYA: A veteran property consultant has warned that many places in Johor will become ghosts towns because of the top-down nature of development there, particularly in the Iskandar region.
    In an interview with FMT, chartered surveyor Ernest Cheong said he feared there wouldn’t be enough people to occupy the thousands of houses and commercial buildings being constructed.
    “Just Forest City alone is estimated to be able to house some 700,000 people,” he said. “Who will take up these houses? Johoreans? That is unlikely. There are fewer than two million locals in Johor Bahru, and that’s a generous estimate. Many of them already own houses.”
    He noted that some people expected Singapore and Chinese nationals to move in, but he said it was doubtful that enough of them would do so.
    “Singaporeans who are rich wouldn’t want to move to Iskandar as they can live anywhere else around the world. Those who aren’t rich may not find it feasible to move to Iskandar and commute across the island every day. It is costly and time consuming.”
    He also said it was doubtful that Singaporeans wishing to migrate would choose to move to Malaysia.
    “People usually want to migrate to places where they believe the grass is greener. Why would Singaporeans, who enjoy a higher standard of living there, want to come here? It doesn’t make sense.”
    As for Chinese nationals, Cheong said Iskandar would be just one of the many places they would have properties in.
    He said many rich Chinese had a number of properties in cities around the world and would look at Iskandar as a place to invest in rather than to relocate to.
    “So, even if all the units being developed by Chinese companies are sold, who will stay there?
    “There is a demand for affordable housing from locals, but the Chinese developers aren’t building affordable housing. How many can afford to buy or rent these places?”
    Cheong, who has worked at his trade for more than 40 years, said he was concerned that a low rate of occupancy in the Iskandar region would affect the value of surrounding properties “because no one wants to stay in an empty neighbourhood”.
    “Sadly, this is the reality of development in Malaysia,” he said. “Developers think they can just build on a plot of land and people will come in. They don’t understand that demand is not just about people wanting homes; it’s about them wanting homes they can afford.”
    Data from the National Property Information Centre show that developers in Johor plan to build more than 350,000 private homes in the state. Some of these are already under construction.

    • Not all PRC Chinese want to stay in their homeland if they want to safeguard their ill-gotten gains and black money when President Xi is ‘beating tigers’ to curb corruption. Malaysia being a corrupted country is a sound place for them to park their black money, all in cash stashing in the condominiums bought. No hot has many international schools that these PRC folks could enrol their children to study.

      • Some developers in Iskandar have dropped prices to move leftover apartments, adding downward pressure on valuations. Buyers who took deferred payment plans and paid down less than 10% of purchase prices are walking away from their investments. Some investors have gone further, requesting developers to refund their downpayments by citing the inability to secure mortgages as the banks have tightened up on loans to foreigners.

    • Many SingLanders invested (to speculate) in Johor properties 5 years ago when the Ringgit was not free-falling. And till now, many of these speculators could not sell as many Johoreans cannot afford such high-end properties.
      Now, with the falling Ringgit (depreciating 35+%), even to sell any Johor property at 1st buyer price will not recoup back initial capital to send back to SingLand. What to do with unsaleable properties & capital stuck across the Straits of Johor? Just breed ghosts?
      With such dire straits property scenario in Johor, it is unthinkable that property gurus continue to sing the Johor property bonanza at Iskandar at the top of monster trucks!

      • Ernest Cheong predicted property bubble burst many years ago but the sector is still resilient with more condominiums being built including on reclaimed land all over Malaysian. Use your instinct, never believe in the words of the “Property Gurus”.

  6. If kiasi kiasu don’t rush (herd mentality) to buy those overpriced condos, then there is less demand to finance the buildings of more condos.
    Those who pay the premium actually finance the start up, and the developers can afford to leave vacant units unoccupied by living souls so you can witness majority of new condos with low occupancy.

  7. Quote: The Department of Statistics has access to more reliable and up-to-date data on migration, mortality and fertility.
    Reality Plus: More Bo-Bin-Chui Penangites will have to emigrate to SP, Taiping, Ipoh & further (other states) since property prices in Penang are projected (by property gurus) to hold on for the foreseeable future.

    Quote: Bear in mind over the last 20 years (a period which covers times of economic boom as well as lean years), the average net inward migration (those settling in Penang minus those leaving Penang) was about 9,300 per year. Net migration for the period from 2010 to 2015 was even lower than this figure.
    Reality Check: We have no statistics of Penangites’ mood in the near future, but rest assured that more will leave as this state gomen prepares for the rich + famous to replace the ‘vacuum’ so to fit their frenzied high-end property development & superhighways + sea tunnel for MercS300Lansis.

    Quote: Who are we building for? Is Penang adopting a build-and-they-will-come policy? But who are “They”?
    Reality Hindsight: Generally, marketers are not stupid but in Penang, developer marketing dept are acting stupid – build & cannot sell (high-end), ask stupid gomen for help, & then comes this ‘awaited’ opportunity to sell to the rich + famous from China, SingLand & HK. Now, who are the real stupid in Penang?

    No need to quote further: PTMP – the start of the mother of all problems since 308.

    • I think the hawkers in Penang could afford the high price properties since they enjoy good business despite increasing their selling price of hawker food.

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