When housing becomes a commodity, a vehicle for wealth growth

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What is causing so much dissatisfaction with the housing market? Well, the provision of housing these days in large part, no longer fulfils a social function to provide people with homes within their budget. Instead, it has become a tool of wealth creation – for ‘investors’, financial institutions, speculators, and of course the developers.

In the meantime, people are evicted or displaced from their homes for meagre compensation and they are unable to afford housing nearer to city centres.

Investors and speculators buy the finished luxury houses and condominiums in the hope of long-term wealth accumulation. Speculators count on rising land prices. The banks earn loads of interest. The developers earn their profits and run.

This wealth accumulation from property has contributed to high income and wealth inequality. It didn’t matter if these luxury homes were left vacant or unoccupied by their wealthy buyers; in the past, rising prices more than made up for any lack of rental income – even as many ordinary Malaysians could only dream of buying their own homes.

Full article in Aliran website

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Damien
Damien

I think present foreign expatriates living on the island prefer less foreigners purchasing house commodity on island, as we can read the letter from one in The Sun paper link below :

http://m.thesundaily.my/node/430815

Not sure Anil’s regular readers especially the PHT or PR have any comments?

Ronald Ong
Ronald Ong

Soon there could be more PRC expatriates as Malaysia is doing more trade with China. Local Malaysian girls could target such rich PRC professionals and be guaranteed good expensive homes in Penang should they successfully get hitched into marriage?

tunglang

The Wealthy Terracotta Men?

tunglang
SAM: We depend on mangroves for food and protect our coastline https://sg.news.yahoo.com/sam-depend-them-food-protect-060045076.html GEORGE TOWN: All states, including Penang, should play a role in ensuring that the remaining mangrove forests are protected, a leading environmental group said. Sahabat Alam Malaysia (SAM) said no development should be allowed in mangrove areas as they were important for protection of the coastal areas and as breeding ground for marine life. “In Penang’s case, it is our hope that the state government gazette all the mangrove forests in the state as permanent reserved forest for protection purposes and not as productive forest. “We will be… Read more »
tunglang
Diminishing mangrove: Save them before it’s too late https://sg.news.yahoo.com/save-them-too-060447905.html GEORGE TOWN: Penang risks losing its mangrove forests within 10 years if unmitigated development continues to encroach on the areas. Penang Inshore Fisherman Welfare Association (PIFWA) has estimated that there is only a quarter of mangrove forests left compared to the area in the 1960s. PIFWA president Ilias Shafie said the remaining mangrove forests were fast making way for development. Ilias said the only areas in Penang with dense mangroves were in Balik Pulau, Seberang Prai Selatan and from Juru to the Perak border. “Right now, we do not see concerted… Read more »
Bigjoe
Bigjoe

IF housing is, as you put it, “a vehicle of wealth growth”, my advice is SELL!! Housing, real estate, at its worst, to the most unscrupulous developer, is means of extraction of public social well-being being. It is mostly means of saving and taking a share of growth. IT IS NOT GROWTH in itself. That is saying the means is the end itself and sure signal of a bubble.

tunglang
Extension of time vs abandoned projects – fact or fallacy? http://www.malaysiakini.com/news/374547 COMMENT The immediate response by former urban well being, housing and local government minister Abdul Rahman Dahlan giving his purported rationale for the granting of extension of time (EOT) in his press statement dated March 3, 2017, is irrational. That the reason for the granting of an EOT is to ensure that housing developers complete their project does not hold water, because house buyers have no right to pursue liquidated damages (LAD) until and unless the houses have been completed and handed over. The question of LAD does not… Read more »
zoro
zoro

Only observe at Putrajaya but scream at komtar. Boh hood and pasar mlm trader.

glissantia
glissantia
Capitalist propaganda tells us that (a) responsible developers and a caring gomen are giving us safe, valuable houses with wonderful surroundings (b) it is not possible to provide cheaper houses. Capitalism views socialism as a deadly threat. In the “most democratic nation,” fascists succeeded in eliminating socialists and unionists from late 19th. century to the late 1970s, through condemnation and state brutality. The means to suck our blood (called debt slavery) and keep us running the rat race include (a) secrecy in projects, costs, approvals and concessions (b) disallowing small-scale and individual innovation, especially in housing design (c) hindrances due… Read more »
tunglang

Good observation, but some greedy minds won’t like it.
Karma is watching their deeds.

Mark
Mark
After a long silence on the expose of the Johor land scam, Menteri Besar Khaled Nordin finally attempted to provide an explanation. However it sounded more like an excuse rather than serious reasons. According to Khaled, since 2013, developers are allowed to apply for the conversion of Bumiputera housing lots by making a 7.5% contribution – or half of the 15% Bumiputera lot discount – to the state, with projects prior to 2013, eligible for lower payments. The contributions or collections acquired through payments to convert the lots and release the Bumiputera status are then channeled to a Bumiputera Housing… Read more »
Sadhu
Sadhu

Ironically housing developers are recognised with awards for building homes that are beyond the means of average Malaysians (assuming they do not take long term high loans). Even most of the developer taukeh got datukship for the ‘contribution’ in housing sector.

tunglang

Alternatives to brick + mortar housing: Container homes – cheaper, fast to build, requires less space, stackable. Rent a land space or buy one to build over it.
Also, no tied down to an asset that may eat your substantial savings (or an entire life of work for money).

24 Breathtaking Homes Made from.. $1800 Shipping Containers
http://organics.org/24-breathtaking-homes-made-from-1800-dollar-shipping-containers/

THINK INSIDE THE BOX WITH THESE TRICKED-OUT SHIPPING CONTAINER HOMES
http://www.digitaltrends.com/home/fifteen-amazing-shipping-container-homes/

Shipping Container Homes
https://www.niftyhomestead.com/blog/shipping-container-homes/

Ronald Ong
Ronald Ong
Container home is not practical under our hot weather unless you air-conditioned it and pay high electricity bill. Housing price is going up and people should question why their income could not go up in tandem. Do not believe in the stupid Ah Jib’s suggestion of taking up 2nd job or drive Uber to supplement income. The core issue is our nation has not been competitive and productive given the laid back culture living on subsidies. Call Singapore Kiasu but it’s people strive hard to be world’s best (not comparing itself with the likes of Zimbabwe and Saudi Arabia) to… Read more »
Ang
Ang

The kopitiam taukehs want their children to pursue professional career and employ cheap Indon kakaks to operate the kopitiams, so long term the kids not taking over.

Engineer
Engineer
You guys like to compare Malaysia with Singapore, but do you know that Singapore could be slipping into a technical recession this year. People gets laid off especially in the manufacturing since last year and their oil industry (i.e. Sembcorp) is also limping along like our Petronas. So Singapore is not that great, if it is , you would have tore up your passport and move there already. And also what’s so great about Singapore when 42% of Singaporeans themselves wanted to migrate out of the country if given a chance. Only silly Malaysians would want to go there to… Read more »
Lord Jim
Lord Jim

Sell now?
No more hot money from China, and soon developers will have to launch fire sale.

Kabali
Kabali

Malaysians deprived of opportunities due of skewed policies go to Spore to earn livings, work 10 years there equals to 30 years in Msia, and can come back if wanted to buy home with no complaints.
Singaporeans likewise after making fortune then can choose to migrate elsewhere.

Engineers in Msia can choose status quo to remain in Malaysia if can find lobang connection to exploit with barang naik also a choice.

zoro
zoro
Singland are well travel and passport to more countries than here. Their income is high and hence they are mire exposed. Singland is an international city. During primary and secondary schools, they are educational tours overseas. Further, during nat. Service, they are send to uncle Sam. Kangaroo land, formosa for training. What do you expect fromnthem. here we are still kg champion living in thinking of turning back Penang to days of Elvis the pervis and spin around. Stupid argument. When oil is down, all oil related construction is down. Most affected are Malaysians and pg Lang and many migrant… Read more »
Ernest
Ernest

Ronald is right. Should seriously ask ourselves why real wages never go up under the Barang Naik environment. The nation is too focus on short term gain in having cheap foreign labour without pushing for productivity gain. Can you give your mandate to BN for another 30 years to do damage with its TN50 vision? Fikirlah sendiri as Singapore is focusing on its next 10 years with its New Economy vision.

tunglang

I was concerned about heat in container homes as we are in the tropics but we should think out of the brick + mortar box (instead of lamenting low wages) if we are to survive in this low-wage economic cycle (which is not going to evaporate any sooner). Container homes are possible in Malaysia, so read on:

Building With Shipping Containers In The Tropics (Part 2)
http://www.greenasiaforce.com/building-with-shipping-containers-in-the-tropics-part-2/

Heat problem can be tackled easily by insulation

zoro
zoro

Stupid reasoning. Then your reply also infer why not add insulation to all brick and concrete buildings and save air cond and hence less demand for electricity and hence coal burning?

zoro
zoro

Tua pek Kong always bark at wrong things. Many shops are employing cheap labour. So when the owner is getting older, the kopi tiam will be closed as the younger will not and unable to take over. Another heritage and tradition gone. Tua pek Kong should tell gilakan central Gomen to reduce work permit

Mario Nintendo Engineer
Mario Nintendo Engineer

Anil should come to Pisa Corner to witness ori-maestro Bangladesh chefs trained to prepare “kai fan”, rice with egg and meat option for RM6.90.

Savvy
Savvy

If got no money better not purchase property for speculation using bank loan or ah long money. Can get burnt because now too many units built and the Malaysia economy is also going through hard times this year. You can end up losing more as ringgit is dropping each day.

Yong
Yong

Following the depreciation of the ringgit and recent petrol price hike, the CPI rose 3.2% in January. While Malaysians in general feel the pinch, our ministers only see the rosy picture of a 4.5% GDP growth in the last quarter of 2016. Government statistics show 8,277,391 individuals had applied for BR1M, but, this is not something we should take pride in. It only shows that many in this country are still making very little every month. With the ringgit continuously on the slide, we are getting further and further from the ultimate goal of a high-income nation.

Mario Nintendo Engineer
Mario Nintendo Engineer

BR1M is the evidence to the world that 8 millions out of 30 millions population need financial aid to cope with daily barang naik pressure. What a disgrace!

tunglang
Housing can’t be reduced to a financial asset for the wealthy, says UN expert http://aliran.com/civil-society-voices/2017-civil-society-voices/housing-cant-reduced-financial-asset-wealthy-says-un-expert/ A United Nations expert has issued a strong rebuke to the dominance of financial markets in the global housing sector. In her latest report to the UN Human Rights Council, the special rapporteur on the right to housing, Leilani Farha, addresses the repercussions of a hyper-financializsed housing market that pits speculation against human rights and pushes the cost of housing out of reach of most households. Farha told the Human Rights Council in Geneva that: “Housing has lost its social function and is seen instead… Read more »
Henry Tan
Henry Tan
While we are on housing issue, Minister in the Prime Minister’s Department Abdul Rahman Dahlan has denied abuse of power in granting an extension of time (EOT) for the construction of condominium projects by BHL Group of Companies. The Housing Minister can interfere in a private project and he is not influencing by his friends who have interests in the projects. What about the recent exposure about gun licences given to a few individuals? No conflict of interests again? A PM who does not even know that millions of dollars are flowing into his personal bank account. So, this is… Read more »
Yong
Yong

The Court ruling has proved that Rahman Dahlan has no merit in his decision in granting the OTS and therefore has [allegedly] abused his power as a minister. Look like he is more a developer man as apposed to buyers protector. Talking also like a developer spokeman. MACC ought to investigate this case just like the LGE’s bungalow case.

Sonicfish
Sonicfish

Haha, when talk about this Abdul Rahman Dahlan ?
There are many people who dealt with him before would definitely tell you: “Ah, that guy always like to throw his weight around just before you open your mouths !”

Ronald Ong
Ronald Ong

Rahman Dahlan has argued that the granting of EOT is also based on merit. If every developers can get away easily with EOT then the S&P will lost it functions and meanings. The developers will always think that by just kowtim the minister all things will settled. So, the impact will be the developers will not be bother of completing their projects in time and will resulted many projects to be delayed and became uncertained and further loss to buyers. Why BN leaders are fond of taking care of developers in sacrifice of buyers right and interest?

Puspha
Puspha

MACC should prove the abuse of power extending hardline for errant developers!

Puspha
Puspha

Typo : MACC should probe the ministerial abuse of power extending the house delivery deadline for errant developers.

tunglang
SPECULATE (A FORM OF GAMBLING) ON PROPERTIES WHEN OTHERS (GENUINE BUYERS) SUFFER? SHOULD HOUSING (MORE A SOCIAL NEED, NOT A BIN-CHUI WANT) FOR MAJORITY BE COMMODITISED LIKE GAMBLING CHIPS? No wonder greedy developers refuse to build more of affordable housing (200K – 250K priced realistically) for the majority of genuine house buyers (who buy to stay, not buy to leave them empty). Knowing the high-price brackets will generate higher incomes / profits, these developers (property gurus not excluded) will go to all ends to justify, even on the basis of a hike in Penang water rates (don’t tell us the… Read more »
zoro
zoro

More private uni? Not enough? Want businessmen to mass photo more uni grads like houeses? stupidest statement as central gomen is cutting down scholarship and senting students overseas. You want to stockpile water, then tua pek Kong expect more cutting of trees and hills for land clearing. What a silly comment

Damien
Damien

Consumers have choices. If Penang island homes too expensive, go for alternatives on mainland.
No need die die must live on island.

Joo Beng
Joo Beng

Mainland homes are cheaper and the standard of living is lower and less traffic congestion.
Stay in Butterworth as Penang Sentral will provide the easy connectivity to the Penang island via ferry.
Also no need to get frustrated seeing rich people enjoying themselves in the consumer world.

tunglang

Pls be sensible. This is not about jealousy but a serious socio-economic issue which can also affect you some day.
Or you prefer to see others suffer?

Puspha
Puspha

How come federal gomen not letting go ferry service to the state gomen???

zoro
zoro

pg forum and tus pek kong are good at bullying pg gomen with with complains. but they dare not complain to federal on ferry service. pg forum is sitting in trsnsport council just for name and do nothing. even cant convince ferry service to produce time table. just good in making noise.

tunglang

The Feds will most likely do to Pg Ferry, what they did to Pg Hill Railway – to replace the iconic ferries with Speedy Gonzales aluminium fast speed ferries.

Heritage value is worthless to the eyes of the Feds when it is not a profitable kang tau to their cronies. How to jack up the price of refurbishing old ferries?

tunglang

Consumers also have smart choices not to buy (over-priced properties to profit greedy developers) but to rent instead.
It also boils down to where one is working for a living. Fuel price increase & bridge tolls are factors against moving to mainland.

zoro
zoro

why tua pek kong roost about developers when you also acknowedge consumers have the choice. just copy cat and troll about what i say abour consumer’s choice now

Mark
Mark

In this report on The Star on 15 December 2010, Henry Butcher said Penang Property is a Goldmine for investors.

http://www.thestar.com.my/news/community/2010/12/15/penang-property-a-goldmine/

PROPERTY in Penang will continue to remain a favourite choice among investors as it is expected to show returns that are above the national average.

Henry Butcher Malaysia (Penang) Sdn Bhd director Dr Jason Teoh said property investment was generally perceived to have a longer term horizon as it was not so volatile compared to stocks.

He said investing in property had proven to be a good hedge against inflation because the returns ge-nerated were higher than the Con-sumer Price Index.

veloo
veloo

The local media like The Star are paid by property developers and agencies to fuel speculative demand with such articles. Property is now an investment commodity like it or not, now that people are beginning to lose faith in Malaysian economy and the depreciating Ringgit, hoping that their investment in property can bring better return.

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