Housing prices in Penang and the rest of Malaysia are soaring beyond the reach of many Malaysians. While many property developers and speculators are laughing their way to the bank, many ordinary workers are struggling to buy their first homes.
Blog reader Rango left this comment:
PAP in Singapore losing their votes to young voters who are unhappy with the high cost of housing in Singapore.
Young people in Malaysia also face the same problem. Semi-D houses in Penang can go for RM930K – flat land. after the OC is obtained the asking price skyrockets to RM1.3mil.
A starting salary for an engineer is about RM2K to RM2.2K. After 5 yrs maybe he will hit a salary of about RM3K. Maybe by the time he is 35 he will make manager and earn about 5k-6k. By then he has to feed a family, insurance, car, education for his kids etc.
This is not rocket science but a simple calculation will tell you he will never be able to afford a house. Meanwhile there are foreigners buying two to three houses (some of them mid range apartments) and selling them for exorbitant amounts making profits. Why are we allowing this to happen? There should be a cap and guidelines for home ownership for foreigners. they are helping to spoil the market. How can the locals compete against them when they have the power of currency exchange. Our housing minister Chor must wake up to reality instead of finding excuses.
What happened to the controls on foreign ownership of local property?
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Want to get a piece of new property? Thought of camping overnight outside the sales office? I chatted with a friend and he did just that (don’t ask me for details). When the doors open in the morning, he realized some good units are already taken up prior. Well, business partners, employees, relatives and some reserved units purportedly for price inflation purpose are the main so called VIPs. Then about 10 minutes after the sales office open, several group of Chinese (not sure if local or foreign) started to reserve their own sales agent by enticing them with the idea… Read more »
It is the so call ‘high Income’ Malaysian citizenry Najib is talking about, before you can turn the country into high income land, you need to pay for high house, food and fuel prices first, then high income can only be generated among Malaysian workers in a high income economy.
Pak Hainan you truly BOLEH. GOD bless you. You have my respect !
I was sad just now when metal/rock James Durbin was voted out of american idol BUT now you bring cheers to me. Pak Hainan a true Msian Idol !
Let Justice Flows Like Mighty River (against) those greedy money suckers.
Don’t complain no more flat land in penang island.
Flatten Pulau Jerejak. Dump its hill soil to the sea to have land connecting it to Queensbay. Then build affordable housing for the locals.Propose such undertakings for IJM or Ivory Group as they have proven to be able to build at various gradients (mountain slope degrees).
IJM can then create a economical version of The Light OR Ivory can create a economical version of Moonlight Bay for the locals.
In the 60s and 70s the developers built houses and sold to the buyers direct. The buyer then had to negotiate a loan form the banks. Today the developer sells the houses to the banks and they determine the pricing. Is this correct or am I dreaming.
Today the developer sells the houses to the banks and they determine the pricing.
This (most probably) works in a booming market with the banks guaranteed ready customers, comfortable profit margins and having legal ownership of properties (while lending). And how many developers nowadays are cash rich corporations unlike 40 years ago. So the price mechanism is not 100% hinged on market demand and supply. The banks’ kiasu factor is already part of the market price mix.
Are we still asking the banks for social responsibility of affordable housing?
The developer (shows) “non-existent” house to the bank which offers loan to willing suckers (Buyers). No wonder there were many defunct projects which are not revived until today. The buyers are still paying for the so called “house”.
It is high time the government set up a National House ownership database. This way they can trace (the) GREEDY…! All past and present Housing and Local Government Ministers are sleeping on the job….
The GREEDY ones, majority are protected by Official Secret Act. We need to create Robocop to expose these GREEDY ones.
expose alone no use. punish them also.
but sorry now i am still too young to vote to create tsunami justice to wash away those safe fixed deposits of the greedy ones.
It is in the interest of the banks and financial institutions that property prices remain buoyant or if there is a dip in prices that those aberrations should not be more than 30%.
Unless we want to see a full scale property crisis that sent Japan to a 10 year recession or a sub-prime crisis that wiped out many core banking institutions in the US.
So don’t expect drastic drop in price of houses anytime soon.
The government will not allow that to happen.
in KL and surrounds (PJ, Shah Alam etc.), you can see the property prices are even higher than Penang.
Yes, Ken i do notice that, especially in One Utama and also Damansara Mutiara and Perdana, prices soaring high for both landed and apartments!!!
Everyone is thinking that either you buy now or never !!!
IMHO, Anil should look into other perspective beside “house ownership”. It is absurd to enact all sort of “speculation hindering” policies while the government itself are profiteering mindset instead of a balancing social-economy. China properties market and policy maker has show all sort of imaginable thesis and mistakes, that PR state government must learn to avoid. China is a dictatorship country, the government need not worry about getting vote out. PR gov must think twice if they idiot enough to follow the quick money profiteering policies. A rich properties owner only give you 1 vote, on the other hand, in… Read more »
Willing buyers, willing sellers. What is the problem ???
If you are poor enough, then don’t blame others. There are plenty of “jejantas” for you to sleep.
Some people say that rising property price is the indicator of that region prosperity. So, my 1Malaysia PM Najib should be praised instead.
Penangites are in serious trouble like Singaporeans. People from other states are relocating to Penang ever since the good names of DAP and Lim Guan Eng spread far and wide.
I just chatted with a Sabah guy who relocated to Penang from Singapore recently. He is all praises of Penang.
Sooner, all our roads will be clogged up, property prices will (already?) sky-rocketed.
Please bring back the Gerakan rule, at least we have more locals moving out (due to lack-lustre economy) thus release the pressure on housing and traffic woes!!
Sunflower, your last para really sucks !!!
Some people are forever engaging the reverse gear, instead of moving forward we move backward, no wonder after 53 years, we are the laughing stock of the world !!!…
one way to help is by introducing Super Tax for luxury condos/houses. State can use this money to finance housing for public.
What can we all do actually to improve the lot of the poor ???
Kick out BN and try Pakatan but the poor have very poor mindset, they can be easily swayed by BN, apa boleh buat???
What can we do to solve this problem: 1. Stop hiring foreigners into our labour market. 2. Reintroduce RPGT and 10 years limit 3. Allow foreigners to buy houses priced RM750,000 and above only., 4. Kick out BN 5. Introduce public housing scheme with 5 year’s limit for each family. 6. Developers should sell only fully completed house. 7. Buyers must pay 40% deposit of the purchase price. 8. Banks should only provide 60% loan. 9. Reduce car loans to 5 years and 30% deposit. 10. Open up bus transportation to many competitors instead of monopoly. 11. (Get rid of)… Read more »
Scorpion, to add more ‘stings’ to the State Gomen administration of lands and beneficial development, it should have 101% say on what to do and what not to do with every millimeter of Penang State land, sea and air.
Unless it is a Fed land with Fed Fat projects, mark it with red flags to avoid public naivete confusion of ‘red flag’ developments with State Gomen jurisdiction.
It is supply and demand. Prices in Penang must be the highest in the country, but I noticed there are no shortage of buyers. New launches are quickly snapped up.
We need not bar foreign ownership, just limit them to properties above a certain price.
Yes, but are these real buyers or agents/connected parties that are buying up a string of condos/lots in the hope of selling them off to speculators eventually at a tidy profit – and thereby perpetuating the illusion of fantastic demand?
With the right connections and trust, banks are willing players with you in this hugely profitable game of up, up and away housing prices. With ready cash available, more are ever ready to be full time speculators in this ‘hot’ trendy-and-tried wealth-growing business opportunity of gurus.
Some developers knowing the ‘fever’ could even garner their own staff to invest (in good, hot units) for fast profiteering speculation. This is the 1st Tier of Speculation Fever before it hits the public domains / streets of mass hysteria for ‘guaranteed’ profiteering in the name of ‘genuine’ home buying.
Speculators must sell to realize a profit. Despite them profiteering they can still find buyers. Why?
The only way to curb speculation is to stop buying and for banks to lower the loan percentage. But this wouldn’t work, would it?
If RPGT as practiced previously were to be introduced where sellers do not need to pay property gain tax only after 5 years, then excessive speculation can be reduced.
And stop banks from loaning money to foreigners in buying property for speculation purpose by limiting loan percentage to 50% of property price for first house, 80% for second house and 0% for third house.
If they want to buy property, they need to bring in the money and not to be financed by Malaysian savers who get 3% for FD while they make outrageous profit.
Yes RPGT – I think the problem of speculation and the property bubble started building up around the time when real property gains tax was removed. Time to consider bringing it back.
And yes, the criteria for housing loans needs to be really tightened up to reduce speculation.
Then the ‘Business of Greeds’ of housing speculators in the name of ethical social funtional business will crumble. Then the bankers will start to fidget why excessive million-ringgit loans are given to RM2 speculator businesses which barely have any office to start with but a mobile phone.
Malaysia properties and finance industry , are the WORST employment and economy value creator. When the property bubble bloated beyond the ability of people to pay the rent (including bank loan interest) , the bubble will burst. Bare in mind that, if comparing using relative value, USA property still cheaper than Malaysia, despite its huge economy scale. When Najib pushing out his “wonder” housing idea(not even policies) for youth income around RM2000, and encourage private developer to sell it cheap, it make me laugh. It is no different than Sarawak Taib tricks to transfer the nation land to private pocket,… Read more »
This is SERIOUS PROBLEM in Penang.
Something needs to be done to stop this. There should be a mechanism to address this issue. Currently even middle income earners can’t afford a to own landed property in Penang.To begin with I reckon we should stop foreign ownwership!
Something SERIOUSLY needs to be done for the ridicoulously priced houses in Penang!!
Stop foreign ownership is and should be the 1st ‘drastic’ measure, but I will reckon the greedy developers and not-wealthy-enough housing agents crying out baby-turning-blue-loud! Only give preference to MY2Home foreign buyers who are genuinely residing in Penang, and control their numbers since we are not hard up for foreigners in large numbers making this island an expensive old folks home. These MY2Home foreigners are not big industrial focused investors for statewide economic development. What we actually need are developing scarce lands for affordable housing and more schools and universities. And not to forget relevant research institutions and industrial/talent centers… Read more »
We have many Greenies just look after their interests to live in a Sofa life. They oppose increase in housing density or clearing of more lands for mass housing and prefer to watch people living in slum areas. They wanted to inflate their prices of house quickly to make more bucks.
The mass housing that you speak of … is it affordable housing or priced beyond the reach of most people?
Claiming greenies ” oppose increase in housing density or clearing of more lands for mass housing and prefer to watch people living in slum areas” is not a fact, rather , it is your own perspective. The claim contradict the real science fact : high density housing with good urban planning are most energy efficient. However, Malaysia high housing density is a jokes, there is NO planning, but mostly rent seeking project with the local municipal town planner. In Malaysia, you will see car flooded on the street at ALL high density housing area. Except premium condos in KL city… Read more »
Even if Penang has more land, building houses in such suburbs creating spaling and tghis means more roads but no recreation/cultural amentities and less mass rail/bus transport. Without a critical mass, any public transport has to be heavily subsidised by the government. This means opportunities to help the poor Indians, Malays and Chinese will be very much reduced as the funds are diverted. If there is more land and more houses can be put in a plot of land, the prices will be reduced. If the developer wanted his properties to sold more millions, then he has to wait longer… Read more »
Anil, Being the ICAEW chartered accountant that you are, perhaps you will be kind enough to work out the annual compounded % increase of the average terrace house in Penang, say over the last 20 years. Unaffordable to many young working couples, the prices of houses undoubtably are, it is debatable the contention that prices are high when compared regionally and more importantly if we were to look at the price increases since the nineties The root cause of this ” unaffordability ” may well be the relatively low salary increases of our wage earners in the last 20 years.… Read more »
Yes, precisely, part of the problem of “unaffordability” stems from the inability of wages to keep pace with the cost of living.
Apart from the factors you mentioned – brain drain, weak ringgit policy – there appears to have been a policy of suppressing wages by importing cheap foreign labour and introducing flexi-wages and labour outsourcing etc.
In addition the absence of a minimum wage allows employers to get away with paying wages that are at time below the official poverty line income threshold, which some believe understates the real level of poverty in the country.
You got it spot on. As Dr.M said in his blog posting, our government were brilliant at solving the unemployment of other countries.
There really is no incentive for our exporters to move up the value-added chain, the result of which is slow pace of wage increases.
The brainy ones have already packed their bags and gone.
The housing industry The rich companies get it richer The government always lend them a hand And the ordinary folks will struggle through their lives The costs of major items You don’t find them going down Once the government allows it to go up You don’t find it going down Take the case of petrol The price of crude oil has gone down The cost increase hasn’t reversed it The government and petrol companies keep silence Likewise in housing industry The will must be there to clamp it down The young workers in the job market They will not find… Read more »
This is Najib’s ‘High Income Economy’ becoming reality.
Before you can have a high income, you must first start paying a high price for everything.
LOLLLLLL.
I still do not know how exactly is Najib going to make us a ‘high income’ nation. All I know is Barang Naik every week – petrol, sugar, chicken, Milo, Coffee, Milk, housing, transportation, McDonalds, …
How is it possible for our wages to go up to neutralise the impact of inflation? I only hear Najib talking about implementing GST.