Can new housing rules in Penang cool down property bubble?

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Penang has come up with several new housing rules aimed at cooling down the property bubble.

1. Low-cost and low-medium-cost homes (up tp RM75000) cannot be sold within 10 years unless permission is obtained. Even so, it can only be sold to qualified buyers registered with the Housing Department.

2. Similarly, affordable houses (up to RM400000 on the island and RM250000 on the mainland) cannot be sold within five years, unless permission is obtained.

3. Foreigners can only buy property above RM1m (or landed property over RM2m). A 3 per cent levy on the transacted price will be imposed from 1 February 2014.

4. A 2 per cent levy will be imposed on sales of property (apart from affordable housing) if sold within three years of purchase for S&Ps signed from 1 February 2014.

What do you think? Will this be enough to deflate the property bubble?

My hunch is that a lot of the speculation is taking place in the RM0.5m to RM1.0m category and many of these homes are targeted by locals rather than foreigners.

The full statement from the state government:

New Housing Rules From 1 February 2014 To Protect Penang From Being Adversely Affected By A Property Bubble As Well As Ensuring That Public Housing And Affordable Housing Are Bought By Genuine Purchasers Who Are Qualified First Time Buyers From Lower and Middle-Income Groups.

The new housing rules announced in the 2014 Penang state Budget at the Penang State Assembly and proposed to be effective from 1 February 2014 are designed to protect Penang from being adversely affected by a property bubble as well as ensuring that public housing and affordable housing are bought by genuine purchasers who are qualified first time buyers from lower and middle-income groups.

As a responsible government seeking sustainable economic growth and development, the Penang state government is careful to avoid the pitfalls of any property bubble that will bring hardship to the rakyat and damage the economy. Japan is a good lesson of the dangers of a property bubble.

The state government has set up a RM500 million Public And Affordable Housing Fund to build 20,000 units of public housing and affordable housing in all 5 districts of Penang. This is the largest amount set aside by any state government in Malaysian history to build affordable and public housing.

As a people-centric government, the Penang state government wants to achieve housing democracy that allows every working family to own their own home. Ensuring that public housing (low cost and low medium cost houses) is owned by the poor and genuine first time buyers is our priority.

The Penang state EXCO had during its last meeting refined the new housing rules for clarity and certainty as follows:

1, Public Housing – Low Cost And Low Medium Cost Housing

All low cost homes (up to RM42,000) and low-medium cost homes (up to RM72,500) purchased can not be sold for 10 years. Those who wish to sell during the first 10 years must appeal to the state government and can only be sold to “listed buyers”. Listed buyers are those who have registered with the Housing Department of the state government and are certified as low income groups that are qualified to purchase low-cost or low-medium cost housing. This 10 year rule will cover all past and future purchases. The balloting of houses will be subject to oversight by an auditing firm.

2. Affordable Housing

Affordable housing is classified as houses which were initially purchased below RM400,000 on the island and RM 250,000 on the mainland. Affordable housing purchased can not be sold for 5 years. Those who wish to sell during the first 5 years must appeal to the state government and can only be sold to “listed buyers”. Listed buyers are those who have registered with the Housing Department of the state government and are certified as middle-income groups that are qualified to purchase affordable housing. This 5 year rule will cover all past and future purchases. The balloting of houses will be subject to oversight by an auditing firm.

3. Purchases By Non-Citizens

Non-residents can only purchase properties in Penang in excess of RM1 million and for landed property on the island must exceed RM2 million. All purchases of properties by non-residents will be subject to a 3% levy on the transacted price from 1 February 2014. Exemptions are provided for purchases for industry purposes or for a purpose that promotes employment, education, human talent or promoting Penang as an international and intelligent city.

4. 2% Levy On Property Purchased After 1.2.2014 Sold Within 3 Years

A 2% levy will be imposed on the seller for all property sold within 3 years from the date of the Sales & Purchase Agreement(SPA) signed from 1 February 2014. In other words, this is not retrospective. Properties bought with the SPA signed before 1 February 2014 will not be subject to this levy. Only properties bought with the SPA from 1 February 2014 will be subject to the 2% levy if sold within 3 years. This 2% levy is not applicable to affordable housing.

Preliminary discussions were held between some property players and housebuyers but the state government is prepared for further discussions with all stakeholders

LIM GUAN ENG

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rajmandom808KeltyYe HeiLife Is Short, Make Penang Liveable For All Recent comment authors
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raj
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raj

Guys I’m a 23 years old . I started working in the age of 22 with a pay of 2300 ..nw earning 2600 a month working as a paramedic … I just recently bought a house.. Im paying for the house rm 1350 . It’s a double stores corner Terrace house at simpang ampat near 2nd Penang bridge.. I also currently staying at my parents house… So the house I bought is on rent for rm500..so I’m just paying 850 for that house.. I took insurance for rm185 per month.. Giving my parents 200 a month… Investing in bond shares… Read more »

kee
Guest

Had a walk in gurney paragon just now and it was so crowded, not to my expectation.

The mall not only filled with the young but older ones as well. So, i was thinking of tunglang…

Therefore, i sort of come to the conclusion that still a vast majority of the people they love modernisation (a Malay friend called it civilisation) rather than nature…

Indi yana, i turn and twist??? I tak faham la, turn mana twist mana ???

Wishing all have a nice weekend !

tunglang
Guest

Just a section of Penang island i.e. the Paragon tells the whole preference of average Penangites? Drink more Kopi-O kau kau & think clearly. Didn’t you see more tourist buses (that brought the crowd) parking in front? I too had been there but I found that it’s all slicky commercialism – spend, spend, spend or window shopping. No emotional, no spiritual & no passion from within. Just superficiality of merging an old bungalow, refurbished it to look more expensive. But the top floors of the bungalow look empty & dark. Where’s the link to our heritage? Don’t be a fool… Read more »

kee
Guest

Ai yoh, brother why talk so rough? I am for nature by all means but i can tell you truly the majority of the people prefer modernisation esp the young.

tunglang
Guest

kee: the majority of the people prefer modernisation esp the young. I too was like that in the 80s as a young working, single adult with surplus disposable income & competitive ego but still searching for an elusive identity. Social peer pressures, western lifestyles+cultures & aspiration in a slow & easy Penang island (Butterworth then was considered cowboy town) beckoned one for more commercialized development. Heritage George Town was not a gem in many Penangites’ eyes except for some like Khoo Salma. Komtar was the only icon of 1st class modernisation then (but now it eventually fell into disgrace as… Read more »

Kelty
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Kelty

Is Gurney Paragon a symbol of the Affluent society in Penang?

If the young people could patronise the stores, likely that they are spending the money of their thrifty parents? Or are they becoming brand conscious? I heard H&M is now more trendy than Padini.

Speaking of super-rich and greedy, please watch this excellent BBC documentary:

Ken
Guest
Ken

Let the state intervene in checking the escalation of house prices in a move to house the masses of the various income groups with affordable shelter. Left to the market forces of today, a LC/MC house is beyond the reach of many to own one. Even if could acquire a unit, it could still be a burden to some- a necessary burden to shoulder, in the face of small wage increases falling behind behind the rising cost of living. Compared to living in a one-room flat in 1970 at a purchase price of RM5.000.00 was considered cheap- need not fork… Read more »

Life Is Short, Make Penang Liveable For All
Guest
Life Is Short, Make Penang Liveable For All

Ken, you kept a level head in your comments.
Tunglang has expressed what diificulties faced by many who under circumstances are not able to move up (fast enough) to afford living in Penang island and even the mainland. We need more people & politicians & businessmen with hearts of humanity, not selfish ego on the road to selfish gains or opportunists. State intervention is inevitable if we aspire to make Penang a liveable place for many.

Indi Yana
Guest
Indi Yana

Very funny. Twist and turn in your comment and finally blame BN. That is the standard operating procedure for pakatan kaki

tunglang
Guest

It’s very paradoxical or self-contradictory of Penangites. When the Boh Hoot Ostrich ran the kow tow satellite state of Mad-Hatterism, there weren’t much discernible public complaints but quietness of suffering (tiam-tiam tahan) during the decades of slow progress. When the 308 Kucing ran the progressive cosmopolitan state, there are now loud arrogant, blaming & condemning voices of socio-political alignment countering the dissents against unsustainable progress even the eco-frogs @ Pantai Keracut could hear. Blaming the past, the previous state government, the stumbling blocks of heritage + culture, history & thrifty baby boomers generation, even not sparing those who are not… Read more »

sunnyooi
Guest
sunnyooi

Irony. Twist and turn in your comment and finally blame pakatan kaki.

Ye Hei
Guest
Ye Hei

Kaki-bodek has no place in a socialist-caring society.
Better you serve coffee in StarBucks while shoe shining for extra gold coins tossed from politicians with strings attached to their boneless backs.

sunnyooi
Guest
sunnyooi

Equating support to monetary gains is a BN mindset. Such kind have no place on earth.

tunglang
Guest

Parrot wannabe: Irony. Twist and turn in your comment and finally blame pakatan kaki.

It’s nice to hear a parrot’s gibberish echoing Indi Yana for lack of substance.
Why not apply a jungle job in Penang’s Escape Them Park as Mr Tattoo’s sidekick shouting:
“The plane, the plane!”

sunnyooi
Guest
sunnyooi

And so says Mr Rainforest whom forever touches Concrete.

Kelty
Guest
Kelty

Indi Yana

What about having nice slogans (having paid millions to consultants) but execute the opposite?
This is the ‘belakang pusing’ behaviour or Umno?

kee
Guest

Island Joe, thanks for sharing. Yes, intelligent comment ! Just like Yang i feel for the parking attedants but such is life… The other day i saw a group of youngsters mending their newly opened economy rice stall in Pulau Tikus, i was hurting seeing survival has become so tough… So, i asked for a packet though i already had my lunch. . Sunnyooi, you righty pointed out that LGE was the cause of price hike of prooerties in Penang. My sister’s friend from KL just bought an apartment for retirement in Penang. Yang, i can safely tell you that… Read more »

sunnyooi
Guest
sunnyooi

Yang, your conclusions do not make sense. If the government sold land cheaply then you will say corruption. Also, dont they have to reclaim this “free” land? Nobody is guaranteed profit in building any tunnel or developing property. I stand corrected, our federal government does such deals. Regarding your house, it is clearly spelled out “5 years” in the article. None of the rules introduced above leads me to conclude that developers will sell more house. In fact I think speculative purchases will lessen leading to hard time for developers. The only point I agree with you is that LGE… Read more »

Nelson
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Nelson

sunnyooi Your last sentence makes a lot of sense from my personal observation. My friend from Perlis left home to work In Singapore in the late 80’s. Having earned enough all these years and cashed out his HDB flat for a tidy profit (not as much as RM1.2 million like Yang), he decided to move back to live in Penang by buying a RM750K apartment with his SingDollar. He told me that many Malaysians like him who worked in Singapore have high respect for the LGE’s governance in Penang. Perhaps they see certain similarity in the DAP and PAP. Also… Read more »

Island Joe
Guest
Island Joe

All this going on about politics. How about moving on to economics. Take the personalities and parties out of the equation and focus on the issues. Times change, prices go up if demand outpaces supply. Penang being an island means there will ALWAYS be upward pressure on house prices. Finite land. The solution is a change in mindset of having to own property as the ONLY option for your dwelling, and to look at the increase the quality of living on the mainland to make it better quality living, which includes better connectivity. Trying to build low cost housing on… Read more »

Penangkia
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Penangkia

It’s good to see there are still people who can give intelligent, neutral and non name calling comment!

mandom808
Guest

Yes Island Joe,

Thank you for providing sensible commentary for the silent majority. Barking and spewing hate about one individual is getting very tiring. It clutters real intelligent discourse on this website. If I didn’t know better, I swear Yang and Gerakan K are related. (Oops… I shouldn’t swear on Anil’s website…. minta maaf!)

kee
Guest

I think our bashing and spewing venom on Lim GE or Pakatan led state here are not too sensible and also not too fair, so far as i am concerned. LGE and team did try hard and are still working very hard to improve Penang as a whole. First, the Penang people complained about traffic congestion and now several roads have been changed to one way to enhance a smoother traffic and it does. But we hear so much of “cow peh cow boh” just because the bus no longer stops at their door step so they cry… The sharp… Read more »

Yang
Guest
Yang

Bayan Bay land was sold to Ivory, Its a local company Spice was redeveloped by Setia and given to built 2000 or so house. Its a local company. Although not perfect at least it goes to the local people who will benefit. BUT 110 acres Tanjong Tokong land was given to a CHINA company in exchange to build the tunnel. ……. Is it OK ?????……… Who is actually selling or giving/exchanging our land to FOREIGNER. ITS LGE DAP PR. Wow wow AND this CHINESE company is getting DOUBLE PROFIT First they get to profit from the tunnel building and then… Read more »

Yang
Guest
Yang

Read on and you will know that its LGE and govt are the one causing the property hike in Penang. Even with the guideline property price will not go down but up instead due to rise in materials, electricity and other cause and COUPLED WITH A SHORTAGE DUE TO LGE POLICY… http://www.propertyguru.com.my/en/property-news/2013/12/11450/Penang%20property%20market%20to%20moderate%20in%202014?utm_source=pgmy-newsalert&utm_medium=edm&utm_campaign=dailynews-11Dec2013&utm_content=links ““`Speaking at Rehda’s annual press conference on 2014’s property market outlook, Chan also noted that the government had also played a role in increasing land prices. “For example, when the state government compensates Beijing Urban Construction Group (BUCG) for the cost of building the proposed RM6.3 billion undersea… Read more »

Jit Seng
Guest
Jit Seng

Why trust PropertyGuru whose articles tend to promote hike in property price?

Yang
Guest
Yang

AFFORDABLE housing in Penang to remain a MYTH?

What is a RM120,000 default compensation (for not incorporating low-cost housing units into their billion-ringgit projects) to developers ? That cost is simply passed on to property buyers of already-expensive housing units.

Read on :

http://www.malaysia-chronicle.com/index.php?option=com_k2&view=item&id=199681:affordable-housing-in-penang-to-remain-a-myth?&Itemid=2#axzz2nDsc7e7t

Jit Seng
Guest
Jit Seng

You already got RM1.2 million yet still kau peh kau boh like the world owe you something.
I only rent a room yet my life is more fulfilling without worry about market forces!

Yang
Guest
Yang

How would they survive selling coupon with a commission of only 5%. That means for every sale of RM1,000/= they only get RM50.00. To get RM1,500 per month they must sell at least RM30k coupon. Wow that will be very hard to achieve. They have to better find another job. A 25% commision would have been reasonable

tunglang
Guest

That means for every sale of RM1,000/= they only get RM50.00.

Is this the way to create more ‘decent’ jobs for the less skilled?
They richie in Komtar Tower should think out of the Cosmopolitan Frenzy Box.
Maximisation of profit for their wonderful annual report is no social caring act.
Looks more like an Ebenezer Scrooge (also an accountant) counting beans for a miserable bowl of lek tow th’ng (green bean soup) to share on the eve of Christmas with fellow workers. Who has the stomach to sing A Christmas Carol theme song for this miser act?

Stylo Logan
Guest
Stylo Logan

Do not be deluded by the high income nation dream.
You need good skills for high pay, unless you qualify for Amanah Saham Bumiputera together the 8.8% return without having to work at all.

Kelty
Guest
Kelty

We are told by BN’s TV clips that ‘Pengurangan Subsidi’ will bring rakyat to ‘Pendapatan Tinggi’.

There is no explanation how this is possible and how it will help the rural poor people.
Wonder if they could understand it or maybe they are all numbed by the promise of BR1M?

Kevin
Guest
Kevin

Yang, the current parking system is a stupid system. If the jaga kereta is not there when u park he will leave a bill on your windshield regardless of whether it rains or not. Then when u come back half the time you cannot find the guy. You then have to circle around wasting fuel looking for him. Pg must be the only place in the world that has such a ridiculous system. Ipoh and Seberang Perai have used the coupon system for decades without any problem. I agree that they should be given employment and selling coupons will not… Read more »

Jerry
Guest
Jerry

While many people could move along with modern city living, some still hang on to the past and prefer jaga kereta parking system, yet be given priority of a so-called affordable house in Penang island that is in accordance to such earning capacity. Like that how will Najib achieve his high income nation dream?

Batu Ferringhian
Guest
Batu Ferringhian

There are many BN politicians who has said worse things about other fellow Malaysians. Give LGE a break…

As for the new ruling, I doubt if it would even make a dent It’s too little too late

rilakkuma
Guest
rilakkuma

with the help of mainstream media, penang parking coupon vs parking attendants become hot issue !

i am sure anil shall report on this very very son…..

Noor Hassan
Guest
Noor Hassan

It is sad that many people here are extremely blind to what the state government is doing in Penang. Our beautiful island is being ruined. We are suffering from extreme environment damage. Please open your eyes and hearts. Don’t be a Pakatan Rakyat … licker. Think straight and right. There are many wrong things with this government that it is true what Raja Petra said: we need a third force – the third voice that can bring both idiots – Pakatan and meglomaniac Barisan UMNO into line. After that maybe 4th or 5th voice. We have let them become comfortable.… Read more »

Stylo Logan
Guest
Stylo Logan

You are right in the sense that rakyat are blinded already after decades of abuse and propaganda by BN. But they are slowing regaining their sense of justice under Pakatan.

najib manaukau
Guest

This problem will not be as severe as it is if only this empty promises making Najib is planning to build the one million affordable houses he promised to build during the GE. Where are these one million houses ? I bet you that he is just waiting to shift the blame and the responsibility to the in coming housing minister. That is or will be the reason he will offer or is he is to busy implementing other policies that are more important. Whatever excuses he may come up with just remember he made this promise and the people… Read more »

Yang
Guest
Yang

Ivan, 40 years ago that is around 1973, a bowl of mee cost about 60-70 cents. 10 cents is about 60 years ago in the late 50 or early 60. I believed Tunglang agrees as he is like what he say Tham Chiak Kooi. In 1973 there was a dramatic increase in property prices which is almost 100% due to the oil crisis. For your info in 1973, a single storey house increased from 9k to 19k. Yes I don`t deny that the price increase is througout the whole country and it is also due to the Barang Naik govt… Read more »

Yang
Guest
Yang

Tainless Lim, Are you afraid of the TRUTH or just like a plain zombie to DAP PR & LGE. We support what we think is right. We support LGE when harass by Perkasa and UMNO But now LGE is doing almost the same thing as what UMNO BN is doing without consultation and no CAT like awarding projects. Do you understand what is a turncoat. I am just an ordinary voter and I am not obliged to support anyone blindly just like UMNO has no right to accuse the Chinese of being unfaithful for not supporting them. Now you are… Read more »

Ah Sing
Guest
Ah Sing

Yes. Please ban the turncoat. Fedup this type of cheong hei.

Tainless Lim
Guest
Tainless Lim

I fedup with this YANG turncoat. HELLO ANIL, please ban him for good just like banning that idiot Gelakan K. Thankyou.

looes74
Guest
looes74

Don’t be like that but then we must discuss on the case on hand. … Me, I am more of a centrist & fabian socialist. Nobody not even Mandela can change the world with a click of the finger. Furthermore, it’s impossible to have an equal society. If that so, why God gave us free will. Simple……Everybody got the same intellect & etc etc

Ken
Guest
Ken

The state’s housing sector both public and private have come a long way. My take is that let the new housing rules kick in. If at all weakness crop up along the way – fine tune / amend, to serve the interests of all stakeholders.

Kevin
Guest
Kevin

The rules are good but why limit it to property below 400k? How many homes in Pg Island are below 400k anyway? He must be living in the 90s. If they want to curb speculation, the threshold should be more reasonable for this day and age. For example, houses below 600k cannot be sold for the next 5 years, but if the owners want to sell it they can sell it only for the same price they bought the property for. In other worlds, there should be a 100% real property gains tax for property disposed of within 5 years.… Read more »

kee
Guest

I think DAP, at least, is doing something by imposing a 3% levy on the purchase price next year (on foreigner). If today we are still under Gerakan i think we cant see any hills left in Penang, all has gone botak and the sea too… Gurney Drive is a good example of what Gerakan did to Penang !!!

looes74
Guest
looes74

Kee,
I felt that it’s more of the revenue gathering adventure. I am ok with it so long that it yields result

tunglang
Guest

Gurney Drive was Gerakan’s history prior 308.

Yet the mud still accumulates. For continuous mud-slinging CAT-blaming style? Now who is supposed to take care of Coast-Mud-Politan Gurney Drive?
Btw, there is enough mud to sling as far as Komtar Tower of Cosmopolitan Frenzies during New Year Eve.

kee
Guest

A friend just bought an apt in Iskandar Johore, 1200 sqft for 1.2m !!!

Yang
Guest
Yang

CM to Jahara: Sorry… but you’re still a racist

Good at least that is right for what he think of her as a racist but not a grandmother racist. Now I will give him my respect