GEORGE TOWN, May 28 ― Stuck building high-end property while buyers clamour for affordable homes, developers here are rushing to rejig their developments to fill the demand for houses priced below RM400,000.
The shift towards affordable homes has left a gap in the availability of such units, with Real Estate Housing and Developers Association Penang branch chairman Datuk Jerry Chan saying it will lead to a drop in property transactions for the year.
“There is a rising demand for affordable housing so developers are cutting down on luxury launches to tailor their projects to meet the demand,” he told Malay Mail Online in an interview.
Penang classifies all residential properties priced below RM400,000 on the island and below RM250,000 on the mainland as affordable housing.
The situation will also take time resolve itself. While the state has approved as many as 15 affordable housing projects here, just three are due to be ready in the next three years while the others are expected to be ready over the next decade.
“A total 22,512 such units are in the pipeline, out of which three projects had already started work and scheduled to be completed by 2018,” state housing committee chairman Jagdeep Singh Deo said.
Malaysian Institute of Estate Agents (MIEA) Penang branch chairman Mark Saw also expects a slowdown in the launches of luxury projects this year, as some builders delay such developments while demand leans towards affordable housing.
“It is a demand and supply thing so they will have to cater towards higher demands for this range of properties to be able to sell their projects,” he said.
“They will have conducted studies to look at the demands for the range of properties so some of them may defer the projects until the market is better.”
According to Chan, banks could help mitigate the issue by relaxing lending rules for first-time buyers.
Chan has repeatedly raised the issue of home buyers having difficulties in securing housing loans, saying seven out of 10 loan applicants will have their applications rejected due to stringent requirements by the banks.
When contacted, property researcher Ho Chin Soon Research’s Chief Executive Officer Ishmael Ho said the shortage in affordable housing was not limited to Penang but was present nationwide.
The increase in demand is due to young families wanting a home of between 700 sq ft and 860 sq ft with three rooms and space for a family.
“Anything above the range (RM250,000 to RM400,000) will have been too expensive and anything below will be too small for a young family,” he said.
According to figures released by National Property Information Centre (Napic), residential property transactions in Penang peaked in 2011 with 30,674 transactions but dropped to 23,266 transactions in 2012 and 17,700 transactions in 2013.
Last year, the total transactions recorded were 18,410 units, which is a 4.01 per cent increase.
The value of transactions also increased by about 6.91 per cent or RM490 million between 2013 and 2014.
The demand for affordable housing is expected to continue to rise or remain stable as the figures show gradual increase in transactions for properties priced between RM200,000 and RM500,000.
From a peak 8,433 transactions in 2011 for properties within this range, the transactions dropped to 6,190 units in 2012, 5,809 units in 2013, but went up again to 6,537 units last year.
