Penang introduces steps to spur housing industry

GEORGE TOWN, Jan 28 — Penang today announced several measures to drive the housing sector in the state and address the current overhang of units.

State exco Jagdeep Singh Deo, who announced three changes to the state’s housing policy, said the oversupply in Penang is still manageable but the industry needed extra assistance to clear up the unsold stock.

One measure he announced is to allow more affordable housing units to be opened up to the general market instead of limiting all of the units to eligible first-time buyers.

“We have initially allowed 30 per cent of affordable housing units for open market sale so we decided to increase it to 40 per cent,” he said in a press conference here.

Previously, the 30 per cent quota had also been restricted to voters registered in Penang.

Now, Jagdeep said 20 per cent of the units will be made available to those from other states but working and living in Penang.

Affordable housing units in Penang priced between RM150,000 and RM300,000 were initially only open to eligible first-time buyers with an income cap of below RM10,000.

Jagdeep said the housing loan rejection rate is still high, which affected the sales of affordable housing units in the state, including those by Penang Development Corporation (PDC).

To address this issue, the state has decided to raise the household income cap so that more applicants will be eligible for affordable housing.

The household income cap for affordable housing unit priced RM150,000 has been increased from RM6,000 to RM8,000.

The household income cap for units priced RM200,000 was raised from RM8,000 to RM10,000 and for units priced RM300,000 was increased from RM10,000 to RM12,000.

“If the issue was on income limit, we will see how this increase in income cap income will pan out as we want to spur the market,” he said.

These two new measures are effective immediately.

As for properties above RM1 million, Jagdeep announced a measure to encourage foreign buyers.

“To encourage sales of overhang high-end properties, we will waive the three per cent approval fee for foreign purchasers starting from February 1,” he said.

The state government has a minimum housing price cap for foreign purchase of properties in the state set at RM3 million for landed properties on the island, RM1 million for stratified properties on the island, RM1 million for landed properties on the mainland and RM500,000 for stratified properties on the mainland.

Jagdeep said the minimum price remains in force.

“Last year, we lifted the three per cent approval fee during the Mapex property fair so this time, we will lift it for the whole month of February,” he added.

The housing development, local government and town and country planning committee chairman stressed that Penang’s overhang units are still manageable and under control.

“The state decided on these measures to stimulate the housing industry and also to assist buyers to purchase their first home,” he said when asked why these measures were introduced if the state’s overhang units are under control.

Jagdeep said Penang has about 3,261 unsold units in 2018, a slight increase of only 990 from 2,371 units in 2017.

He said the state has now exceeded its promise of building 76,000 units of affordable housing priced below RM300,000.

“We now have about 100,000 units of affordable housing being built, approved or completed so the issue is not about availability but accessibility by eligible buyers,” he said.

He welcomed the Finance Ministry’s decision to exempt stamp duty for house purchase of units priced below RM1 million for the first six months of 2019.

“This measure will spur the market further,” he said.

He then called on home seekers to check out the Malaysia Property Expo (Mapex) which will be held at Udini Square from February 7 to 10.

“PDC will be taking up booths at the expo to showcase its affordable housing units,” he said.

He said PDC will also be taking part in another housing expo organised by Guang Ming Daily in Gurney Paragon, also from February 7 to February 10.