FEATURE state. For foreign investors, Jagdeep says that from 2001 to 2013, 2.2% of property investment comprises of foreign purchases. These acquisitions are mainly made by the Singaporeans, Indonesians, Japanese and Chinese. In Penang, foreigners are only permitted to buy properties starting from RM1million upwards. For stratified properties in both Penang Island and Seberang Prai the price cap is set at RM1million. The limit differs for landed properties where foreigners are only allowed to buy properties priced at RM2million upwards for Penang Island and from RM1million for Seberang Prai. Additionally, foreign buyers have to pay a 3% levy on the purchase price of the property bought after obtaining the state’s consent.
LAND AVAILABILITY
According to Resident Director of Knight Frank Malaysia (Penang branch) Tay Tam, although the state consists of mainland and the island, the latter tends to have limited vacant land for development. “With scarcity, prices for properties, especially landed ones, have all gone up. As a result, demand in recent years has spilled over to the mainland where property prices are much lower,” Tay shares. He adds that there is more land available for development on the mainland compared to the island. Tay also says the price that one pays for a stratified property on the island is sometimes equivalent to that of a terraced or semi-detached house on the mainland. “People often go for the stratified properties in Penang island… but by circumstances rather than by choice because there is a limited supply of landed properties. Plus, prices for landed properties are much higher on the island,” he mentions. City Valuers & Consultants Sdn Bhd’s general manager CY Lim Land explains that in Georgetown, for instance, land is considered very scarce. He says that most of the land available for development is situated in the South-West District namely in Balik Pulau, Sungai Ara, Batu Ferrigghi and Teluk Bahang. “The vacant lands in Batu Ferringhi, Sungai Ara and Tanjung Bungah areas are mostly hill land and needs to be converted before development can take place. The general guideline is; land that is 250ft above sea level and hill slopes with a gradient of more than 25 degrees cannot be developed. However, there are exceptions to special projects,” he tells. Currently, the prices of vacant land in Georgetown is about RM300psf to RM500psf for residential properties and about RM1,000psf for commercial
Penang State Exco for Housing and Town & Country Planning, Mr. Jagdeep Singh Deo
properties. Some areas experienced a significant land price increase following the opening of the Second Penang Bridge. Among these areas include Batu Maung on the island and the Batu Kawan vicinity on the mainland. The land prices in these two areas have gone up so much so, the landed properties in Batu Maung such as a two to three storey terrace house can cost up to RM1.2million. Prior to the announcement of the bridge, the initial price of such property was only RM450,000.
MORE AFFORDABLE HOUSING
With the market currently ‘heating up’, Jagdeep believes that it is timely for the Central Bank to impose some cooling measures to ‘cool off’ the market. “On our part, we have come out with some measures to tackle the issue, one of which is to produce more affordable housing in the low cost and low-medium cost sector. One of the reasons the market became so ‘hot’ is because of speculations. Speculators come and spoil the market. So for low cost and low-medium cost property, we introduced a moratorium period of five years where you cannot dispose of the property,” Penang-born Jagdeep says. “We did a joint venture project with the Penang Development Corporation where 10 projects to provide affordable housing are in the pipeline. About
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