COVER STORY
Penang government is doing their very best to improve the infrastructure, like widening roads, introducing new highway, increasing the number of public transportation options.”
- Lim
year against from 42.6% in 2013. “I would think the properties near the new infrastructure such as the second bridge, the coastal highway as well as Seberang Prai would be new hot spots.” “The Penang market is generally soft but places where new infrastructure is being built is seeing transactions, especially for land,” said Malaysia Property Incorporated general manager Veena Loh. “If the infrastructure and job creation around the second bridge is carefully planned and built to ensure connectivity for the residents as well as workers, the property values could increase steadily and could one day rival that of the old city.” “The advantages are the convenience and availability of good and affordable food found in close proximity to most places,” she added. She stated that the drawbacks are the build-up in traffic congestion. Penang mainland is relatively undiscovered and offers stronger capital appreciation so long as jobs can be created in the new areas that are being opened up. 22 I JULY 2015 www.propertyinsight.com.my
AFFORDABLE HOUSING IN PENANG Jagdeep mentioned that currently Penang has 12 projects in all 5 districts that is expected to generate 22,454 units of affordable housing. He proudly stated that Penang is the first state in Malaysia to have 100% affordable housing guidelines, because developers in other states have to comply with low-cost and low-medium cost quota, which under the national policy is 30%. Affordable housing prices are capped below RM200,000 - RM400,000. While on the mainland it is capped below RM150,000 to RM250,000. Developers don’t have to fret , because, even though Penang introduces 100% affordable housing guideline, the state will provide the incentives, “otherwise the developers cannot (achieve) breakeven, as the land cost is very high.” “It is very encouraging to know that many developers have stepped forward to submit their property development plans. Today, we have 10,000 units to be built by the private sector at our control price,” commented Jagdeep. Jagdeep pointed out that the state does not want to compromise on the quality of these affordable properties and does not want people to live in chicken coops, Therefore, apart from the price, the size is also control in the sense that these affordable units have a size of between 750 sq.ft. to 950 sq.ft. According to Chan, chairman of REDHA Penang, property prices are expected to continue to rise over the next 4 to 5 years, largely due to cost (labour, fuel, building materials) and compliance cost. CHANGING LOW-DENSITY AREAS TO HIGH-DENSITY AREAS Jagdeep cited an example of a project in Batu Feringghi that was highlighted in the mainstream media recently, there were already so many high-rise blocks of low-cost housing in Batu Feringghi, the residents’ complaints were actually in relation to a block of mixed development next to their housing estate. There are squatters that need to be
relocated and it is the state policy that they are relocated. The developer has agreed as per state policy, where the squatters are given low-medium cost units, but the residents contend that it is being built too close to them, so it is not an issue of overcrowding Batu Feringghi. The state wants to preserve greenery and make sustainable property development. Developers who want to develop high-density development with affordable housing components will be allowed, after the main mode of transportation is identified, but the affordable housing component will be under the state’s control. THE FUTURE OF PENANG Jagdeep mentioned that property development in the northern-eastern district is very saturated. The state cannot break any heritage buildings as the area is UNESCO certified and they can’t develop in an over-developed island. “That’s why we are telling the people that the future of Penang is on the mainland,” Jagdeep said. The Penang state government is coming up with new satellite township in Batu Kawan. This is a 15-year master plan where Penangites from the island can reach the mainland via the second bridge. The location is called Bandar Cassia. “The second bridge has just been opened. IKEA will open in Batu Kawan by 2018. A lot more industrial activity is planned over at Batu Kawan,” said Chan. “Buildings such as IKEA, university, hospital and 15,000 affordable housing will be built right here.” He said that there will be a third connection which will be the first underground tunnel in Malaysia, once there is connectivity and amenities, it will help provide jobs and therefore we will see more vertical developments in the Bukit Mertajam/ Butterworth region in times to come. A visit to these regions indicated that some of the property developments are already reaching prices comparative to the island.