With the Covid-19 pandemic and the movement control order (MCO) badly affecting house buyers’ capability to acquire homes, Penang mulls revising its affordable housing price to below RM300,000 as well as increasing the number of rent-to-own (RTO) units post-MCO.
“The current ceiling of RM300,000 on the island and RM250,000 on the mainland will be reviewed and reduced by a certain percentage so that it can be accessible to first-time homebuyers,” said Housing, Local Government and Town and Country Planning Committee Chairman Jagdeep Singh Deo.
The Penang lawmaker intends to present his proposal to the state exco and Penang Chief Minister Chow Kon Yeow for approval, reported Malay Mail.
The housing department and his office will engage with industry stakeholders, like having roundtable discussions to include groups such as Real Estate Housing and Developers’ Association (REHDA), the local authorities and the various chambers of commerce on the mechanics of reviewing the ceiling prices for affordable homes.
“Maybe we can look at packages such as reducing the prices for extra car parks or reducing the prices for renovation packages of these units or review the pricing of basic units,” he said.
With the income of many people affected by the MCO, this has also impacted their buying capacity.
“Housing is a basic right of everyone, every person needs a roof over their heads, so to help this group of people who are affected economically, the state will increase the number of rent-to-own projects for the lower income group,” said Jagdeep.
Penang – which targets to offer 18,000 RTO units by 2030 – currently has 2,088 RTO units.
He revealed that the impact of Covid-19 and the MCO has compelled the housing department to expedite the process of procuring more units that will be converted into RTO units.
“I have instructed the housing department to identify more projects for RTO so that we can take over the projects and offer it as RTO units.”
On identifying units to be offered as RTO units, the department will look not only on completed projects, but also at upcoming projects, he said.
Meanwhile, the state also plans to introduce incentives for the property sector to clear the 3,508 overhang units within the state.
“Most of the overhang units, about 98%, are priced above the affordable range of RM300,000 so developers who want to clear their overhang must be wise in making decisions to lower their property prices so that people can buy it,” said Jagdeep.
He called on developers to be prudent in planning upcoming projects – not pricing them above the affordable price range.
“We can’t control their pricing but if they want to sell their projects at above RM1 million per unit, they are taking risks and if they end up with overhang, don’t come to us asking for help.”
Nonetheless, he explained that the state will continue to find ways to help developers spur the economy. This comes as the housing sector, indirectly and directly, assist over 100 other industries for each unit of housing like architects, engineers, the supplier of raw materials such as bricks, cement, earth and steel as well as post-completion services such as landscape architects, interior designers and gardeners.
Jagdeep said Penang will review its guidelines to offer more incentives for the delivery of affordable homes to first-time buyers.
“I will be suggesting a reduction of the ceiling price of properties eligible for foreigners.”
Currently, foreigners are only allowed to buy landed properties priced RM3 million and RM1 million for stratified properties on the island.
Over at the mainland, foreigners can acquire landed properties priced at RM1 million and RM500,000 for stratified properties.
“I will be suggesting that we review this pricing so that we can clear the overhang stock as soon as possible,” said Jagdeep.