Rehda asks Penang govt to amend law on high-rise residentials

GEORGE TOWN: The Real Estate and Housing Developers’ Association (Rehda) is proposing for the state government to amend regulations in order to facilitate flexibility when planning and designing high-rise residential projects.

Specifically, it has proposed the state government to implement the 2.8 times plot ratio with a maximum floor area of 122,000 sq ft.

Rehda Penang chairman Datuk Jerry Chan told StarBiz that the association wanted the state government to remove the 87-units-per acre guideline currently being enforced.

A 2.8 times plot ratio means a developer can build 2.8 times or a total of 122,000 sq ft of built-up area on an acre of land.

“Without the cap at 87 units per acre, developers can build high rises that come in a variety of sizes and layouts to meet buyers with different income and family needs.

“We are looking at pricing such properties not less than RM500,000,” he said.

Chan said this range of properties would fill the vacuum between the very high-end properties and the affordable units priced between RM200,000 and RM400,000.

Currently, if developers want to develop a high-density scheme comprising properties priced from RM500,000 upward, they have to build them under commercial titles and pay different kind of levies.

On affordable housing, Chan said many of those who had applied could not get the loan to buy the units priced between RM200,000 and RM400,000.

“This is because state government’s list of eligible candidates does not take into account whether the applicants are eligible for bank loans.

“We want the state government to allow the developers to draw up the list of eligible candidates for their affordable projects, as the developers would take the time to check on the applicant’s eligibility for bank loans,” he said.

There is a potential oversupply in the affordable segment, which has about RM7bil worth of affordable properties planned to date.

These 34,608 units, targeted exclusively at the first-time home ownership market with prices ranging between RM200,000 and RM400,000, will enter the market over the next three to four years.

Some 15% of the 34,608 units are in the RM200,000-RM300,000 range, while the rest are priced between RM300,000 and RM400,000.

“The state government’s income eligibility limit of RM8,000 for a RM300,000 unit and RM10,000 for a RM400,000 unit is slowing the take-up rate of affordable properties.

“Prospective buyers are ineligible to buy because their salaries exceed the RM8,000 and RM10,000 gross household income limit.

“Many are also barred from buying because they already own a property, they cannot get a bank loan, and because they do not live in Penang. This has resulted in the glut that is building up,” Chan added.