GEORGE TOWN: The Real Estate and Housing Developers’ Association (Rehda) has urged Penang state government to do away with requirement for developers to build low-cost housing.
The chairman of its Penang branch Datuk Jerry Chan argued that the state should instead focus on “rent-to-own” scheme to help lower-income home owners.
“There are recent cases where buyers could not even get bank financing for RM17,000 to buy a RM42,000 property on the island. Although the actual value of such a property on the island today is around RM160,000, the bank still refuses to lend,” Chan said.
A typical low-cost housing in Penang is priced between RM42,000 and RM75,000 a unit.
Speaking at a press conference, Chan said that in place of low-cost housing, the state government should explore the “rent to own” property scheme to help the poor.
“Under this scheme, tenants would eventually get to own the property after paying rentals for a certain number of years. These ‘rent to own’ properties should be undertaken by the state government,” he said.
On affordable housing projects priced between RM200,000 and RM400,000, Chan said the present list of first-time home buyers drawn up by the state government was not reliable.
“The state government’s list does not take into account whether the applicants are eligible for bank loans.
“The state government should allow the developers to draw the list of first-time house buyers for their projects, as the developers would take the time to check on the applicant’s eligibility for bank loans before allowing them to apply for an affordable house,” he said.
Chan said there should also be a timeframe for the implementation of affordable housing projects.
“As the price of land in Penang keeps on escalating, it will not be possible in the near future for developers to continue building affordable houses. There are also other compliance fees which make such schemes difficult to implement,” he added.
On housing prices in Penang, Chan said the price of residential properties in Penang had not plunged due to slowdown in the property market.
“The old high-rise properties in Bayan Baru, for example, are still selling between RM395,000 and RM478,000 nowadays. These properties, built in the early 1990s in the south-west district, were first priced at around RM70,000 to RM80,000.
“Despite the soft property market, we are not seeing any correction in housing prices,” he said.
Chan said that based on market feedback, Singaporeans were now coming in to buy properties in Penang to take advantage of the weak ringgit, providing support for the local property market.
On the delays in issuing advertising permits and developers’ licence (APDL), he said there were currently about 50 projects, involving 20 to 30 developers, which still had not received APDL from the federal government.