Demand will continue to push property prices up

Strong foreign and local demand will continue to push property prices up in Penang.

Real Estate Housing and Developers’ Association (Rehda) Penang chairman Datuk Jerry Chan said developers had no choice but to sell their projects at market prices.

“People are grumbling that prices are rising too high, too fast but we have to buy land at market prices and there is no such thing as cheap land in the state any more — land prices have just skyrocketed.

“With stronger demand expected next year from Penangites working here and overseas as well as from foreigners, the property market will do as well if not better than this year.

“So, current property prices are really a true reflection of demand and supply — the high prices are not because developers are greedy,” he said, adding that the developers’ profit margin was “not that high.”

Chan, who was speaking during Rehda 2011 property market briefing here yesterday, said second-hand property units in prime areas were priced even higher than certain new developments.

Refuting speculation that the property market bubble was in danger of bursting, he said property prices had never crashed.

“There is no bubble — the supply isn’t that much greater than the demand.

“People lament the high property prices but if you compare the ratio of car prices to houses, the ratio in Malaysia is very low.

“In fact, compared to Klang, Johor Baru and other countries in the region, houses in Penang are not that expensive,” he said.

Chan said property prices on the mainland were “playing catch up” with the island and the disparity was about five times.

He added that developers opted to build super condominiums rather than more affordable housing because of constraints posed by government guidelines.

“Low density, low build-up and location are just some of the problems that are forcing us to resort to building high-end property units.

“Developers need greater freedom and flexibility because land on the island is scarce.

“The state government must look at whether it is going to allow more land reclamation, identify more housing development sites on the mainland and review its hillslope development guidelines,” he said. - By Christina Chin (The Star)


December 10, 2010 at 5:57 PMAnonymous

Datuk Jerry Chan Fook Sing from Asas Dunia Sdn Bhd and Rehda, Just shut your mouth up!!

Where is your social responsibility? Earn so much already and still defending your groups of developer.

You are running away from social responsibility of affordable housing by giving lame reasons "because of constraints posed by government guidelines".

The real reason is because you cannot make huge profit, not because of government guidelines.

Still living in denial symptom, if the price is still out of control at one day it will sure burst, nature will take it's course.

Remember how the US housing developers were screaming there is no bubble in 2006/2007 and see what happen next?

December 10, 2010 at 9:25 PMUnknown

This fella is from housing developer side a.k.a money sucking party. Their words cannot be trusted, and please don't blame to government for the build restrictions, we all know how LOOSE Malaysia law is, there is always loop holes to do things....SHAME ON HIM!!!!

December 10, 2010 at 11:09 PMbluebird

i guess bcos they need to build a certain amount of low cost house together with any project they r building, with the price of penang land , they have to build super condo to ensure profit.

But i still feel demand r there now... but not sure about that 2 yrs later

December 10, 2010 at 11:13 PMdavid

what a bull shit here..profit not that high, then why those listed company like mahsing, sp setia, ijm declare profit higher and higher for each quarter?

i wish he can see this comment, Jerry chan, you are bull shit lah...fuck guys should gain enough. and stop the price hike now. else let hike further and faster, and we can wait till burst to buy.

December 11, 2010 at 12:25 AMPeople

Don't expect any social responsibility from this pariah unprincipled character ... utterly irresponsible and untrustworthy, he will say anything to achieve his selfish narrow interest at the expense of the majority long-suffering people.

Penangites should boycott all his projects under Asas Dunia

December 11, 2010 at 10:51 AMAnonymous

And now, this Atuk Jerry Chan is putting pressure on state government, see what Atok Jerry Chan said below? They wanna attack our Penang hill slope area already :( oh God, please, please help our mother nature... :(

Copy and paste:
"He (Jerry Chan) also suggested that in certain areas, the 250 ft restriction on hill slope development be relaxed.

"We appeal to the state government to relook into all these aspects and see what can be done.

"They should do away with requirements and guidelines which are unnecessary and allow developers greater freedom instead of imposing limitations," Chan added.

December 11, 2010 at 2:20 PMconcern

Why these developer insist want to build houses on top of hill, land reclamation and PG Government approved their permit ?

They can build and develop other places in PG Island like Teluk Kumbar, Gertak Sanggul and Balik Pulau.

And PG Government must play their part to upgrade or build more infrastructure to Penangites linking these area to town rather than all living in hot area and make house price skyrocketed.

This PG Gov(under LGE) still sleeping not doing enough for Penangites that's why people(developer) take this opportunity to raise the price of the house on the island.

December 11, 2010 at 5:52 PMJacquie

Nature will take its cause, all we need is a humungous tonado to hit the Island.

December 12, 2010 at 12:39 PMUnknown

What do we expect..REHDA was form to protect developers interest..He will be out of jobs if he don't protect developers. Those buggers still don't understand and most probably still under the influence of the previous govt.
What we need is transparency and this guy don't have it. To be fair, other bodies also behave like that. Let's kick out those leaders who have no guts to face the real problem. Bodoh punya orang.

December 12, 2010 at 6:34 PMAnonymous

The state govt is still not doing their part as I feel they are stuck and also need their CSR funding towards Penang . Is not like I love to compare with Singapore but we might need to learn from them a lot. We do have friends or relative staying over there which speaks highly on their govt ..maybe it is time to learn b4 the next election . Just a thought but i always see that rich people always become richer .

December 13, 2010 at 10:36 AMSummer

From the prices you buy, at least 30% to 50% is developer profit. Let say you buy condo for 500k. Developer profit is 200k. This is real thing. When steel bar is RM4300 per tonne, condo persqft is RM300.00. But now steel bar is RM2300 per tonne. Condo become RM400.00 per sqft. You can see how good developer margin. Please don say anymore land prices is higher and higher. You already made profit at the building, some more want another profit at land... Penang gorvement must do something... if not, they will same as BN gorvement. Now bousted cant build hotel at herritage area, Penang gorvement suggest give them reclaim land. i think all gorvement is same same... Only know to show faces at newspaper.

December 13, 2010 at 1:23 PMGoldendale

The above "article" by Dato could be good for those invester, but not for those not even own a house.........
If we look at other angle, this will ensure our property price and/ or even can boost our current property and economy..... No choice but its a normal practice for those country/ state to keep growing.... Look at what happen in US, UK, HK, Japan, Singapore, etc.... The house price is freaking high.... This is the process for Penang to turn into their catagory as in world's eyes.....
Just a comment, No offence pls......

December 13, 2010 at 1:59 PMChong

Hey guy, we can never influence the Government, except the developer, they are rich enough to support thier approval by Government.
I don't know whether the new CM will act as past Koh Tzu Koon and Koay Kah Wah or not. (Those Hunza guy should not what i'm saying)
Wish Lim still got his social commitment to Penangites unless he can't control his officers or he himself can't control his desire.
Let's see.
(FYI, Jerry Chan's brother was die in an sea sport accident in earlier years, no need so angry to them, they are human being too)

December 13, 2010 at 2:05 PMChong

No matter you already owned a house in the Island or not, the moment you sell your island house you sure gain some (and you have a bunch of Cash on hand), But, the moment you want to rebuy new one again for own stay, you need to pay more than what you have in hand and may need to borrow again from bank.(This is not call upgrading, this is call re-liable as you never gain from the game; but most of us believe we gained)

December 13, 2010 at 3:03 PMUnknown

I can feel the anger - and I am not surprised. It is so sad that so many quarters (especially Developers) love the excuse of high price of land - it is as if 'high price of land' justifies everything. And I like what one comment, about whether the new LGE will be tempted by easy wealth like his predecessors - it is so easy to say 'work for the people' but now the talk has become the crippled walk.......

Like I've always commented in similar blogs - it is about time we all write to LGE and ask him to do something about it. He is sitting pretty comfortable, and disregarding us - the pinched-out-of-our-own-island Penangites. AngelineC.

December 13, 2010 at 8:46 PMmax

Whoever gets any condo (at the curremt price)with the hope of renting out and gaining capital is too late. Good luck.

I got a unit in Tg Bungah...>6 months...cannot get tenant at 5% rental yield.

December 14, 2010 at 4:32 PMAnonymous

Gong, anyways, my grandparent left me to another world few years ago, and I'm the sole income contributor to my family...the question is are the developers going to be pity on us? No, they don't. All they care is still lots of profits, almost ignoring the social responsibility, and will use whatever reason to fend off their greedy image.

Chong, I feel sorry for Jerry Chan's brother. At one point of time, someone close to us, or even we our self will leave this world to another world.

December 14, 2010 at 6:15 PMCK

Live in this world or depart to the next, loans still gotta settle to banks. Unless u're OK with ur next generation bearding burden of ur debt

Remarks about dwindling rental yields at Pg island "hotspots" such as F'ggi, Tg Bungah, P'Tikus, etc is very true. The only way to get good yields is by leasing out to foreigners from high-income countries (HK, JP, Korea, Europe, etc)or cash flushed nations (Mid-East, Brunei)...even they themselves are developing smart bargaining brains & downgrading themselves to smaller sized 1-2 bedroom units <1000sqft

Bad news indeed for those speculating on feverishly on super-sized condos (aka "apt on steroids")

December 15, 2010 at 7:48 PMTim

Income tax relief of RM10K/yr (for subsequent 3 years) will be over in another 2 weeks.

** Applicable to SNP signed before 31-DEC-10.

December 16, 2010 at 10:32 AMChong

Actually we can see most of us are not disagreed with properties price increased, BUT we do not want it from speculator factor, and need to be Voice up to those greedy developers and irresponsible authorities.
Those Speculators, Developers and Officers are our criticizing parties!
We buy for staying and upgrading, not for money making people can understand and this is the healthiest for economy.