Many housing projects in Penang are beyond the reach of locals, said the Consumers Association of Penang (CAP).
CAP vice-president Mohideen Abdul Kader claimed that the upper class and foreigners were being set as a priority for development projects.
“As foreigners and expatriates are able to afford homes at higher prices, this disrupts the market and raises land prices beyond what is affordable for locals,” Mohideen said yesterday.
Citing the example of the Singapore Housing Development Board, he said Penang’s first priority should be creating good homes for Penangites.
CAP research officer S. Mageswari said the safety of housing projects on hillslopes was not only questionable, but forest clearing was also rampant.
“This not only causes erosion but also flash floods and pollution as sediment flows down to the rivers and seas,” she said, claiming that the threat to marine life was also causing an adverse effect on the traditional fishing villages in Permatang Damar Laut, Bayan Lepas, Gertak Sanggul and other places in the south of the island.
However, the Real Estate and Housing Developers’ Association (Rehda) cautioned that property prices in the island would escalate if there was a ban on housing projects on hillslopes.
Such a ban would result in a shortage of supply, said Rehda Penang chairman Datuk Jerry Chan.
He was commenting on a call by two non-governmmental organisations to halt hillslope projects.
On Monday, a group of CAP and Sahabat Alam Malaysia (SAM) members staged a peaceful protest outside the construction site of a hillslope housing project in Bukit Gambier ahead of World Environment Day yesterday.
Chan said it was not true that only foreign investors bought hillslope property as they comprised less than 3% of the buyers in Penang last year.
“It is also not true that all hillslope property development projects are high-end schemes.
“There are quite a number of affordable projects in Paya Terubong, Relau, Batu Maung and Tanjung Bunga,” he said.
Penang Master Builders’ and Building Materials Dealers Association immediate past president Datuk Finn Choong said there were now a variety of new environmentally friendly technologies available to enable development on hillslopes to be carried out safely. - By The Star
52 comments
Don't you just love radicals?
It is like America telling China not to develop and progress because it pollutes the environment but it is ok for America to pollute the environment for the past 3 decades during the industrialization era.
So, they start implementing laws such as the kyoto protocol and the result was the carbon emission taxation policy.
There is a clear ulterior motive behind this attempt to curb growth for developing nations by America.
Now there is a bunch of NGOs saying that we need to save the trees.
I am not against it. However, if you do a background check on every single one of them, they live in houses that can easily be in the millions. The area where they used to live in used to be a jungle.
So, what they are trying to say now is that it is ok for them to chop down trees to develop but it is not ok for the late boomers to do so.....isn't it hyprocritical?
Just saying.
I love the environment and i believe in preserving nature. However if you have a bunch of radicals claiming that we can't chop down a few trees to build a highway or road to solve traffic issues, that is simething that i can not comprehend
Nice point Jeremy - this not just happening here
I am Lim Guan Eng supporter as he do quite well for Penang, BUT we need to tell LGE you are responsible for current housing development unbalances.
Why you still approve so many super-condo project when it too many and 90% local are unable to buy it.
We would not vote for u if you are weak in local deveoplement.
Hi Chong,
Hhmm....you have a point. If land is used for "luxury" properties, that means less land will be left for "affordable" properties. Simple as that. LGE, you better come up with something before your opponents eat you alive on this issue (if you had not noticed those front page news these few days)...:)
Hi jeremy tan,
I am not anti development. But I do think that extensive guidelines regarding chopping down of trees have to be in place before Penang goes botak and that will be too late. I am not saying we can't chop. We can, but are we required to re- plant? What's the ratio? What type of trees? Who's going to maintain the replanted trees? Tax payers? Developers? Cheers!
Hi Chong,
I do believe there are many affordable housing schemes in Penang. It just might not be at the location that you are interested in.
Inflation is a global effect.
Look at the prices of food and raw materials and you can tell that it does not affect the property sector alone.
Since, it is a global effect, the only way to solve this is to use tax payers money to build more 'super' affordable housing schemes aka HDB for the people which LGE plans to do at Batu Maung in the near future.
This leads me to the question, how many of you actually contribute taxes to the country.
I bet most of the citizens pays negligible tax or none at all. Perhaps less than RM500 a year as a citizen of Malaysia and you want a miracle to happen?
Just saying.
So, let's just say that you are the developer Chong. You bought this piece of land for this X amount of cash and you plan to develop it
How would you feel if the state government told you that the piece of land you bought cannot be developed according to your plans because a few Penangites are not happy with it? You have adhered to all the rules set by the MPPP and you did nothing wrong but because of a few unsatisfied people whom you don't even know and they do not know you as well decides that they don't like super condos....
You mean build low cost in gurney drive stretch or Tg Bungah beachfront instead of luxury condo?
Then, what should be the price of that low cost flat? Coz S'pore govt do that but it's close to SGD1m a unit.
i get very irritated whenever i see the blame on govt for inflation or high property prices. we should blame ourself. it's a chicken and egg thing. we want better quality of life, bigger house, high quality food, overseas holiday, branded bags/watches, better education for kids. so, we hope govt will bring that fortune by bringing in MNC, more job opportunity, with higher salary. with that, we then pour it back to spending as we wished. Ask our self or look around, how many people eat hawker food, plain vanilla version. most people will add chicken wing, add fish ball, add vege/bean sprout, add soup, chicken inlet...in johor b'cos they earn SGD, people add "abalone" to "koay teow soup" and bak kut teh. next to corner club in Gurney, people eat steam fish as breakfast. drink orange "double". and how many people never go holiday for 5 yrs. we create demand and when supply cannot match, price goes up. as simple as that. i everything also plain vanilla and my friends all said i "kiam siap".
then govt bring in tourist, they like our property, they buy. same as the "ang mo" boss. i am not sure you can tell the MNC to invest but stop their boss from buying our property!!!
those who wants "things" cheap, make sure you tell LGE to stop developing the state, and all money will stop flowing in. everyone goes back to basic. eat nasi lemak, carry plastic bag instead of LV bag, play with kampung chicken instead of ipad. free holiday in balik pulau waterfall, pantai keracut. drink 1 dollar coffee and no starbuck.
think about it, is that what you want????
Jeremy & twyeow88. Well said. Nobody can't stop the development, the government role is to manage the development with proper town planning, and to make sure the said developers adhere to the strictest safety standard in the case of hillland development.
Talking about hypocrisy :
USA talked to China : " You are a bad guy, you manage your currency, therefore you are a currency manipulator, we will sanction you one of these days "
China to USA : " But excuse me sir, you are printing your currency like nobody business, out of thin air. And you are still owning me so much money denominated in US Dollar, isn't that worst case manipulation tantamount to cheating ? "
USA to China : " We don't call this money printing currency manipulation, we call it QE here. We live our American Dream and we are exercising our basic human right to print money as we wish. For your information, now we are contemplating QE3 since QE1 and QE2didn't do much. You have problem with that ? "
To be honest, it is unfair to blame LGE because Penang property prices gone up, it is more like a supply and demand issue. If people are not buying, how would the prices gone up?
Regarding the supercondo projects, the location that the supercondos are built, if they are not for building supercondo or expensive landed property, what would they build? LMC? it's just simply financially impossible for developers to do that.
And I can't understand why people keep saying there is not enough cheap housing. Last time when I was thinking of buying a LMC flat nearby Jelutong there, the construction was nearly finished when I went to the developer's office, I was surprised that there were still quite a lot of units left to choose. If Penang has short supply of cheap housing, why are those LMC flats not sold out? On the other hand, I often hear that 300K-400K condos sold out within the first few weeks of launching.
I think its not that 'only the rich can afford Penang homes', but it should be 'only the rich can afford Penang homes that most people want'. There is still cheap houses in Penang, it's just those cheap houses are not the location that people want. And honestly, who doesn't want to stay in a luxury beach front condo with your own private swimming pool?
QE1, QE2 and now the soon be probable QE3 is one of the main culprit of our inflated price across the board, that includes property price in Penang. The world only downtrodden super power is exporting inflation continuously worldwide, and we are sitting in the comfort of our own place condemming our state government ???
Interesting topic.
Simple life and simple man like me, I used to hang out at kopitiam when no coins in pocket. However, every now and then I'd bump into Starbuck for having a cup of expensive coffee when pocket bulged!
Likewise, Gurney drive and Tg Bungah are already known for rich and just imagine if government build a low cost flat at the beach front, would u say this is a wise decision? Same thing happen at HK and SG for the 'luxury' land. Did u see they build low cost flat and sell cheap price at good location?? It is harsh for us to accept the reality but fact is still the fact.
If u want to have a seaview place and yet with reasonable price, then Summer Place is one of it. If wanted to stay in landed house, then go for Teluk Kumbar or Balik Pulau. If talk about status, then opt for Jesselton Height (don't ask why government no reserve land for low cost flat at this area).
Well said everyone. You guys got it right, this is the basic fundamentals of economics and capitalism.
From this discussion,it goes to show that Penangites are indeed intellectually mature.
Hi W,
I tend to agree with you on certain things that you have mentioned, particularly low cost flats. I also feel that these flats are extremely cheap and there are plenty in the market. I also agree with you that condos in the price range of RM300k to RM400k are hard to come by nowadays, especially in good locations. There is a big disparity and there must be a reason for that, gov should try to analyze and understand the situation. Is the policy in practice still relevant today? Has the ratio in lower income/middle income/high income changed? Are their needs different today compared to when the policy was created? Lots of questions, someone needs to look into that.
But when Maverick said building "beach front" low cost flats, I think you are stretching things a bit too far and not getting "it".
We do have LMC flats being built on your so-called "luxury" sea front land in case you haven't noticed. Sri Tanjung Pinang next to Island Plaza, and Next to Tesco coming up, Tanjung Tokong "tua pek kong" flats, "Tsunami" flats near Ratu Mutiara etc. That's not the issue, you are missing the whole point. In fact, I do not know what you're talking about, you're full of crap!..:)
In my opinion there are still alot of affordable houses available in both penang island and mainland just that people are too spoilt with choices. People are blaming goverment for something they can't afford and to voice their unhappiness. For me is pretty simple. If you want to stay in luxury condominium/houses go and work hard and earn more. If don't want you can opt for medium/low range apartments/flats/houses. In the end, there is no one to blame if you cannot afford something except yourself. Life is fair.
Condomana,
Kok Sur Lu said:
"QE1, QE2 and now the soon be probable QE3 is one of the main culprit of our inflated price across the board, that includes property price in Penang. The world only downtrodden super power is exporting inflation continuously worldwide, and we are sitting in the comfort of our own place condemming our state government ???"
Those are the reasons for the disparity in income
We are on the road of monetary expansion and there is no turning back. Default or print more. Since they have gone so far and we have 52 elections this year worldwide, most likely we will see QE3 very soon.
The state can't do anything about it because it is a global effect.
Maverick has a point.
There are many affordable housing areas in Penang. It is just that everybody wants to stay near Gurney Plaza, Straits Quay or in big houses in great locations etc
This is what i call "The American Dream" Syndrome.
Every township will have areas zoned for LMCs which you have to apply through the state government based on your qualifications according to their criteria.
What Maverick was referring to would be beachfront super condos and seafront super condos such as Gurney 8, Quayside, By the Sea, The cove, 1 Tanjong, Gurney paragon, Silverton etc
well done all of you..speak my point out. the most powerful point are let everyone of us as pg guys BE CONSIDERATE to the land owner or as for the govt. pls make sure that they are built according to the plan and environment. from i can see now are most of this developer are building it with nice and well maintained landscaping
about LMC..there many lmc or lcf apartment for sale, why wait for the govt to built when they can just buy direct from the owner. there are still a lot of LCF below 100k, places like relau, farlim, paya terubong etc,.
Hi jeremy tan,
Whether there will be QE3 or not, we would leave that to the Presidents. But I am sure BNM is smart enough to shield us from unwanted hot liquidity which might destabilize our property market knowing the problems that Spore/Hong Kong faced in the past few years. Preemptive measures can be taken. So I beg to disagree with your statement that "The state can't do anything about it because it is a global effect".
Now moving on to Mavericks comments. When I said he missed the point, I meant the whole issue shouldn't be about LMC flats. No one's complaining about LMC flats as they are "price controlled" items, they are still cheap, and there is no shortage of it in the market. Therefore it will be a waste of time to talk about LMC flats in any discussion.
So what's the issue? Is anyone blaming the gov for not building LMCs in Jesselton? Don't think so! There are already blocks and blocks of LMCs in the upscale Seri Tanjung Pinang. Is there a resentment against the rich? Don't think so. Everyone understands/knows their place in the system. So what's the issue?
I think the issue is - Problem Statement : Home buyers are being cornered into paying more than what they are supposed to pay for non price controlled properties.
In other words, due to the activities of developers building "desirable" products that are marketable to foreigners, they are able to price certain products much higher than local standards, therefore creating a ripple effect in the industry for developers/land owners to PROFITEER from the situation, made worse by easy credit and property euphoria in the last few years.
I do not dispute the fact that only a few percentage of the TOTAL housing built are being sold to foreigners (as highlighted time and again by those who fear gov might implement measures to slow foreign buying), but that few percentage actually provides a great IMPETUS for pushing price upwards. The effect of the few percentage must not be underestimated.
So Maverick, if the developers were to build the same beach front luxury condos and not allowed to sell to foreigners, the prices would have been significantly lower...:))
In short, less money into the pockets of the few greedy developers/land owners, and more into the people's pocket. LGE, maybe the people deserve more than the few hundred ringgit handouts for the aged....;)
Condomana,
I stand by my view that the state can't do anything about inflation because it is a global effect.
Worldwide all governments are embarking on the route of monetary expansion. Low interest rates and lots of money printing.
BNM raising interest rates significantly? No.
Can the state government increase interest rates? They would if they could but obviously it is the Federal Government's decision.
I don't think they will be raising interest rates anytime soon when the government has debts more than 50% of GDP....
I don't think they care about shielding you or me for that matter.....
We can only shield ourselves by playing along with them. Buy assets.
I quote you:
"I do not dispute the fact that only a few percentage of the TOTAL housing built are being sold to foreigners (as highlighted time and again by those who fear gov might implement measures to slow foreign buying), but that few percentage actually provides a great IMPETUS for pushing price upwards. The effect of the few percentage must not be underestimated."
" if the developers were to build the same beach front luxury condos and not allowed to sell to foreigners, the prices would have been significantly lower."
-unquote-
That's not how capitalism and economics works. Besides most of the buyers of luxury super condos are already Malaysians?
We can't even consider this as an option in a democratic country. Think North Korea, Burma and Cambodia previously? The banks won't even lend you money and your wage would be USD50 a month. Try buying a super condo with that.
We should stop using foreigners as an excuse. There are still many affordable housing schemes in Penang but just not at the desirable location that we want that's all. Farlim, Ayer Itam, Balik Pulau, Sungai Ara,
It is the American Dream Syndrome.
Pushing price upwards is inflation. Money printing and low interest rates.
Try increasing interest rates by 500 basis points (5%) and you will see a significant slowdown in the property sector instantly.
Nothing personal, you should have bought the Brezza back in 2009 when you were debating with Lightning and Thunder about property prices around Seri Tanjung Pinang area.
If you monitor the price of commodities it is a clear sign that inflation is here to stay for a while.
I don't think people are greedy, they just love money. Let's keep it real.
Certain people don't seem to understand that we are living in a market economy, where market forces is the king and tbe rule of supply and demand is the name of the game.
Government regulation can only go so far before it screw up the whole market dynamism.
Just to sidetrack a bit. I happen to be in Ipoh now. I don't see developers rush in to build in Ipoh and price their products higher that market. And I don't see Ipoh people being cornered into buying higher than market price house either.
Mr. Supply and Mr. demand are working at all times,Stupid.
Sounds like he is going back to communism- govt in full control.
Hi jeremy tan,
Hehehe.....It might have appeared to you and natural for you to assume that I did not own Brezza back in 2009 when I highlighted some of the bad things about it, but that's why people say you cannot judge a book by the cover. And I'm counting on you now to get UDA to fix all the defects!...;)
Going back to inflation, of course we cannot expect state gov to shield us from general inflation. The central gov is doing a fine job in that area as we take cheap petrol & electricity for granted every day. Surely things will be much better if a reduction in subsidy can be implemented and offset by a higher national income.
Property purchase is a big deal for most people as it eats up a big chunk of their monthly income. The state has the power to control property related matters (ownership, buy/sell, building permits, type of properties being built etc). LGE just needs to figure out a way to "buffer" (maybe not isolate) local housing from foreign liquidity shocks, that should be good enough.
S'pore has a much tougher regulation for foreign property ownership compared to Penang. S'pore is a communist country ah?
Hi KOK Sur Lu,
Oh yes, you are right, you always have the effect of Mr Supply and Miss Demand (I changed your Mr Demand to Miss Demand to reflect the commonly accepted reciprocal nature..;)) for price fixing. BUT, whether the demand is REAL or SPECULATIVE, that's something we should watch out.
Hi Condomana,
If you compare Sin to PG, the alignment is apparently out. Sin is the most livable city in Asia, if not the world, just qouting one of the latest " Ang Moh " survey. The number of expatriat in PG compared to Sin is negligible. The mainland Chinese speculate big time in Sin. Fortunately, or unfortunately, PG has yet to receive their attention. PG can emulate Sin to set up HDB, that is for sure.
Who are we or the state gov. for the matter to determine whether the demand is real or unreal ?
The Market will determine the equilibrium of demand and supply.
Those speculator will get burned whether they are in property, stock, bond or any other comodity. The developers are likewise if they up their stake too much.
My point is governmental regualtion can do only so much in a free economy, the market got the final say.
Condomana,
: ) So you did end up buying a unit there....that's good. Sub sale i believe? Since UDA already started building it and there isn't any units available during your debate between Thunder and Lightning. Lightning wanted to sell the unit to you, something like that.
Anyways, more than 50% of Singapore's population consist of foreigners.
Foreigners makes up 8-10% of our population here in Penang.
By right, to ensure a better economy that eventually leads to better wages for the locals we should push the figures up to 30% foreign ownership. It would be a healthier and sustainable market with this ratio.
That brings me back to the argument of a free market.
The more regulations you put in place and the more you try to tamper with the system, eventually it will find its way to correct itself.
We are not a communist country.
We don't practice a system where the government governs everything.
If you are talking about proper town planning i can see where you are coming from but that doesn't affect property prices at all. Prime areas will still demand a premium.
Condomana, their hdb is now at least SGD500k and mass mkt condo is SGD1m. make sense to control lah.
ours control what? to go back to kampung price? or to piss off foreigners before they arrive with all the measures? we strive to be a developed nation. and this is just one of the many painful transition that we all have to go through. anyway, no pain no gain what!!!
Dear twyeow88,
You need to shit because you have to eat. And not you need to eat because you have to shit...:)..You need to understand basic cause and effect. You always get them mixed up.
You think Spore has the best model? You think Ang Mohs have the tastiest sausages..;)? You got to think out of the box (for your case, out of the toilet bowl!..:D)
Haha... By the way condomana, i wouldnt bother responding to this genius who thinks buying property is like buying mutual fund... He is in a league of his own.... :p
Hello KOK sur lu,
I am glad you brought up Spore the most liveable city in Asia. You have rightly pointed out that the survey was done by "Ang Moh" as it actually measures what expatriates think about staying in Spore, disregarding the locals. But when you look at happiest nation survey, Spore is nowhere to be seen on the list. And that reinforces the grouses I hear from friends from my recent trip to Spore. Things like "You feel poor with S$1 mil in the bank", "you can't do much with S$1 mil nowadays"...etc is commonly heard.
Who are we or the state gov. for the matter to determine whether the demand is real or unreal ? A typical way of screening out real or speculative demand from overseas is by way of introducing hefty transaction cost (in the form of stamp duty etc) to make short term speculation not worthwhile.
If you let market go free flow, again you are right to point out that finally if things go wrong, speculators themselves will get burnt, but we shouldn't forget the lesson learn from the recent sub-prime crisis, where asset mortgaged to banks as collateral goes under water, that's when the banking system goes into problem, and innocent people who took loans to buy overpriced properties for own residence end up owing the bank more money than what the properties are actually worth.
Of course we are surely not in that danger zone yet, and preemptive measures will be most suitable and effective now to make sure we don't even get near to that stage.
whether out of the box or out of toilet bowl, you are too idealistic. but in reality, we are seeing "high" prices across Asia.
Hi Condomana,
Just want to clarify
You claim that BNM is doing their best to shield us from hot money
Now you are saying that speculators will get burnt because the banks are loaning them money that they can't afford to pay?
So, my question to you would be, is BNM doing their job or not?
If they are than the Banks won't be lending money to people who can't afford it.
There are a lot of people that i know who wants to buy a property but got their loan application rejected because they don't qualify for it.
It is indeed very sad because everything is inflated and it is beyond people's affordability.
Monetary expansion has led to inflation and sadly to say our wages are not increasing in line with inflation. Some people benefits from it (bosses) some don't especially the workers.
Steel, cement, labour, across the board has increased susbtantially. We can't expect home prices to remain the same when everything is going up.
What happened in America is very different. They allowed people to borrow money above their pay grade that we very well know that they can't afford to repay in their lifetime.
Culturally as well they are spendthrift. They don't save and invest.
That is why i kept on saying that it is the American Dream Syndrome.
In Malaysia, we all have all kinds of measures to ensure that this doesn't happen. Now the amount you can loan is based on your net salary and not your gross. If you were to purchase more than 2 properties etc.....
Foreign ownership is only at 8%...tax the 8% for wanting to invest in Penang?
Facts: Wages are not increasing. Inflation pushes assets prices up. People are not happy. So, they find a scapegoat to crucify.
Truth: I do agree that there is a housing bubble but it won't pop yet until BNM tightens liquidity and increase interest rates.
You need to see a massive slowdown for it to impact the majority.
culturally our Gov..t is spendthrift,too many white elephant projects taking place,wasting money just because they want to be Malaysia boleh.
To counter inflation,they subsidy the poors and less fortunates with 500 bucks,what about middle class?they probably have forgotten.
Wager not increasing?cut down the foreign workers and use the local lah.(this will help in salary increase and improve the jobless rate)
Hello Condomana,
Most part of your comment above make sense.
Whether the transaction stamp duty, RPGT or whatever cost is hefty enough or not, that is the prerogative of Zeti and her team to decide. And they are paid to do that, just like any central bankers.
Analogy will be like whether doc. prescribe you antibiotic when you are down with flu. If the dosage is too heavy, it may bring along other long term side effects. It is specially so when it comes to properties sector as it's one of sectors with the most pervasive multiplying effects.
If the pre-emptive measures are too premature or too strong, all other sectors of the economy will be dragged down. Hard landing is in of the picture. Then we are creating a long term problem with a short term solution.
Depression, deflation , stagnation and many others dirty words of economics will be in the picture.
Property price drop, car price also drop, consumption also drop, retailing business drop, manufacturing activities also drop,your business or your boss's business drop, and finally they decided to drop you.
Then your hair start to drop, people with dropping hair problem and getting bald generally will not be interested to purchase new property,no matter how much the property price is stagnant or worse,drop.
My point is, we are in NO better position than the central bankers to determine how punitive the preventive measure should be. If we are not applying measures as severe as Sin, it doesn't meean that we are not doing enough simply for reasons already spell out very clearly by Jeremy Tan, and also for the simple reason of economic composition and economic outlook of Sin is so much different from Mal. You will be so surprised if we take a look at their GDP per capital compared to ours.
Whether they are happy or not, whether they are sexually gratified or not, whether their societal moral fabric is descending or not, that is another story altogether.
We have to keep our fingers cross that Zeti knows her job well, and hopefully it is a soft landing. Or else the picture is not going to be pretty.
But if we were to compare USA sub-prime crisis vis a vis Malaysian, especially Penang so- clled properties bubble, then we are again like comparing the giant killer whale to our pacific ikan bilis. Especially after taking in consideration the conservative small scale nature of our speculators.
To talk about the origin of the sub-prime,then we have to bring up the long story of the supply side economy, the Reaganomics and the deregulation policy that comes with it.
That would be another story in another day. It is such a long story to tell and probably by the time we finish with it, USA has started QE3 and printing again, Angela Markel has u - turned on her austerity drive, and China restarted on the consumption drive to rev up the momentum. And that will be another scenario altogether.
Don't ever blame our state government, or even our federal government for that matter. They are TOO SMALL, or in some cases, too clueless to do anything meaningly, besides handing out RM500 here and there, and acting like they have saved your future.
Sorry, correction on the last paragragh of my comment.
Don't ever blame our state government, or even our federal government for property price hike.They may not know how to handle this situation bearing in mind the global uncertainty. But the beauty is, you certainly can show you displeasure through your forthcoming vote.
Our MAL Govt. is either TOO SMALL, or in some cases,TOO ClUELESS OR TOO SIDELINED in this globalized economy, to be counted and to do anything meaningful. Therefore, they only know how to hand out RM500 here and there, and acting like they have saved your future.
Hi Kok Sur Lu,
Good job.I like your analogy of what follows in a major economic slowdown. It is as realistic as it can get.
"Property price drop, car price also drop, consumption also drop, retailing business drop, manufacturing activities also drop,your business or your boss's business drop, and finally they decided to drop you.
Then your hair start to drop, people with dropping hair problem and getting bald generally will not be interested to purchase new property,no matter how much the property price is stagnant or worse,drop."
However, i blame the federal government for destroying our savings through inefficiency in money management and corruption.
Our country needs smart,bold,clean,humble and decisive leaders.But unfortunately we do not have.Instead there are a lot of smart asses, cowards,corrupters,selfish and aggressive leaders to govern us.
Agreed with Jeremy.
Sorry for out of topic.
Hi Jeremy
Corruption is public enemy number one. Fully agreed.
Besides, thinking of our courts, cops,media have also gone to the dogs, my mouth is foaming.
BN , short form for Banyak Nonsense for 50 years, and that's the bad consequences.
But I afraid I can't blame them squarely on the property price hike and the inflation across the board.
We can blame them or rather laugh at them for only doing the window dressing donkey job and refusing to look at the fundamental and structural changes for our country.
I do agreed with condomana. Ok Jeremy Tan, since you want to talk about economy. Let me ask you a few question, what are the overall earning power of the local penangite? What was the Purchasing Power parity of the people in Malaysia/Penang? What do you mean by supply and demand, overall Malaysian are only about 28mil population? What I can see is there is a lot of uncontrollable hot money was parking in Penang. QE3 or not, its controllable! First of all, free market don't exist. Second Malaysia apply soft peg system and not a free float so do 1997 financial crisis hard peg. Third, policy maker were able to control it. Fourth are you saying that is penangite fault for not able to afford super condo? Fifth, have you read through the statistical data of GDP? The greatest grow in GDP was construction. While manufacturing, service etc was far from behind. If you notice well the GDP has drop since Pr1Ma was there, look at the indication.
Believe me or not. One day Penang/KL/Johor/Sabah will have the greatest bubble blow similiar to Spain and US. And the one going to suffer all this is the buyer not the government or the state government. At that time, again we going to end up in square one the asian financial crisis in 1997. Too many ghost house around. Open your eyes wide and go look around, just move around penang island. I was old long stay in Penang and watch penang change from Kampung to a states full of building, I have see the 1997 crisis, I has see the crisis were all the developer run away with speculator money. People blind themselves with money and forget the history. And ya, since Malaysia was not communist, you will see the bubble boom faster than China.
Hi Steven,
Hot money is regulated by BNM. Obviously BNM is allowing hot money to enter our country. So, instead of whining about this and that why don't you make good use of cheap money and do something about your investments. Provided if you qualify for a loan.
Free market does exist. Is anyone forcing you to buy a property? you have the choice to decide whether to buy or not right?
Supply and Demand does exist even if our population is of 100 or 1 million people. I am not sure what is your point by stating that our population stands at only 28 million people and hence are you implying that supply and demand is not significant? i don't follow that logic or argument that you just made.
Fourth, did i imply that is Penangites fault for not being able to afford a super condo? Where did you come to such a conclusion? Are you high or something? haha.
I am just saying that if you can't afford a condo you should look for something within your affordability range. If your budget is RM700K than find something within that range. If insist on a bungalow for that price than go somewhere else in mainland or balik pulau. I am sure you will be able to find big houses there at an affordable price. Not everyone can live the American Dream. There must be rich and poor people. Facts of live. Sorry the truth hurts. I don't plan on sugar coating my words because it is best to be direct with you so that you fully understand our social system.
A lot of hot money parking in Penang? I call that FDIs- Foreign Direct Investments.
Hot money is used in the stock market because it is easy to liquidate by foreigners and there is significant tax on the profits earned from the stock market. So when they pull the hot money out our stock market falls. Since, Malaysia's bursa is mostly controlled by our local funds. I don't see any inherent threat if foreigners were to pull funds out. In fact, we need more FDIs to keep our economy booming.
Since PR1MA took place GDP has dropped? WOW where did you come up with some conclusions.
Btw, since we are talking about Penang right. PR1MA is only constructing 20,000 homes for Penang people. So 20,000 will pull down our GDP? What common sense is that really? I mean honestly think about what you say. I find it really funny.
Malaysia bubble boom faster than China? Seriously, do you know how much is a 800sft apartment in HK cost?
You claim that you are an old timer and you know your economics but from the way you speak i would assume you probably got all your informations from table topics at a coffee shop.
If you really know your stuff fellow Penangite. You won't be talking gibberish right?
Oh yes referring to your question to me:
"Ok Jeremy Tan, since you want to talk about economy. Let me ask you a few question, what are the overall earning power of the local penangite?What was the Purchasing Power parity of the people in Malaysia/Penang?"
So, you are asking me directly and i shall answer you accordingly. Penang's earning power varies depends on your profession because we don't have enough talented people like Singapore. The talented Penangites would probably be earning RM10-15K a month. Of course you will have those with businesses that earns RM100K a month. And of course you have the majority that earns around RM4K a month.
Purchasing power is country specific. A Singapore dollar can buy 2.5 times more in Malaysia.
So i believe you are trying to point out that a working class Penangite that earns RM4K wouldn't be able to afford a RM1 million dollar home in a prime location. My answer to you would be yes you are right.
So perhaps he can consider an apartment of 800sft in a prime location or he can opt for a terrace house in Balik Pulau or he can also opt for a Mansion bungalow at Jawi.
Hi jeremy tan,
First I would like to thank you for the interesting debate.
Second, I not too sure what makes you think that I study my economics from coffee shops. Fine, let's me correct your erros based on the information I get from coffee shops topics.
Fix 1:
Free market does exist. Is anyone forcing you to buy a property? you have the choice to decide whether to buy or not right?
My Ans:
Please attend coffee shops economics 101, free market means market that are directly affect by supply and demand WITHOUT government intervention. In another words, there shouldn't be any policy implemeted for the market. If thats the case, Malaysia currency shouldn't fix at 2.5 vs Singapore dollar, it should be floating and let the market determine the rate. Besides that, there shouldn't be any subsidy for your petrol or food etc.There shouldn't have any regulation from the BNM to set the rule that what are the critieria you need to fullfill to get a loan etc.
Fix 2:
A lot of hot money parking in Penang? I call that FDIs- Foreign Direct Investments.Hot money is used in the stock market because it is easy to liquidate by foreigners and there is significant tax on the profits earned from the stock market. So when they pull the hot money out our stock market falls. Since, Malaysia's bursa is mostly controlled by our local funds. I don't see any inherent threat if foreigners were to pull funds out. In fact, we need more FDIs to keep our economy booming.
My Ans:
Please don't mix up hot money and FDI. FDI are different from FPI(foreign portfolio investment), FDI are a more heathy form of cashflow which invest in production or business in a country by a company in another country, either by buying a company in the target country or by expanding operations of an existing business in that country. FDI are not as liquidable as hot money. Hot money are refering to flow of funds/capital from one country to another to earn a short term profit and they can move out from the market very quick which will cause instability. The hot money I refer to are the loans or investment on property, your point of having MYR 2.5 to Sg dollar 1 and the BNM has no control over hot money were 100% correct and I agreed with that. What I can see from here is with the surplus of the currency + QE3. This cause a lot of investor to transfer their fund in a way of private fund inflow into emerging Asia. But how do they gain from doing that? Simple, they won't just park their money to nothing. They will park it into asset such as property etc, which drives up property price in all asian region, especially those country that are in development. When place like China, HK and Singapore property price stop going up, they will then need to look for the new place to play and Malaysia are one of the target! Take note those investment are very risky, if any bad news comes in those who thought they are safe by sitting on the property train will get burn. Big investor react faster than we do.
Reply 1:
Since PR1MA took place GDP has dropped? WOW where did you come up with some conclusions. Btw, since we are talking about Penang right. PR1MA is only constructing 20,000 homes for Penang people. So 20,000 will pull down our GDP? What common sense is that really? I mean honestly think about what you say. I find it really funny.
My reply:
My conclusion are coming from the news on 2011 when I when through the real GDP from the statisical department for construction drop 6.0 to 4.6. But its only by guessing as there is no data on housing transcation provided by the statiscal department. It also could due to the end of QE2.
Reply 2:
Malaysia bubble boom faster than China? Seriously, do you know how much is a 800sft apartment in HK cost?
My reply:
I know, please don't compare apple and orange, the timeline of the inflation, the average salary range were different and same goes to the exchange rates. Besides that, HK property are also hitting the final stage(their price already very high for longtime ago).
Reply 3:
Supply and Demand does exist even if our population is of 100 or 1 million people. I am not sure what is your point by stating that our population stands at only 28 million people and hence are you implying that supply and demand is not significant? i don't follow that logic or argument that you just made.
My reply:
What I would like to highlight is if supply and demand do really takes places, why house in other place such as Jawi can remain that cheap? Even with the labor cost , material cost and petrol increase etc? Does it really cause by demand? I don't think so. It just news spread to create demand, there is a lot of news that will affect the market. I would said, it was caused by speculation from rich class/developer and hope middle working class to go take a bitten from it.
Reply 4:
Fourth, did i imply that is Penangites fault for not being able to afford a super condo? Where did you come to such a conclusion? Are you high or something? haha.I am just saying that if you can't afford a condo you should look for something within your affordability range. If your budget is RM700K than find something within that range. If insist on a bungalow for that price than go somewhere else in mainland or balik pulau. I am sure you will be able to find big houses there at an affordable price. Not everyone can live the American Dream. There must be rich and poor people. Facts of live. Sorry the truth hurts. I don't plan on sugar coating my words because it is best to be direct with you so that you fully understand our social system.
Purchasing power is country specific. A Singapore dollar can buy 2.5 times more in Malaysia. So i believe you are trying to point out that a working class Penangite that earns RM4K wouldn't be able to afford a RM1 million dollar home in a prime location. My answer to you would be yes you are right. So perhaps he can consider an apartment of 800sft in a prime location or he can opt for a terrace house in Balik Pulau or he can also opt for a Mansion bungalow at Jawi.
my reply:
See. This is why I mention "Penangites fault for not being able to afford a super condo". From your word, it already indicate that very clearly. In a more ugly word is super condo are not for you penangites. What you mention is similiar to a company that is performing so good but except their employee to get pay cut. Unable to affort a normal house is nothing different from having a pay cut to all working class! How many family can affort 700k houses? I would like to highlight is its not too late to control the price because we ended up as misurable as HK or Sg ppl. Increase in house price is similiar as a double edge swords, first its good to have super condo (LGE hopes to attract more talent/rich ppl/foreigner) but note that the house price will hit back. Look at Singapore, what you guys see is Singapore are doing so good. But not until you dig out their condition. Singapore are not doing that well, their debt over GDP already hitting 117%! The real root cause are that Singapore are not doing good. The problem is property,why?Simple, because those debt are domestic debt(CPF). How do government give us interest for your epf? Its by investing. What if the Singapore CPF were used to create HDB? HDB are subsidize by Sg government! does this really create profit to provide interest to CPF? No! This goes the same as Pr1ma, there is no money coming from the sky(except you are a huge country with strong currency/foreign reverse such as US or China).
As conclusion, if it don't hit you now, it will hit your children in the future. I'm writing this with my heart and hopes that it can be stop before its too late.
Fine, I'm done with my coffee talk. And I do hope you don't get brainwash by those property talk. Just some 2 cent of my table topics from coffee shop. Cheers.
At the end of the day the decision to buy is still yours. You are the consumer that decides whether the price is justified or not. If you don't think it is justified than you shouldn't buy it and demand falls and price will follow.
What the government has been intervening with the property market is to slow it down by controlling speculation through loan to income ratio, RPGT for properties sold less than 5 years, foreigners can only buy more than RM1 million for condo and RM2 million for landed.
So all the interventions so far is actually benefiting you as a Penangite. The least you can do is to be thankful for such regulations. From your side, you can probably tell all your friends not to buy Penang properties to dampen demand. So, my question to you is more than relevant, is anyone forcing you to buy or not? By right without all these restrictions it will go higher.
I don't think i mixed hot money and FDIs. FDIs are locked in for a period of time as for hot money is easily liquidated whenever the investors wants to skip town. That is why it is HOT. Parking in assets is not liquid. However, parking in property counters on the stock market is liquid. In times like these, where money printing is rampant. Anyone smart would park their money in both areas: assets or the stock market.
So apparently, your conclusion on PR1MA and GDP is obviously flawed. If you took some time to analyze your remark and than you would realized that the impact of PR1MA is insignificant.
Who is comparing apple and orange here? You claim that Malaysia's bubble will boom faster than China. Aren't you comparing Malaysia and China? I am in fact telling you not to compare Malaysia and China. I asked you do you know how much a 800sft apartment cost in HK? Indirectly telling you that you are comparing 2 different countries.
On your remarks on Jawi. It is funny that you don't realize despite the fact that construction raw materials are almost the same, land prices isn't. Penang is an island after all with limited amount of land to develop. So land prices here will certainly be higher than Jawi. Besides that, Jawi's mega bungalows used to cost only RM250K, now it is RM550K. Isn't that inflation as well? Hasn't the price gone up as well? You are comparing apple and orange here again.
I don't get your final reply.
My ans:
It makes no sense. I read through it 4 times and i still don't understand why are you talking about super condos and how LGE is trying to attract foreigners and talents with super condos???? How are all these even relevant or make sense at all?
Than you go on and talk about CPF and EPF.You talked about company performing well but employees gets a pay cut???? LOL your analogy amuses me. Than you go on and talk about currencies of US and China being stronger. Btw, USD is not strong. They have been printing money. It will continue to devalue with time. Anyways,how is that a reply to my statement? How is it relevant? How did you even jump into the topic of Singapore is not doing good because of its properties? How is that even relevant? Singapore has done exceptionally well without any natural resources. If it doesn't empower its assets and people. What else does it have to offer to the world?
My statement earlier was this:
I am just saying that if you can't afford a super condo you should look for something within your affordability range. If your budget is RM700K than find something within that range. If insist on a bungalow for that price than go somewhere else in mainland or balik pulau. I am sure you will be able to find big houses there at an affordable price. Not everyone can live the American Dream. There must be rich and poor people. Facts of live. Sorry the truth hurts. I don't plan on sugar coating my words because it is best to be direct with you so that you fully understand our social system.
I know of many Penangites whom can afford super condos. I don't understand why you are claiming that it is Penangites fault for not being to afford a super condo.
I do agree with you that inflated assets is like a double edged sword. Perhaps we want a Penang that is less developed. Perhaps it is better the way it was last time. However, not everyone have the same vision like you or me. The only way forward is to progress and it comes with a price of course. Prices in Penang is still affordable, it all depends on the location that's all. Across the bridge everything is so much more affordable. Inflation is just not here in Penang. It is around the world. It is in KL,Johor,Malacca etc.
I do agree that property prices shouldn't go up further since it has already gone up so much in the past 4 years.
If i am not wrong, the average price for properties in Penang would be around RM500/sft.
Unless you choose prime locations than it can be as high as RM1500/sft give and take.
Hello saudara saudari, it,s new year 2013 bro... Why not u guys just sit back a reflects on one self rather than bashing each other with your ideology... :). Cheers.
Happy new years to all....
Hi CK,
Happy 2013 to you too. I just want to highlight the issue is facing in Malaysia, especially on government capital control and policy control. I would like to get a chance to drop an email to the government which I not sure whatever will they listen to me.
Hi Jeremy Tan,
Thanks for taking the times trying to understand my concern.
Here is my reply:
Reply 1:
It makes no sense. I read through it 4 times and i still don't understand why are you talking about super condos and how LGE is trying to attract foreigners and talents with super condos???? How are all these even relevant or make sense at all?
my reply:
Building high end condo and promoting Penang as a cheap alternative is a way to attract rich folks like MM2H owners to come stay in Penang to spark the spending which are similar concept like what is happening in Batu Ferringi etc. This was done by Singapore government to attract rich forks from China, in another way hoping those guy can bring income to the states. But note that, by keep on building super condo without considering the the most basic concept of increasing the income of Malaysian is a huge impact on Malaysian when the salary and the market wasn't matching at all. First is there must be an local real demand which mean the real afforability demand from the local, then only you can expand. Which is similiar to having FTZ then only started penang bridge, job first before added the supporting goods. House are just a basic medium for stay, if there is no job or salary that can support it. That house is just an white elephant.
Reply2:
Than you go on and talk about CPF and EPF.You talked about company performing well but employees gets a pay cut???? LOL your analogy amuses me. Than you go on and talk about currencies of US and China being stronger. Btw, USD is not strong. They have been printing money. It will continue to devalue with time. Anyways,how is that a reply to my statement? How is it relevant? How did you even jump into the topic of Singapore is not doing good because of its properties? How is that even relevant? Singapore has done exceptionally well without any natural resources. If it doesn't empower its assets and people. What else does it have to offer to the world?
my reply:
Looks like you don't understand my point, what I would like to highlight here is even Singapore can attract talent to their place. The property price and the demand for a basic house has spark to Singapore government to come out HDB housing, but again I would like to highlight is even with the strong GDP generation from the Singapore states, it was not able to keep up with the cost impose on the HDB project, which ended up Singapore government have to bear the extra cost of that project which caused the CPF wasn't increase as per the interest promise to their people. I not quite clear about the interest rate promise to their ppl, but CPF was use in developing non profitable HDB which the allocation of the CPF fund has been use up on non profitable section. This will led to lost of the chance to invest it in other place. and the interest leverage up, in long run for what I want to highlight is one day Singapore government will not able to repay all the CPF they collected and might went bankcrupt. And note that Singapore is a small nation, unlike US which has strong demand over their USD globally. So this makes they have a easier time to print any money they like. But in another few more year it will lost its value when global drop the dollarization system. While for China, they also can print all they want because they have the cheap labor, natural material and process technology.
Reply3:
I know of many Penangites whom can afford super condos. I don't understand why you are claiming that it is Penangites fault for not being to afford a super condo.
my reply:
If you said you know many Penangites whom can afford super condos. At the same time, I could said I know of huge number Penangites who giveup getting house because they simply can afford it, big number where stay with their parents or on rented and have no long term plan to stay in Penang because of the Price. And at the same time, I could see a small number who can affort super condos because of their rich/high incme background. Its just the people you exponse are different from mine, but first you have to stand on the ground instead of still keeping yourself in the same circle.
Reply4:
I do agree with you that inflated assets is like a double edged sword. Perhaps we want a Penang that is less developed. Perhaps it is better the way it was last time. However, not everyone have the same vision like you or me. The only way forward is to progress and it comes with a price of course. Prices in Penang is still affordable, it all depends on the location that's all. Across the bridge everything is so much more affordable. Inflation is just not here in Penang. It is around the world. It is in KL,Johor,Malacca etc.
my reply:
Please refer to my rely1. With add on, Malaysia has to stop exporting low cost/raw material. This will kill all of us in long run, China has started to move to higher ground while we are still fall behind. We are still depends on Singapore, Korea, China, Japan for all our export. And our currency has to always lower than them in order to sell our goods. We have to fight with the grow of other low cost nation such as Indonesia, Vietnam. If you want cheap cost there are a lot out there ready to take over Malaysia. Simply building more super condo won't bring Malaysia into a high ground, Malaysia are behind too much in processing technology and R&D. More super condo will drive more talent to leave Malaysia to get better pay in other country in order to buy a house in Malaysia.
Thanks for your prompt reply Steven. Appreciate that.
Foreign ownership only stands at 8% at most. Stats from MM2H.
Super condos are all located in prime location along the stretch of Jalan sultan Ahmad shah,Gurney Drive, Tg Tokong and Tg Bungah. Most of it were built more than 5 years ago. I don't think nowadays you will see much of new projects consisting of super condos.
I believe the number of medium cost condos surpass the amount of super condos by at least 2 folds.
Balik Pulau, Sg ara, Sg dua, Teluk Kimbar, Farlim, Ayer Hitam, Gelugor etc
No one said anything about super condos bringing Malaysia into higher grounds.
I feel that you have all your facts confused in a way.
Only by empowering the people through proper education in hopes that they will have the expertise to attract money into the country is the only way to empower Penang.
I understand your dilemma for inflated property prices but i can't agree with your point of view on why are properties prices inflated due to super condos and etc that you have just mentioned since foreign ownership stands at only 8%.
Again do you think it is cheaper in vietnam and indonesia? Inflation is global. We have a global growing population that consumes endlessly.
My advise is to buy something within your budget. I believe there are many properties out there that starts from around RM400K. Location wise you would have to compromise.
First and foremost, let me wish everyone a Happy 2013 New Year.
Just when I thought I had a very long list of new year's resolutions this year, it's really nothing compared to what you guys have written here...:)
Going back to the original title of the article "Only the rich can afford Penang homes".
Well.....on second thoughts, maybe we will just stop debating about QE3, hot money, speculation etc....and just pray that we won't have a similar land erosion incident like the one in Setiawangsa on Penang's many hill slope developments over the last few years.
Setiawangsa hill is red earth, penang hill is all lime stone, how can you compare that?
i remember that one time where he compared the mini aftershock we had to the earthquake in Sumatera.