Penang island only for the rich?
Land prices are so high that the average working man’s hope of owning a house is fast fading.GEORGE TOWN: Owning a house on Penang island is fast becoming an impossible dream for the typical working class man, according to an official of the Malaysian Real Estate and Housing Developers Association.
Jerry Chan Fook Sing, who chairs the Penang chapter of the association, said land prices were rising so fast that it would be naive to expect the state government to build houses on the island that low-income earners could afford.
It would be more realistic to build such houses on the mainland part of the state, where land is far cheaper, the state-owned Buletin Mutiara quoted Chan as saying.
According to him, land on the island costs several hundred ringgit per square foot, whereas on the mainland—in Batu Kawan, for example—it is about RM10 per square foot even after the completion of earthworks.
Going by Chan’s assessment of the situation, it looks like landed property on the island will eventually be monopolised by the high-income group, which is predominantly Chinese. Such a scenario would be contrary to the socialist ideals of the ruling DAP.
Critics scoff at the DAP’s socialist claims, saying that it has been pursuing an ultra-capitalist development policy since taking power in the state in 2008.
They say it is precisely since the change of government that property prices have risen to outrageous levels.
Prices of low-cost and low-medium-cost flats have shot up from between RM70,000 and RM120,000 to between RM120,000 and RM200,000. Single-storey terrace houses were priced between RM200,000 and RM250,000 before 2008. They now fetch between RM500,000 and RM600,000. Double-storey terrace houses have leapt in price from below RM500,000 to nearly RM1 million.
Even in remote Balik Pulau, a landed house now costs more than RM500,000 to build, and the price is rapidly increasing. A similar situation prevails in other interior areas such as Batu Maung, Bayan Lepas and Teluk Kumbar.
New plot ratio
Barisan Nasional state information chief Loga Bala Mohan said the state government lacked the political will to provide affordable housing for low-income earners.
Over the past year, Lim Guan Eng’s government has been facing criticism from various quarters over the property price boom and the increasing development of high-density townships.
In September 2010, the island municipality (MPPP) revised the plot ratio guidelines for high-rise properties on the island to allow developers to construct a total of 122,000 square feet per acre. Previously, the limit was 42,000 square feet per acre. Critics said this was part of policy to help developers maximise their profits.
But Chan sees wisdom in the MPPP revision. “The new plot ratio guidelines will see the development of more affordable high-rise properties priced from RM200,000 to suit different ages and budgets,” he said.
In its reply to criticisms about the lack of affordable houses, the state government said those houses would be built in Batu Kawan.
Chan backs this idea. “In my opinion,” he said, “it is better that the state derive higher revenue from those prime lands that it owns on the island and use it to fund affordable homes in Batu Kawan.”
He also said that the higher revenue could help the state reclaim land on which to build cheap houses on the island.
But Loga disagreed, saying the previous state government had proven that it did not have to reclaim land to provide affordable homes for low-income earners.
He alleged that the DAP government’s lack of a policy on affordable housing was an “implicit ultimatum to local-born lower-income Penangites that they either live in cube-like homes in the air or shift out of the island altogether. Under Lim’s administration, landed properties on the island are only for the higher income locals and outsiders.”