Friday 20 December 2013

Penang New Housing Rules

Back in early December, Penang state government has announced a set of new housing rules to curb speculating activities in the state. The new rules will take effect from 1st of Febreuary 2014.

1. Public Housing

Low cost (up to RM42,000) and low-medium cost (up to RM72,500) homes cannot be sold within 10 years from S&P agreement date.

Comment: Good. Low cost homes will be hard to appreciate in value. No one will buy for investment.

2. Affordable Housing

Houses below RM400,000 in Penang island and below RM250,000 in mainland are categorized as affordable. They cannot be sold within 5 years from S&P agreement date.

Comment: Good. But newly launched affordable houses are not easy to find now. Old rundown properties in not so good location may be yes.

3. Purchase by non-citizens

Non-citizens can only purchase properties in Penang which are more than RM1mil and landed properties in island which are more than RM2mil. All purchases (excluding some exemptions) are subject to a 3% levy on the transacted price.

Comment: Sorry to poor or even middle-class non-citizens.

4. The 2% Levy

ALL properties (excluding public & affordable houses) purchased from 1st Feb 2014 onward and sold within 3 years from the S&P agreement date are subject to 2% levy.

Comment: Once properties with strata title are completed, it is almost 3 years since S&P signed. Just hold for a little longer. No one is going to pay the 2%.

       Quayside, foreigners' heaven?

Seriously, can we find new property launched at a price of below RM400k in island or below RM250k in mainland? I don't think that we can get one easily in the island, unless it is a studio 600 sf sold at RM600 psf. In the mainland, perhaps further north, south or east we can really find some landed affordable homes.

Asas Dunia has built a lot of affordable houses in Seberang Perai Selatan in the past, especially near Mahsing's recently acquired land. Since many major developers have come in, I don't think Asas Dunia will want to build anything below RM250,000 now.

       RM100k but at "ulu" place

Tambun Indah, who was previously claimed to build affordable houses, will not probably sell anything below RM350mil in its Pearl City from year 2014.

So, the new rules can protect low income earners and prevent some people from speculating in affordable properties. For the rich, it is business as usual.

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