Penang Real Estate and Housing Developers Association (Rehda) chairman Datuk Jerry Chan said with land scarcity on the island, land prices have "hit the roof".
"Developers are being branded as greedy by some parties due to the escalating prices in property on the island, but land is not cheap here.
"Public housing should not be made the burden of the private sector and we have the right to make our business viable and our profit margins are not high.
"The state government does not privatise land out for developers and we have to buy at market rates.
"The Penang property market is open, transparent and vibrant but there is the problem of supply which is not enough to meet the huge demand for land," said Chan at a press conference.
Hence, Chan suggested the state government look into ways to address the matter.
"There is no much landbank left on the island and the only other option would be for the state government to allow more reclamation.
"Another option would be increase the density by revising the plot ratio in certain areas in addition to those which were revised recently.
"We welcome the revision but more areas should also be allowed to increase the plot ratio.
"What happened in the past is due to the restrictions on plot ratio and exorbitant land prices in place over the past 30 years, developers were handicapped and were forced to build super condos due to rising costs.
"We lost a lot of land due to this low density and low built-up condition that was imposed," Chan said.
The Penang Island Municipal Council (MPPP) in July revised the plot ratio guidelines for high rise properties on the island which allowed developers to build up to 87 units with a total built-up area of 122,000 sq ft per acre compared with 42,000 sq ft per acre previously but has imposed pricing conditions on the units.
Previously, the plot ratio guideline for high-rises on the island was 60 units per acre or 42,000 sq ft per acre.
The new plot ratio guidelines are not applicable for prime residential areas such as Jalan Tunku Abdul Rahman (popularly known as Ayer Rajah Road), the Jesselton area, existing established housing zones and general housing areas, the George Town Heritage Site (which includes the buffer zone), certain areas in Tanjung Bungah and Tanjung Tokong.
Chan said areas like Balik Pulau and Teluk Kumbar, most of which are zoned as agriculture land, should also be opened up for property development.
He 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.
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