Strong demand for affordable housing in Penang, says analyst

GEORGE TOWN (June 23): The demands for affordable housing priced between RM200,000 and RM400,000 remained high, so there is no danger of oversupply anytime in the future, said Raine & Horne International Zaki + Partners Sdn Bhd’s senior partner Michael Geh (pictured).

Responding to reports that there may be a glut in affordable homes, Geh said the thousands of people who have registered for such housing units shows otherwise.

“I find the affordable housing scheme by the state government a bright light of hope for youths wishing to buy their first homes,” he said in a recent press statement.

He added that while the Penang state government is on the right track with its affordable housing policy, it might want to relax its criteria for those who can apply for these units.

Geh said the demand for affordable housing is location sensitive where demand is higher for certain areas, such as Pulau Tikus, Tangjung Bungah, Tanjung Tokong and Bayan Lepas.

He added that it is not surprising if the demand for affordable housing in certain areas such as Alma, Kepala Batas and Balik Pulau is not as high due to their location.

Overall, however, he believed that there should be no worries about an oversupply of affordable housing in Penang. He opined that the market has to be carefully regulated.

“The state must never open it up to the market or else it will prompt speculation and spoil the whole affordable housing scheme,” Geh said.

He also reminded the state government to continue ensuring there are low-cost and low medium- cost units priced below RM300,000 for the lower income group, as a majority Malaysians can only afford houses costing below RM200,000.

“About 60% of urban Malaysians earn about RM5,000 and below, so they can only afford RM200,000 houses,” he noted.

Earlier this week, Penang's Real Estate & Housing Developers’ Association (Rehda) chairman Datuk Jerry Chan commented that there will be an oversupply of affordable properties in Penang due to the state government's restrictive criteria for affordable house buyers. Moreover, he added that there will be more than 30,000 new affordable units entering the market over the next three to four years that will compete with the secondary market.

“Prospective buyers are ineligible to buy because their salaries exceed the RM8,000 and RM10,000 gross household income limit. Many are also barred from buying because they already own a property, they cannot get a bank loan, and they do not live in Penang. There will be an oversupply of affordable properties, resulting in such projects being abandoned or not taking off at all,” Chan said.