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Penang properties the most expensive

December 4th, 2010 Leave a comment

PRICES of properties on Penang island are the most expensive in Malaysia.

Socio-Economic and Environmental Research Institute (SERI) senior fellow Dr Michael Lim Mah Hui said the average house price last year was RM540,000 or eight times the average household income.

In comparison, the average house price in Kuala Lumpur was only RM390,000, or six times the average household income.

Lim said the average house price on the island has increased further this year.

A ratio of house price to household income of three to four times is internationally acceptable.

"If the situation persists, many Penangites, especially those in the middle and more so the lower classes, will not afford to own properties.

"The state government should address the issue before it gets worse," he told reporters in Georgetown on Thursday.

Lim said for a start, the authorities should stop encouraging construction of high-end properties that cater to foreigners.

He said data from the Malaysia's population and housing census indicated that there was a property glut, which suggests that many people bought property for speculative and investment purposes, thus pushing up the prices further.

In 2000, the vacancy rate in Malaysia was 15.6 per cent from the total of 5.547 million unit of houses, which amounted to nearly 750,000 houses.

He said the percentage was more than 20 per cent now.

"It is not that we do not have the houses. There are. It is just that the houses now are way too expensive and beyond many people's means.

"That is why I say the authorities should stop encouraging the contruction of high-end and luxurious properties," he added.

Meanwhile, Consumers' Association of Penang president S.M. Mohamed Idris said to make housing afforable to ordinary Penangites, the government should start a public housing policy, which provides affordable housing, particularly in urban areas, to cater to those below a certain level of income.

He said a good example worth studying was the Singapore Housing Board model, where the government spearheaded the building of affordable housing for a majority of its citizens.

He added that alternatively, the government could consider doing this in partnership with the private sector. "In short, the government's priority should be to put the needs of the majority of the people ahead of other things," he added.

SOURCE: Business Times

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