Banks have been urged to relax conditions on loan applicants for low-cost, low medium-cost and affordable housing here.

Penang Housing, Town and Country Planning Committee chairman Jagdeep Singh Deo said the banks should not be unduly worried over default loans as “the security is already in the housing unit itself.”

“The argument that this group of applicants fall under the risky category clearly does not hold water.

“The state government and private sector have been working so hard to come up with affordable housing

“But if the applicants are denied loan, then all our efforts are in vain,” he said after a press brief-ing in Komtar on Fiabci – Penang International Property (PIP) Expo Roundtable Property Conference yesterday.

Describing the loan rejection rate for LC, LMC and afford-able housing in Penang as alarming, Jagdeep said there should be a preferential package for these buyers.

He said the rejection rate for LC and LMC applicants stood at about 70% and about 40% for affordable housing.

“A person applying for loan to buy an affordable house and another person who drives a Rolls-Royce and applies for loan to buy a mansion, should not be subjected to the same rule by the bank.

“This is unacceptable. We will look into ways to solve this issue after the Fiabci – PIP Roundtable Property Conference on August 7,” he said.

The conference, to be held at the Chapel Hall (St Jo’s Level 2) in Gurney Paragon Mall, is organised by the State Housing Committee jointly with Fiabci Penang chapter and PenEvents Sdn Bhd.

Jagdeep said the roundtable conference was exclusive to the ‘captains’ of the property sector, key industry players and principal public sector officials.

He said the forum would be limited to 40 pax comprising directors and chief executive officers of invited companies.

Among the key topics to be discussed are the implication of Goods and Services Tax, enforcement of the State Strata Management Act 2015 and the dilemma of rising loan rejections.

Source: TheStar.com.my

The state government has offered the bulk of the units at two affordable housing schemes on the island and in Batu Kawan to eligible first-time house buyers.

Penang Housing Committee chairman Jagdeep Singh Deo (pic)said the state government had offered all the 883 units priced at RM200,000 for the affordable project at Jalan S.P. Chelliah.

“As for the units priced at RM300,000, we have offered 165 units to eligible buyers.

“There are now 30 units left.

“We have also offered 275 units of those priced at RM400,000, leaving only 46 units,” he said.

On the affordable scheme in Bandar Cassia Phase 1 in Seberang Prai, Jagdeep said they had offered all the 98 units priced at RM168,000, and 273 units priced at RM220,000.

He said the state would be showcasing 22,512 affordable properties at the forthcoming Star Property Fair, organised by Star Media Group Bhd, to be held from July 9-12 at Gurney Plaza and G Hotel.

“Penangites should come to the fair in big numbers to register for affordable housing projects by the state and the private sector,” he said.

* Click HERE to see full list of affordable housing in Penang *

Some 43 developers from Penang, Kuala Lumpur and Johor will showcase new projects at the four-day fair.

Last year, over 30 developers participated in Star Property Fair 2014.

Eco World Development Group Bhd will take up the biggest exhibition booth this year.

The other big exhibitors are BSG Property (the development arm of Boon Siew Group), Iconic Development, and Ivory Properties Group.

Source: TheStar.com.my

Gelugor Heights, a residential development by Binwan Development Sdn. Bhd. at Tasek Gelugor, northern Seberang Perai. It is located along Jalan Gelugor, about 30 minutes drive to Penang bridge. This development comprises 38 units of 2-storey semi-detached and 2 units of bungalow houses.

Project Name : Gelugor Heights
Location : Tasek Gelugor, Penang
Property Type : 2-Storey Semi-D & Bungalow
Tenure : Freehold
Total Units : 40
Indicative Price: RM 530,000 onwards
Developer : Binwan Development Sdn. Bhd.

Location Map:

Penang property developers see a glut swelling in the affordable segment, which has about RM7bil worth of mid-range properties planned to date.

These 34,608 units, targeted exclusively at the first-time home ownership market with prices ranging between RM200,000 and RM400,000, will enter the property market over the next three to four years.

Some 15% of the 34,608 units are in the RM200,000-RM300,000 range, while the rest are at the RM300,000-RM400,000 range.

The state government’s income eligibility limit of RM8,000 for a RM300,000 unit and RM10,000 for a RM400,000 unit is slowing the take-up rate of affordable properties, according to the Real Estate & Housing Developers’ Association (Rehda Penang).

“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, because they cannot get a bank loan, and because they do not live in Penang.

“So what happens if the eligible buyers endorsed by the state government fail to qualify for the necessary bank loans?

“There will be an oversupply of affordable properties, resulting in such projects being abandoned or not taking off at all,” Rehda Penang chairman Datuk Jerry Chan told StarBiz.

He said a solution is to allow developers to sell the units in the free market to ‘unqualified buyers’.

“However, to curb speculation, the state government must require the ‘unqualified buyers’ to hold the properties for a specific period before they are allowed to sell it in the market,” Chan added.

Rehda deputy chief Datuk Toh Chin Leong said that if affordable properties were to enter the free market, the sale must be regulated to prevent another round of speculation that would impact secondary property sales.

“More than 30,000 new affordable units will enter the market in the next three to four years to compete with secondary properties,” Toh added.

Of the 34,608 units, some 20,950 are planned for the island, of which 830 ares to be built by the state government, and the remainder by the private sector, involving 12 developers.

The other 13,658 units are planned for Seberang Prai, concentrated largely in South Seberang Prai, Central Seberang Prai and North Seberang Prai.

Penang Institute fellow and urban studies head Stuart Macdonald said the affordable housing prices of RM300,000 to RM400,000 on the island was still too high for the average household with a yearly income of RM60,000, based on the 2012 Household Income Survey.

Macdonald said the price of an affordable unit should be between RM180,000 and RM240,000, three to four times of the average household yearly income, which is in accordance to the international benchmark pricing for an affordable housing unit.

Ideal Property Group executive chairman Datuk Alex Ooi said due to the rejection rate of bank loans hovering at 30% to 40%, the group finds it hard to sell the 4,840 units under the One Foresta and I-Santorini affordable schemes, priced between RM300,000 and RM400,000, launched recently.

“Over 90% of the buyers are in the late 20s or early 30s.

“Their gross household income, if they are married, hovers around RM6,000.

“If they take up a loan for 35 years, they have to service an interest payment of RM1,700 per month.

“With other commitments such as car loans, most of their salaries would go to servicing loans.

“The bank loan rejection rate for this income group is the highest,” Ooi said.

Ooi said the state government should revise those policies hindering the sales of affordable homes.

“There are first-time house buyers who qualify for bank loans, but because they stay in overseas or in another state, they are prevented from buying.

“The group has made plans to implement 10 projects with affordable components for the group’s 288 acres land bank on the island,” Ooi added.

Source: TheStar.com.my

by Charles Tan

Just a few years ago, there were hardly any billion Ringgit Gross Development Value (GDV) projects in Penang. These 2 years however, we are seeing more and more of these billion Ringgit GDV projects. I think one major reason is also because many KL developers are now moving into Penang. It does not make sense for them to move into Penang and develop only projects worth a few hundred millions right?

Latest news is that Titijaya Land Bhd has obtained shareholders’ approval to acquire about 23 acres of leasehold land in Batu Maung, Penang. It will be building a mixed-use development with a GDV of RM2.6 billion! Price to be paid for the land is RM126 million ONLY. This indicated a land cost versus GDV of only 5 percent!? I think those who love to buy property stocks may want to take a closer look when Titijaya has successfully launched the first phase of this project and earnings start to show.

This is a SOHO project. The development would offer about 1,700 units of these SOHO units over four blocks. there would also be retail components and four office towers! Actually, I do not find Penang attractive for these office units but perhaps it should be popular in future. Phase 1 would be launched either year-end or early next year and first phase would have a GDV of RM600 million. This is considered above average in terms of GDV for projects within the island.

Penang does not have that many SOHO projects when compared to the popularity of such units in Klang Valley. One major reason it is so popular in Klang Valley is also because of affordability; total price. Price per sf is considered high but many of these SOHO units offer an easy entry point since the price is likely to be sub RM400,000 anyway. It’s still way too early for Titijaya to announce the estimated selling price but I think it has to be very attractively priced in order to be successful. As at now, one bridge away,  RM400,000 can get a landed property in mainland. Many Penangites are definitely not used to these SOHO units yet. Happy anticipating.

>> This opinion article comes courtesy of my friend, Charles, the founder of kopiandproperty.com. He is popular for sharing his thought on property investment mostly based on his own 12 years experience as well as from all the readings and conversations with property gurus in the industry. (Source)