Penang property prices soar

Penang property prices soar

PETALING JAYA, Malaysia - Property prices have shot up by about three-fold in Penang because of an increase in surcharges imposed by the Pakatan Rakyat-led government, claimed a former council official.

According to former Penang Municipal Council's Town Planning Department acting director Khoo Boo Soon, the additional cost imposed on developers were eventually passed on to buyers, hence the drastic increase in property prices.

They include the increases in infrastructure contribution and re-zoning fees, and contribution of RM120,000 (S$47,664) per unit in lieu of building low-cost homes.

The infrastructure contribution charge has been increased from RM5 per sq ft to RM15 each for housing projects exceeding 15 units per acre.

For commercial projects, the infrastructure contribution is increased from RM7 to RM21 per sq ft for every unit.

The re-zoning fee had been increased from 25 per cent to 50 per cent on the difference based on the current value, he said.

"The fee is imposed by the council. But the state government also charges the developer 50% on conversion of state-owned land.

"All these additional costs incurred by the developers are passed on to the house buyers," he told The Star.

Khoo said the lack of affordable homes had adversely affected the low and middle-income groups which made up more than 80% of the population.

"It is also difficult for the younger generation to own homes as the price range in Penang is beyond their means.

"What is the point of building more high-end homes when the majority of Penangites could not afford them?" he said.

"During the era of (former chief minister) Tan Sri Dr Koh Tsu Koon, the Government compelled the developers to build low and medium-cost homes.

"But the current government under (DAP's) Lim Guan Eng seems to be more interested in filling up the state coffers rather than meeting the needs of the people," said Khoo.

The Property Stock Report for the first quarter of this year showed that the house prices in Penang had far exceeded the 2014 price projected by Penang Institute's City, Urbanisation and Environment head Stuart MacDonald.

Valuation and Property Services Department data shows a drastic increase in residential property prices between the first quarter of last year and this year (see graphic).

In an immediate response, Penang Housing Committee chairman Chow Kon Yeow said he had forwarded the queries on surcharges to the Penang Municipal Council.

"The State Planning Committee can make such decisions, but ultimately it is the council that implements them," he said.

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