While the Penang state government decides on a proposal to raise the current density of 87 units per acre, market stakeholders are already hailing it as a necessary step to accommodate more affordable housing in the state.
The Penang property market is one of the priciest in the country, particularly on the island where a large portion of demand in concentrated.
The proposal by the state government is to revise the existing density guidelines to 128 units per acre, thereby promoting a scenario where developers will build smaller units that can be priced at a less prohibitive level.
Penang State Exco for Housing and Town & Country Planning Jagdeep Singh Deo explained that a series of meetings have already been conducted with various stakeholders and the consensus is that the guideline change will be positive and timely as many developers are already facing difficulties in selling large units that are deemed unaffordable.
He said that the decision making process is in its final stages and an announcement will be made in the near future.
Jagdeep added that the proposed revision will also take into consideration the affordable housing component of projects for developers that come under this guideline.
The current policy of 87 units per acre comes with the requirement that developers must also ensure that 5 per cent of the units at their project is priced at RM200,000, while 15 per cent is priced at RM300,000 and another 5 per cent is priced at RM400,000.
The new proposed density regulations of 128 units per acre suggests that 5 per cent of the units be priced at RM200,000 and another 20 per cent priced at RM300,000.
Ironically, the high pricing of properties in Penang has only marginally impacted the growth of the state’s property market, which continues to perform better than most markets in the country.
Recent statistics show a 15.67 per cent quarter-on-quarter increase in property transactions. There were 3,110 transacted units (worth RM1,21 billion) in the first quarter of the year. In the second quarter, transacted units increased to 3,597 (valued at RM1.44 billion).
Jagdeep said the unit price index 227.5 for all houses in Malaysia, while for Penang it was 262.2. The higher unit price index recorded for the state shows that the average mean housing price in Penang is still on the rise.
The statistics, he said, shows that for investment or home ownership remains a highly desirable option for buyers, and this is a positive sign for developers that are active in Penang.