The Reality of Affordable Housing in Penang
by Ken Lim
Housing affordability is a common issue not only in Malaysia, but also in many other countries such as Singapore, Hong Kong, China and Australia. Recently I have also read the latest news about India inviting Malaysian developer to build affordable homes in India.
In some developed countries like Japan and United Kingdom, the availability of affordable homes, usually within the proximity of transportation hubs and at the same time linked to job distribution, is severely reduced due to rapid regional urbanization and growing population density primarily focused in a particular area. Today, they are still dealing with the same issue as we progressed with time.
Malaysia is only getting off the starting block. As our young nation continues to evolve and grow, it is a matter of importance for us to address the housing needs due to the distinctive disparity in household income. Affordability issue will always exist yet if the right and effective strategy is implemented, the implication can be less severe than expected.
While both government and private sectors have formulated various plans to deliver affordable housing, it seems to me that the people are not as excited as they should be. I can confirm this from the level of engagement in PenangPropertyTalk.com. A RM800K condominium in Tanjong Tokong has attracted twice more traffic and Facebook sharing compared to a RM300K affordable housing project in Mount Erskine. News about Ikea coming to Batu Kawan had almost thrice the traffic and Facebook sharing compared to affordable housing plans within the vicinity of Batu Kawan.
One of the possible reasons could be due to the slower pace in terms of paradigm shift of the mentality of the people with respect to the idea of affordable housing in Malaysia. The general public perception of affordable homes is akin to aging dilapidated flat with little or no facilities at all. Many still harbour hopes that the government will be able to make the private homes more affordable, having the new private housing development to reduce their price within the range of 10-20% so that affordability is within grasp. But seriously, do you think that is a remote possibility?
Government and Bank Negara cooling measures are meant to control the housing price so that speculation activity would not reach an unhealthy level. However it is unlikely to reduce housing price to a great extent unless we are talking about an economy crisis where the stock market takes a plunge, many MNCs closing down, and a lot more people losing their hard earned jobs.
At this early stage, the introduction of affordable housing scheme is just not good enough. Instead of just waiting for people to accept it, a substantial effort should also be spent on marketing in order to bring the awareness to the people in a proactive manner. Today, affordable housing is targeting those professional workers with a monthly household income up to RM10,000 per month. They are not just looking for home with four concrete walls. It is a living solution that everyone is seeking. A place where they can stay in a comfortable manner, with primary basic amenities within close proximity that can serve their daily needs, particularly in getting to work as well as fulfilling the education needs of their children.
Financial institutions, developers and government can definitely work together to do much better by providing more affordable options, better first home ownership scheme and not to forget a stringent regulation to ensure the units are primarily meant for home owner ‘s occupation however not to derive profitability from rental yields.
For Penangites, it’s time for us to rethink all the possible affordable options available. There are also plenty of decent options available in the secondary market, which we should undertake to purchase before it gets out of our reach in the foreseeable future.
– Ken Lim
(Founder and Principal Reviewer, PenangPropertyTalk.com)
I have been following this forum a lot and also read a lot of the comments in many articles here.
In almost all cases, people seem to talk a lot about location , flooding, housing concept (G&G, clubhouse,etc) and price.
Not a single person talked about QUALITY. (except when the house is completed and cracks appear)
If we look at the brochures , it only say “cement bricks” or “red bricks”, Concrete, etc
Developers never mentioned the QUALITY of the materials used.
Is there a specific quality grade for bricks ? What about wiring quality ? How to check and audit? Plastic piping is good grade ?
When calculations are done for the structure , the lifetime expectancy is required. The longer the intended lifespan , the bigger/thicker the structure is
How long would a Penang house last before it needs overhauling ? what is the magic number ? 60 years ?
Agree with Ken and agree with @Penanglang too.
To summarize the general “mood” of penang properties in one paragraph, in my point of view after following this website for a long time:
The rich will speculate as long as profit can be made; The less fortunate wishes for property crash/price adjustment ignoring the fact that will require an economy melt down and joblessness; A lot honestly wanted that new shiny 600k condo, but only want to pay 400k for it, while ignoring thousands of listing in the secondary market because it’s old/small/less desirable/need to pay a lot to fix;
I’m pretty sure that unless you’re doing very well in sales, extremely skilled specialist that company pays a lot to hire, work 2 jobs for extra income, the average professionals working in Penang around the typical age of buying their first house will earn less than 10k a month. Problem is, penang attracts a lot of people from out of state to come work, and I’m sure many of them would not qualify for the affordable houses built here due to the voting requirements.
Penangites would argue that the Penang born should have first priority, I can’t and won’t deny that, but it’s kinda sad that non Penangites who work, live, contribute to Penang economy is getting the short end of the stick.
@Chris
What you said is not true. Even the rich are slowing down on speculation because it’s very difficult to make money at such price level. That explains the slow down in property transactions, both primary and secondary.
If you earn RM9900 a month, you can surely afford that RM600k condo. But there’s simply more homes than what genuine owner occupiers need, so there are 2 problems in the market now, (1) overpriced (2) oversupply.
And if you’re from other state working in Penang, just make sure your company in Penang pays you enough to afford that shinny condo, otherwise don’t come here, just stay in your home town.
But the fact is, most people from neighbouring states working in Penang are actually not choosy about their living conditions. Afterall, they’re from kedah/perak/perlis, they have low expectations in terms of housing quality. So should be no issue with the current state policy.
Anyways, welcome to Penang, the land of never ending traffic lights and speed bumps.
@vanilla
Haha! touche.
I’m sure you’re right as well as my view is surely affected by my own opinion which is unavoidable.
However, I think “they have low expectations in term of housing quality” isn’t very accurate though. I would say “different” expectation rather than lower expectation. I’m from further away than “neighbouring” states, I do not balik kampung every week/month, so I consider this my 2nd home and thus expect comfy, but not luxurious life. My house would have worth over a million here, but sadly my skills were not appreciated back home.
It’s also true that I do not have Penangites mindset, sometime I’m puzzled when my colleagues told me a certain place is great because there’s hawker/market/school nearby. Maybe I grew up in the suburbs, where I find places like Minden Heights to be a perfect place to live but everyone gave me weird looks saying it’s expensive (true) and need to drive to get to everywhere (which is normal for me anyway).
I traded potholes for speed bumps, rain for sunshine, endless suburb for hills and beaches. No regrets yet!
Typical local Penangites has difference from others, majority of them used to prefer stay in north of Penang Island, maybe because they have been used to that and stay long in local. nevertheless, there is no right and wrong, it is based on individual.
In fact, I am pure local Penangites too, : ) and used to travel a lot, I am ok to stay everywhere as long as within Island. To me, Penang island is just a small island about 268km approximately, : ) and is a nice place to live, work and for retirement. my view.
Welcome to Penang.