Affordable housing remains key priority in Penang
Affordable housing remains a key priority for the Penang state government, which has embarked on 12 affordable housing projects in all five districts of the state, which will see some 22,512 units of affordable housing being delivered within the next 15 years.
Penang Chief Minister Lim Guan Eng (pictured) said that work has commenced for at least four out of the 12 projects in the pipeline.
“The first project, which is the first phase of Bandar Cassia at Batu Kawan is due to be completed by next year,” he told a roomful of property industry players during his keynote at the Fiabci-Penang International Property Conference 2015 today.
He added that the private sector has shown its support for the Penang state-initiated 100% affordable housing policy.
* Click here for a complete list of affordable housing in Penang *
“To date, some 12,606 units of affordable housing have been submitted to the authorities,” said Lim.
However, he said that there were some obstacles faced by the state government in its delivery of affordable housing to the people of Penang.
“For one, the issuance of Advertising Permits and Developer Licenses (APDL) both for projects by the state government and the private sector, which usually take only two weeks to process, have been put on hold indefinitely by the Federal government,” said Lim.
He added that out of the 48 applications for licenses made from August 2014, only 18 had been approved by the Ministry of Housing as at April this year.
“It is now August 2015, one year later, and I am certain that the number of pending applications would have increased. I am told by developers who have applied for their APDLs and who are waiting that they have in fact complied with all requirements, and as such there is no reason whatsoever for the ministry to withhold the issuance of their APDLs,” said Lim.
He added that another obstacle is the high loan rejection rates by commercial banks of loan applications by low cost, low-medium cost and affordable housing applicants.
“I have long advocated the reintroduction of the Developer Interest Bearing Scheme (DIBS) for first time home buyers, and will continue to call for the same in Parliament,” said Lim.
He added that commercial banks should also loosen their lending conditions to such applicants of low cost, low-medium cost and affordable housing as part of their corporate social responsibility to assist the realisation of many Penangites’ dream to own their first homes.
Penang state executive councillor for Housing and Town and Country Planning Jagdeep Singh Deo said the state may consider increasing the income cap for potential buyers of affordable housing units to reduce the rejection rates by banks.
Currently, the net household income cap is between RM6,000 to RM10,000 for affordable housing units ranged between RM200,000 to RM400,000 respectively.
“If we were to consider increasing it by 50% to RM9,000 to RM15,000, this may achieve the objective of reducing the high loan rejection rates, however, it does not achieve the state’s objective of assisting the lower and middle income groups,” he said during a roundtable discussion at the conference today.
He added that a compromise could be met by the introduction of a new and cheaper type of affordable housing in the range of about RM150,000 to cater to the low and middle-income group, with the income cap maintained at RM6,000 or lower.
Source: TheEdgeProperty.com
Instead of asking bank to loosen their lending conditions which is almost impossible, why not consider building more homes with lower price tag ie around $100-200k. Maybe the units will be smaller in size, very basic unit with no facilities. Then it won’t be a stretch to the 1st time buyers too. Besides having to pay monthly instalment, they would also need to pay monthly maintenance which can be around $150 to $250. Do consider this lower range type of units instead of trying to arm twist banking institutions which will never do a losing business because they have their shareholders to answer to.
I agree. Why home owners want to put themselves in a precarious situation. If banks cannot lend, it means their income is not able to support the instalment. So why State still want to push for this? It’ll end up with many auction sale and people losing their only home. Instead State should look into offering more lower priced houses with no facilities (so home owners can save on paying high maintenance). When these buyers can afford later, then upgrade loh. Purchasing home is not just one time event in our lifes. When we have the money next time we can upgrade.
* I also wish that banks can loan me to buy a landed property but my income can barely cover. If want, I know I can pay the instalment but banks want to have a buffer when lending. So of course reject my loan lar. Who doesn’t want a better house but we cannot force the bank to lend us. So accept it and buy a cheaper house.
There is already a RM100k – RM200k category. It’s called Medium Cost Flats/Apartments. Problem is nobody wants to build cause it is a sure lose money development. Imagine RM150K @ 700 sf. means psf. price would be RM214 only. Construction cost alone (not including land and anything else yet) will already cost an average of RM250 psf. Who want build? Government? Which government I would ask? State or Federal? If Federal … I doubt it cause we are an opposition state, wait long long. If state government, unlikely cause there is no funding as all our tax-payers money go to Federal. If build on mainland, buyers complain far away from convenience.