The Penang government has agreed in principle that the 20% surcharge for affordable housing units sold in the northeast district will be reduced to 10%.

State Housing, Town and Country Planning Committee chairman Jagdeep Singh Deo told International Real Estate Federation (FIABCI) Penang branch members that this was to invigorate and stimulate developers’ sales in a damp market.

He also said the state was considering appeals by developers who build infrastructure such as roads and drains outside and away from their development site to be given a reduction in the amount of infrastructure contribution they were required to pay.

In his opening speech at the FIABCI Penang branch members night at Suffolk House on Monday, Jagdeep said the suggestion that the usual practice of Bank Guarantee being given by developers for various contributions and charges they had to pay be replaced with a Corporate Guarantee instead had been accepted and implemented.

“We are refining the various security conditions imposed by the state upon feedback received by the stakeholders and the changes are now being considered by the Legal Advisor’s Office.

“The issue should be resolved in the near future,” he said.

Jagdeep also noted that property transactions in Penang recorded in the last quarter of 2015 and the first quarter of this year were still high compared to transactions in Kuala Lumpur, Selangor and Johor.

He said that Penang experienced only a 16% decline in the number of transactions while Selangor, Johor and Kuala Lumpur recorded a decline of 17%, 20% and 24% respectively.

“This shows that Penangites are still keen on owning a home and clearly, this is a positive indicator for developers in the state,” said Jagdeep.

FIABCI Penang branch chairman Khor Siang Gin said developers would face increasing construction costs while home buyers would have difficulties in getting their bank loans approved during tough times.

“Therefore, FIABCI needs assistance and guidance from the authorities, including the local councils, state government and the Federal Government, to lessen the burden of all parties by reducing the quantum of charges.

“Such levies will be passed on to the home buyers and this will result in an increase of property prices.

“We hope the local government can reduce the development charges by 50% a year,” he said.

Khor added that FIABCI Penang had recently raised issues concerning affordable housing guidelines in Seberang Prai with the state government.

“The percentage of allocation for affordable housing in new housing projects in Seberang Prai was not standardised. It was between 30 and 60%.

“The state has decided to put on hold the existing guidelines for review and we hope the government will fix it at 25%,” he said.

Also present at the dinner were FIABCI Malaysia secretary-general Dr Yu Kee Su, vice-president Michael Geh, FIABCI Penang advisor Datuk Seri Khor Teng Tong, vice-chairman Datuk Alex Ooi and organising chairman Joyce Lee.

Source: TheStar.com.my