PENANG AVERTS PROPERTY BUBBLE? FOREIGN PURCHASES OF PROPERTIES HAVE PLUNGED BY 50% – JAGDEEP

Purchase of properties by foreigners in Penang has declined by more than 50 percent since 2013, said state executive councillor on housing Jagdeep Singh Deo.

He said the state government acknowledged that foreigners have stronger purchasing power due to the depreciating ringgit.

“Bulk buying by them could possibly cause an unnatural increase in property prices in Penang due to speculative activity,” he conceded, in a statement today.

“With that in mind, Penang introduced several measures to control purchases of properties by foreigners,” Jagdeep noted.

He was referring to Penang Heritage Action Group which complained that one Singapore firm had bought 200 properties at the edge of George Town heritage site, along Jalan Bertam and Lebuh Noordin.

The company, despite not obtaining a planning permission from the Penang Island City Council yet, has issued eviction notices to 26 tenants on Jalan Bertam, and plans to build a 46-storey condominium along Jalan Noordin.

As the firm has yet to obtain approval for its plans, the tenants are yet to be promised compensation.

Jagdeep listed several measures Penang has implemented in its housing policy since ruling the state after the national polls in 2008.

From Jul 1, 2012, foreigners are only allowed to purchase landed properties costing not less than RM2 million on the island, and not less than RM1 million on the mainland.

For stratified properties (apartments), foreigners are not allowed to purchase properties costing less than RM1 million both on the island.


Meanwhile, the price cap for stratified properties which foreigners are allowed to purchase on the mainland was fixed at RM500,000.

Since April 2014, foreigners were subjected to an approval fee of three percent on top of the purchase price of the properties purchased by them.

Statistics from July 1, 2012 shows that these measures have indeed caused for purchases of properties by foreigner’s to reduce gradually until June, 2016.

“In any event, it should also be noted that the total numbers of purchases of properties by foreigners fell far short from the total number of purchases of properties in Penang,” Jagdeep said.

MKINI

.