Penang Housing Dilemma

7/28/2019 Penang Housing Dilemma

1/8

Introduction

Penang housing issues has always been highly debated topic among Penangnites

which due to the housing property boom that causes the shortage of affordable

housing. The report aimed to investigate the issue through study on statistics and

interviews on the affected group of people.

The Affordability Issue

The initial belief by the public for the high housing price was widely on the shortage

of land, increasing population and rise of construction costs. However a further

analysis revealed that this happened despite of an oversupply of housing on the

island. The number of houses provided in Penang consistently exceeds the number

of households in the past 13 years according to the studies done by Stuart

MacDonald from Penang Institute.

This shows the imbalance of supply and demand in housing which pumps up the

housing price despite an oversupply, mainly due to property speculation on luxury

housing by investors within and outside Penang. According to Stuart, average house

prices in Penang have increased 50% in the last five years, with even bigger rises

seen on the island, particularly in the islands north-east region where the average

condominium is now RM450,000, 82% higher than five years ago.


2/8

Based on the study of the statistics above, most of the property overhang happens at

the north-east region where the price of houses is also among the highest, further

revealing the element of speculation as the main cause behind the issue.


3/8

The Reason behind Speculation

This phenomenon happened due to the success of Penang itself as a progressing

city and thriving tourist destination where Penang has been ranked 7th most livable

city in the world, along with the UNESCO World Heritage status of Georgetown since

2008. This inevitably increase the appeal of Penang as a place to live and work

which drives the appreciation of land value that draws the interest of investors to reap

benefit from the high rate of property appreciation.


4/8

The first picture taken from a property website shows that most of the built units are

unoccupied, or even sold. (example: The Oasis at Gelugor with 471 units for sale and

64 for rent)

to make things worse, with globalisation of housing market, an Australia or China

investor can own a property in Malaysia easily through MM2H (malaysia my 2nd

home program) where the developers offer MM2H application services in their sales

package.

According to citizens journalist Anilnetto, its not as if all these high-rise units are

fully occupied. Take a look at night at any new high-rise condo building and see how

many units are lit indicating that they are actually occupied. To prove his point, we

have studied several high rise apartments at night to check the level of occupancy of

the buildings. To prove his point, we have studied several high rise apartments at

night to check the level of occupancy of the buildings.


5/8

The Implications

The distorted housing supply and demand meant most of the general public are

unable to own affordable housing, are forced to rent or purchase houses with loans

than might cost two generations to clear. When investment prevails over real home

ownership, this will explain the phenomena of fully sold out apartments which are

occupied below 50%.

Investors, who ride on the housing boom and bust cycles, invest on houses to reap

benefit from value appreciation of the purchased unit or units, which they will

eventually sell to another investor or real buyers who suffer on the high price.

Landed luxury properties at Tanjung Tokong by E&O and low cost housing at Relau

Though low cost housings are provided to low income group, they are located on non

strategic locations which are far from residents workplace. Most of those housing are

badly designed where residents are forced to live in indecent environment with poor

ventilation and daylight. This raised a question of social justice which is raised by

Datuk Dr. Toh Kin Woon, chair of the Centre of Economics, Penang Institue.

Many low cost houses tend to be built in undesirable areas, and connectivity to

schools, public transport and gardens is not considered important. Its as if we are

telling people, you are poor, these things dont matter to you.


6/8

Developers, while keeping business as usual, are keen on looking for remaining land

that can be developed. This causes more hillside development which some violated

the rules of no development on Class IV slope. The development on hill slope area

causes flood on hill area affecting neighbouring houses, shown in Tanjung Bunga

where the hill cut has altered the natural flow of rainwater.

More informal settlements are evicted for development due to their strategic locations,

meaning that residents who have been living there for generations will lose their

home once development approval has been given.

Photo shows the eviction of Kampung Tanjung Tokong, and Batu Uban


7/8

Based on our interview on the residents at the remaining Malay settlement at Batu

Uban where adjacent lands were earmarked for development of apartments, which

houses are demolished and residents evicted though compensations were paid to

them. The land in this area was previously a Malay Reserve Land where residents

been living here for generations, before it was sold to developers without the

knowledge of local residents. Looking at the current scenario, the local residents are

helpless, and frustrated.

Interview with local residents at the remaining Malay settlement in Batu Uban

They were able to self-sustain themselves by farming on the adjacent land which is

now the site of The View condominium. Even when they were compensated with

low cost hosing, those units are deemed to be unsuitable to the living culture of

Malays who have been adapted to low density environment with better quality of life.

The View condominium tower next to the kampung.

However, the developers are not the only ones who contributed to this problem. The

director of a local developer noted that, ultimately developers are allowed to build

their projects only after council approval so we cannot lay the blame wholly on the

developers.


8/8

Conclusion

Based on the studies and interviews done, it is noted that more control on

development is needed from the authority who is supposed to safeguard the interests

of citizens to avoid their basic rights to live in decent environment abused by the free

market development.

On regional planning, more focus should be given to develop the other parts of

Northern Region in order to ease the development pressure in Penang. Developers

on the other hand, should invest more on social-conscious developments which

benefit the general public while gaining profit from the development.

Documents

Penang Housing Dilemma