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Penang: Prices up 8.6%, Income up 5.4%.

In his speech during the Malaysia Property Exhibition (Mapex) 2015, the chairman of the Real Estate and Housing Developers’ Association Malaysia (REHDA Penang) Datuk Jerry Chan Lim revealed that the house prices in Penang have been increasing by 8.6 percent annually while the average household income has increased by 5.4%. This meant that the gap between what one can afford has become larger over the years. As for the actual house price index, it has showed that the Penang house price has doubled since 2003. While I agree that the average household income in percentage for the majority has not kept up with the average prices, I have to say that from 2003 till today, for the engineers or even accountants who were in the right disciplines and roles, they would have more than easily doubled their pay too.  That explains why some of the more higher end properties in Penang were also snapped up in the years beginning 2009. This does not happen today because the prices has finally reached a stage where a breather is needed.
With regards to the gap between the average property prices versus the average household income, it is an important note for those who are thinking of buying a property in Penang. The affordability factor is becoming rather critical and this has caused the newer launches to be focussed more on price. The missing range of RM500,000 to RM600,000 are now the focus again. Anything higher meant that the location has better be the usual favourites. Sorry, mainland is nowhere near the top few favourites today. This is happening even amongst more famous developers. Yes, this is happening even for locations within the island. Read here: Penang affordable homes? RM300,000 – RM650,000 lah   As for the actual places as well as how to register or qualify for one, read here: Penang Affordable Homes: Where and How.
Of course REHDA is also asking the state to be more flexible in the review of residential property plot ratio guidelines. This will allow developers to have more units to divide the fixed costs with. In the end it would allow for more affordable units for the people of Penang. Do you want to know what are the available properties in Penang? Do drop by MAPEX Penang. It starts from 21st and ends on 24th Feb 2015.
written on 21 Feb 2015
Next suggested article: PLEASE be more lenient in development charges – REHDA Penang.

Property Investment always start with knowledge. Equip ourselves with more here.

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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0 Responses

  1. Penang Island always demand a higher house price compared to the mainland. I believe the property price over the mainland was rising partly are attributable by buyers from Penang who cannot afford a home in Island.

    1. Law, personally, the house prices in island vs mainland is both due to history and maturity. Historically, it’s more ‘classy’ to stay within island. Based on the existing creature comforts such as malls or even entertainment, island is still better than mainland. Of course, this may slowly change but the slowly is likely to be many more years ahead.

  2. Sometimes when I read figures being thrown about, such as from 2003: property prices have doubled whereas income has not caught up, I get nausea. We should not use just 2003 as the starting point of comparison. There are other starting points to study as well. What about 1997, 1990 or even 1986. So starting from different time-points could mean a different story. If one uses 1986, or 1990, a different story would emerge. It would show that property prices are only catching up with income after a long lull. So, it is unwise to, selectively, use a specific timeframe to suit our pre-conceived position.
    Wrong interpretation of numbers would lead to wrong or bad policies being implemented.

    1. Haha. Frederick, it’s always based on what the other party wants to put across. Then, the points used are to support what they wanted to put across.

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