High cost of land in Penang is the main reason


The Real Estate and Housing Developers' Association (Rehda) of Penang is claiming that the high cost of land is the main reason for houses being sold at high prices in the state.

Its chairman, Datuk Jerry Chan Fook Sing, said the high cost of land was also the reason for developers' inclination towards building upmarket homes in the state.

The limited land in Penang Island has caused landowners to sell their land at very high prices and this directly impacts the price of houses, he said.

"When the land is bought for a high price, developers are forced to sell the houses at a high price as well.

"Therefore it is not fair when only the developers are blamed in this matter," he told reporters in George Town yesterday.

To ensure affordable housing prices for all levels of society in the state, the government would have to find a suitable mechanism to overcome the problem, he said.

A recent report quoted Senior Fellow at the Social, Economic and Environment Institute (Seri) Dr Michael Lim Mah Hui as saying that the average price of a house in Penang was RM540,000 last year.

The report also said the price of house in the state exceeded that of the average house price in Kuala Lumpur at RM390,000. - By Business Times

13 comments

December 10, 2010 at 10:16 AMLike

What is this guy talking about..(crap)?????

A developer acquired the 61-acre freehold site in Batu Ferringhi for RM157.3mil cash or about RM59.17 psf

The semi-detached units, with built-up of 3,000 sq ft, is priced from RM1.4mil onwards, while the bungalow homes, with built-up of 4,200 sq ft, is priced from RM2.2mil.

There will also be condominiums with built-up areas of between 850 sq ft and 1,800 sq ft, priced tentatively from RM480 psf....

Guys...factor in your construction cost per sqft and see how much margin they make..

 
December 10, 2010 at 11:14 AMDavid

I agree with Like.
That's their lame reason for jacking up the price.

 
December 10, 2010 at 11:26 AMNgoh

Like,

There are always 2 party in this issue. The people who is making hugh profit from property market is always saying "this is normal, not our fault, inflation, bla bla bla.." those kind of crap talks. I had not seen a single ppl from these party stood up and saying the opposite way...

 
December 10, 2010 at 11:45 AMkeong16

total agree LIke comment,all the developer now is all super rich guy ,i know some developer boss rich like anytime got cash hundred millon dollar at bank acc,if u got any friend work at banker line will know they earn so much,,,

 
December 10, 2010 at 1:55 PMTim

For high rise condo, if there are 25 levels, then the land cost of RM400/ft is divided by 25. It means the land cost is RM16/ft.

Why all these experts come out to claims that no bubble so frequently in the last few months?

I believe they have some vested interests.

 
December 10, 2010 at 1:56 PMTim

For listed company, you can check the annual report on how much the company earns and the dirrector fees.

 
December 10, 2010 at 2:02 PMsan

A lot of the investors/speculators already in Cannot Sell Cannot Rent stalemate.

Let us wait and see.

 
December 10, 2010 at 2:28 PMsokohaw

No matter what, the developers are still the winners as most of their project launched can be easily sold. Those get hurt are the speculators/investors. In Penang, the developers will never lose until people stop buying from them.....but can all of us do that at the same time? Obviously, the answer is no. A good example : Yesterday I walked into IJM sales galery to inquire about The Light collection I & II(the so called "crazy prize" projects in this region). Surprisingly they are selling like hot cakes, even with avg of RM750/sqft! I'm speechless......also regret why I didn't start construction business 20years ago.......

 
December 10, 2010 at 3:12 PMWK

The government should implement and enforce a price control mechanism on the new launches by developers to prevent unscrupulous developers from taking advantage of the shortage of decent accommodation ... the people are being held hostage

and also control the type of houses to be built eg build more medium-range apartments and restrict the number of luxurious condos .. to ensure they cater to the needs of the majority of the people

so far the government has failed miserably ... and bank negara Big Mama is still sleeping

or risk being booted out in the next GE13 ... !

 
December 10, 2010 at 3:34 PMPenang

I feel it was us ( Buyer or Investor ) who gave them the chance to " kill " us with this high cost selling price in Penang. Look around us , do we see any property that can be purchase by a normal exec level ?

 
December 10, 2010 at 3:47 PMadiey

agree with all u guys,all the developer can get lot of money from they project, but what to do?ppl still will buy their project because we can make our own profit from that rite..let say if we buy the house or apartment around 250k or 350k like IJM project...surely we can make a profit around 20-25% after completion rite....so..in this case...ya i agree that the prize in penang to high and should be control...but as for buyer...we also can get some profit from the project that we bought...any other opinion guys....please share...

 
December 10, 2010 at 4:44 PMChong

This Chairman is from Asas Dunia Bhd, they have many land in mainland but may say none in Penang island.
And most important is thier property and development in mainland also not perform well in recent years.
He only speak for the developer.
Definitely his statement was BIAS and not true in fact!

Good to see we Penangites are well awared of Penang property development, we are better than KL guy.

 
December 10, 2010 at 5:59 PMcas

Datuk Jerry Chan Fook Sing from Asas Dunia Sdn Bhd and Rehda, Just shut your mouth up!!

Where is your social responsibility? Earn so much already and still defending your groups of developers.

You are running away from social responsibility of affordable housing by giving lame reasons "because of constraints posed by government guidelines".

The real reason is because you cannot make huge profit from affordable housing, not because of government guidelines.

Still living in denial symptom, if the price is still out of control at one day it will sure burst, nature will take it's course.

Remember how the US housing developers were screaming there is no bubble in 2006/2007 and see what happen next?