House scam to be probed, says Guan Eng

The Penang Government will probe allegations that employees of housing developers booked units in projects prior to their launch and sold them later at higher prices.

Chief Minister Lim Guan Eng said such complaints had come to his attention.

He said the state, through the Penang Housing Board to be gazetted on July 1, would study measures to curb such practices, which allegedly caused house prices to increase almost immediately after their launch.

Lim said the board would also introduce measures to safeguard the interest of Penangites who wanted to buy affordable homes.

He said other steps that would be studied included control of the sale of affordable homes in Penang to only first-time house buyers.

“This is to ensure that every eligible Penangite will have the opportunity to own a home,” he told a press conference here yesterday.

He was asked if the state planned to introduce measures to limit ownership of homes.

“When the Penang Housing Board is gazetted, our main aim will be to build affordable housing and priority will be given to Penangites and first-time buyers,” he said. - By The Star


May 18, 2011 at 6:12 PMPrestige

Probing only starts NOW? This has been a widespread employee benefit for Pg developer companies doing housing/commercial projects, for so many years! Put it crudely, some staff only hang around long enough to enjoy such "entitlement"

May 18, 2011 at 6:58 PMsad

You means all developers allows that geez. I thought most of them are credible. i must be naive believing them.

Well, sound like insider trading and speculating on prices. geez. It would be great if we know who are those who practice such an unethical practice.

May 18, 2011 at 9:11 PMcondomana

Dear Prestige,

Dr Koh has been sleeping on his job for the past so many years, and being pushed around by cronies. So what do you expect from him.

YB Lim is much more in touch with the ground. Having said that, we'll have to wait and see if precise policy & tough enforcement will be carried out. But at least he has the balls to set up the Housing Board and declare to the world that actions would be taken against these "cheats".

Dear sad,

You are very good at playing naive ah!..;)

May 18, 2011 at 9:59 PMsad

Hahaha,, I've been exposed playing naive. Bagi chance lah condomana.

So do those developers, cronies, and staffer. They will act don't know as well. Never too late, love to see what action will be taken.

May 18, 2011 at 11:17 PMPeople

Don't just announce the probe and then go to SLEEP (like those BN leaders) !!!

Keep us informed of the results of the probe and the actions taken !!

LGE, we are counting on you ... you are our last hope !

May 19, 2011 at 11:20 AMFREETHINKER

To my surprise this happen not only in small local developers but even those big fishes are doing that.
The recent “complot” is the Batu Maung Double Storey terrace where the directors/housing agents friends/internal/bankers cherry picked majority of the houses prior to the launch and left some chicken feet to the “selected” buyers. This is a public listed company based in Prai. So people like us being asked to register and being used as a tool for their survey only. From the response they set their pricing.

I am not a lawyer but supposed there is no law forbids them doing that. In USA this would subject to Anti-trust/ Insider trading etc laws.....but this is Malaysia la.

May 19, 2011 at 3:05 PMObserver

Agreed with Freethinker that I also registered to their web but the developer never contacted me. When I called up their office in April, they told me all the units were sold out for more than 700K/unit. This project only opened for sales in March. I did confirm with the office that my registered contact details are in their database
Same thing to another developer from prai where there projects in Seberang Jaya, the gated DST & DSSD behind carefour were all sold out in March before the actual launching except bumi lots. These purchaser can only sign the S&P probably in the coming June.
Most of the projects whether in Penang Island, Butterworth, Seberang Jaya, Prai or even Simpang Ampat are controlled by Developer. You can check it out yourselves what tactics they use to create panic buyer and the rush to buy eg opening up 2 rows for sales with limited choices to get the take up and then opening the next 2 rows with higher prices, therefore the price will be on the increase from the period of opening for sales until the project completion.
I am sure they are many frustrated genuine landed house buyer like me facing the same predicament. Hopefully the authorities concerned would pretend like a layman/buyer to investigate and do something so that the house price is reasonable for ordinary wage earner to own as a better house for own stay.

May 19, 2011 at 3:21 PMdim

i came across the project in relau - Oasis Residences.. their terrace house is sold out before launching year ago... heard that all are grab up by the developer's staffs/cronies/friends/relatives...

May 19, 2011 at 3:35 PMbeehui

ya, NEVER ever pre-register with the developer. they will only use it as a data collection method to determine the price level and to bargain with the large-volume investor. they won't call you up. it won't make any difference for you whether you register or not, except making you feeling like a fool, because later after the project launch and you call them up again, they will tell you that there are thousands of registered ppl and they could not call up everyone. so why bother to register?

if you are really keen on a particular project, take note of the launch date and follow up with them when the date is near....

May 19, 2011 at 3:55 PMScent

I don't think there will be any difference after the implementation for such policies.. those rich investor could just ask their relatives or even hire someone to buy the properties on their behalf first wat =.=

May 19, 2011 at 4:01 PMFREETHINKER

Some crazy 2cent ideas that just pop up my mind....

I think we need some kind of ISA (but can be prosecute in court type) for business.
Any businesses (let’s start with property) that act against general public interest/ malpractices and/or price manipulation can be prosecuted under law and its directors would be jail. Let’s see if they still dare to be that ludicrous!

May 20, 2011 at 12:28 AMProperty talk

What is wrong for the staffs to buy earlier or at a discounted price? Heard of Employee discount before? For a simple example, if you work in Dell, you can buy a PC at a discounted price. If you work for a developer, it is definitely good for the developer to provide the benefit for the employee to choose the unit and even have a 5% or 10% discount. Think about it. If you work for IJM, MahSing, E&O, SP Setia, etc etc, don't you want to have this kind of privilege. Even for friends and investors, nothing wrong for them to buy earlier. That is why it is important to start your connections and networkings.

Penang property is blossoming which is good for Penang. Always spend within your means. There are still a lot of options available even in downtown penang. Low cost flat, low/medium cost flat, west of Penang Island, Penang mainland.

To resolve this issue, more low cost and low/medium cost flat should be built at a designated area (prefer to be in west Penang island or mainland) and not scattered everywhere. Only allow people without a home and earning less RM4k to be eligible.

May 20, 2011 at 7:12 AMDr.

Property Talk,

If developers build more low/medium cost apartments, most units will be bought in bulk qty by richies and end up rented to foreign workers. Real home owners will live happily ever after with Bangla, indon, viets, multicultural environment. Should be nice.

May 20, 2011 at 11:30 AMObserver

Property Talk is a developer crony , hardcore speculator ... or a real IDIOT !!!

... think penang people stupid or what ? !

May 20, 2011 at 11:30 AMcondomana

Dear Property talk,

There is absolutely nothing wrong with employee benefits. And specifically for the DELL case you mentioned, I think it is a good scheme to encourage "employee brand loyalty". However, please take note that there's a big difference between "computers" vs "properties".

Now for Dell, by allowing employees to buy at discounts, it will not result in an "false impression" of demand because the total employee purchase is not more than 0.001% of their total computer production. Furthermore, computers are manufactured goods which have unlimited supply and the price is always stable if not getting cheaper by the year. Therefore, buyers will not feel "unfair or deprived" as the employee purchase scheme does not affect them.

Now properties. *sigh* I think I don't need to elaborate. Just go attend an IJM project launch (I am sure many of you have experienced that before), you will know what I want to say.

Again, exclusive "elite members only" product launching parties are common. But we're talking about a different thing here my friend, it's real estate, something that has a "finite" supply and it creates a sense of panic and unfairness when the people feel that the price is being manipulated in unscrupulous ways.

You are right when you say to make money, you need all the network and connection. But I guess a line has to be drawn to keep things in check. I hope Raj Rajaratnam (of Galleon Group fame) has given everyone a guide on what's good and what's bad for our society.

Don't get me wrong my friend, I love making money out of doing nothing. I made some pocket money in the last 2 years being in front of the property curve. I love making money by just signing S&Ps, those occasional visits to lawyers office, friendly chit-chats with the bankers who provide me the finance, and those leisure drives to construction sites to check out the progress. But let's sit down for a while, and consider the meaning of "productivity" when it comes to creating our personal wealth. Hmm....:)

May 20, 2011 at 12:01 PMProperty talk

Thank you Observer for your kind words but your judgement is very wrong. I am neither a developer crony nor hardcore speculator. Penang people is not stupid else I would not make a 7 figure within 6 years by just starting off with a RM100k investment as a Penangite.

I would categorize an observer as an idiot. Why is that so? If an observer keeps observing, nothing will happen. So stop observing. Let me give you some good tips on where you can gain a good capital appreciation in the next 5-10 years if you do not have a lot of cash. Go invest in Balik Pulau or at the coastline of Seberang Jaya. Make a wise decision and stop observing.

May 20, 2011 at 1:22 PMKS

i know who he is , Property Talk is one of the developers cronies (which he will deny)

he is always around exploiting the genuine buyers, the less privlege ... a blood sucking leech

May 20, 2011 at 2:04 PMproperty298

property talk ...i will just label you as a greedy selfish idiot!! Penang will have a better living place for the poor if we got less people like you....

May 20, 2011 at 4:21 PMHair

Developer is the biggest culprit, look at the gated project in Simpang Ampat. OC not obtained yet, probably by year end. The standard DST unit sold at around 238K initially and now at least 308K, standard DSSD unit at around 328K and now selling at least 443K. Within these 2 months, the price has increased twice for DSSD from 423K to 433K and then to 443K. Don’t just believe, check it out. If not because of the flies and bad smell due to the chicken farm nearby, probably would have increased faster than this. If this trend is to continue, the price might reach 500K when OC is obtained ? Who is the one in control / responsible for the house price inflated so fast in this case ?
It is high time the government/all relevant authorities should take actions to curb price increase unnecessary. How about Penang government is responsible for building houses in Penang only, those already have house or with IC address from other state or foreigner are not allowed to buy the government build houses. Otherwise they have to buy at a higher price say 10% or 20% higher, with 10 or 20%, it is still much cheaper than price inflated by the developer. The developer will have to bid for the tender in order to participate in the projects, of course, the lowest & most credible only will be selected. This way the cost will be brought down drastically since government is in control of all the related agencies eg land office, licensing, utilities office etc. The you will see all the speculator / house scammer throwing their units, otherwise their monies will be stucked for a long time with the increasing bank interest by BNM.
Another most effective way is to implement the property gain tax effectively so speculators, insider trading, investors will think twice and therefore genuine house buyer will get their share with the affordable price.
Property Talk, any donkeys will know you are not a genuine buyer, you are trying to make money out of those poorer than you. we are talking about pushing the house price unnecessary not about discount for staff. The discount for staff will not push the house price up, how many developer staff will really need to buy a house so often for stay. Many of them would be staying in their own house already. Your are just as making a stupid opinion hoping to encourage speculation in the property market just like the stupid deputy finance minister’s speculative statement, refer to the article “Inflation and demand to lift property prices 10%-20% this year” (The Star, dated Thursday April 21, 2011).

May 20, 2011 at 7:49 PMMS

In my opinion, government plays a very important role in curbing price increase due to too many speculators in the market. You cannot stop speculators completely due to the reason that this is an open market. Below are the suggestions :

1. Setting 70% cap in loan is not good enough, instead it should raise the property tax higher if someone sold it within 5 years. The current property tax is not high enough to deter speculators.

2. Set stringent loan application rule especially for those who owned more than 2 or more houses. For example,loan approval will be based on x% of their annual income. I have one friend who earns RM7K a month, he bought 3 houses which amounted to more than 2 million loans.

3. Bulk purchase plan. This is completely rubbish ! Extremely unfair to genuine prospect buyers. Government hold the responsibility to prevent this from happening.

May 20, 2011 at 9:18 PMObserver

That is not good enough as developer is the main culprit, the government should have special officers to closely monitor those irresponsible developer using technique to create a panic situation. You can easily identify them, such as
1) this developer just advertise in their web that it is now open for registration but when you call them or visit their sales office, they will tell you just register your name & contact first, the price is not finalised yet and will be known only few months later,

2) When they announced of any project, it is either fully booked and mostly booked with limited choices and higher price, or

3) They release for booking by one / two rows, usually those unpopular rows first, that also many been marked as reserved or sold, another 2 weeks, they will do the same thing with another rows but with higher price.

4) Developer that allows bulk purchase by one individual person / company. I heard few developers are doing this in Penang.
This irresponsible developers should not be given next project approval as this is within the authority's control.

Genuine buyers should use this opportunity to give feedback to our responsible Chief Minister LGE so that action can be taken against them.

We should not pity the developer could not sell their project or developer staff salary being cut, staff being retrenched when times are bad.

May 20, 2011 at 9:26 PMMS

Observer, bear in mind that we, and all of us cannot control over the developer, it is still the government (Minstry dept) who enforce their rules.

May 20, 2011 at 11:08 PMObserver

Agreed with you, what I mentioned above is for the government to take action against those developers. With government's intervention and implementation of high property gain tax, not many will dare to speculate. Property is very illiquid, not like share market, you still can sell in a falling market, as for property, the transaction will not be materialised by a click of the mouse.

Effective property gain tax may be: 50% tax if sold within 1st year, 40% within 2 years, 30% w 3 yr, 10% w 4 yr, 5% the fifth year. Then most buyers will be the genuine buyers

On second thought, thru internet, we can do something you know, we can create awareness and spread the true picture of this culprit, then everybody will start to pull their brakes and reverse the trend. Imagine the people of Penang can change the government, same thing we can change the faith of developer

May 20, 2011 at 11:28 PMProperty talk

Some of you guys are really great speculators but I am going to say it again for one last time in this topic; I am just an ordinary person who flows with the wave instead of going against the wave. You can keep cursing but if there is a correction in property price, it will not go down to the price 3 or 5 years ago but if it still goes up in the next 2-3 years, forget about the price that you are seeing today.

Good luck to some of you who keeps cursing and swearing. It is unhealthy and stressful for you. Start thinking rationally and plan either for your first home, upgrading home or for investment.

May 21, 2011 at 2:08 AMcondomana

Dear Property talk,

In your opinion, what do you think is causing the price increase? Do you think there is a single factor? Or multiple factors?

May 21, 2011 at 7:51 AMObserver

Dear Condomana

I like your comments, wish that there are more people like u in Penang as we create awareness. As u make money, u are considering others and the environment.

Dear Property Talk

Since u are following the wave and must be following for quite some time, I would like very much to hear your expert opinion and list down for us all the factors if your answer is multiple factors pertaining to question from Condomana.

To my opinion, there are multiple factors but 1 or 2 factors is/are the main contributing factor/s to price increase

May 21, 2011 at 11:19 AMProperty talk

Condomana: Mana-mana condo pun bagus. Do you know how is my tycoon friend, Mr. Tedd is doing? If you have forgotten about him, let me refresh you. Remember the guy who kept cursing his own investment (The Brezza) and keep complimenting the property (Fettes Residence) which he claimed that he did not invest. Anyway, my pick is still The Brezza (location, location and location even across the street) and my suspicion is he does not own The Brezza but Fettes Residence.

Very interesting question from you but I got to wear my bulletproof vest before answering your question as people will start shooting me. Anyway, joke aside. I seriously do not have a direct answer to your question but I believe there are many many factors that have contributed to the elevation of the property prices to this level though I have not been following the property development for sometime as I am in oversea for the last 16 months. Apology if I am not following the topic in this forum or your question but for me, the million dollar question is, will Penang property continue to be on the uptrend for the next few years or will there be a correction? My answer is simple. It is going to continue to rise at least for the next 5 years but at a slower rate with a range of 0%-10% (big gap as the property and location chosen is very important, so got to be smart in choosing your gem) in capital appreciation year over year. Let me point out some of the positive fundamentals.

1. Demand vs. Supply – Definitely demand is much greater than supply. Most of the time, I got negative response from the property agent as list below.

a. Property has been sold
b. The owner do not plan to sell anymore
c. The owner prefer to rent
d. Let me check and come back to you (80% of time, the agent never calls back as the unit is no longer available)
e. The price is not correct
f. Possible price benchmarking by owner

Don’t look at the artificial number on the newspapers or internet. Take note that you may see the same unit that has 20-30 agents that are trying to sell and advertise at multiple websites of the same unit. 1 unit may appear more than 100 times and don’t get the artificial impression that the occupancy rate is 30%-40% due to the number of units having the lights lit up. Some keep it as holiday home, some are travelling for holiday or business, some are working night shift, some are out for dinner, shopping, entertainment, etc and some may be in the room where the living room lights are not lit up.

2. Availability of big KL developers (E&O, IJM, Mahsing, SP Setia, Etc) that are providing luxury and best in class homes. There must be a reason why they are in Penang and all these giant companies have a better and further vision from ordinary people like me. I am riding the tsunami wave with them rather than against it.

3. Holiday homes (on an island and by the sea) – With the availability of ‘real’ luxury homes (example: Seri Tanjung Pinang, The Light Water Front), rich people with disposable income will buy as a holiday home. The Palm in Dubai, who are the owners? Mostly are foreigners.

4. House hold income for professional – A husband and wife with a 10 years experience should make a combine income of RM200k (can afford homes up to RM800k)

There are still many other factors that are contributing to the stability and appreciation of property prices in Penang Island. I will share more insight, potential good property and how to make money when I have more time provided the cursing stops else I would take that people do not agree with me and no point for me to share more.

Observer, Condomana and the rest, why not you share the factors that are contributing to the escalating of property prices in Penang. Then take a step back and think carefully whether it is supported by fundamentals. For me, if it is not supported by fundamentals, it would have crash 2-3 years ago during the subprime crisis in the States.

May 21, 2011 at 4:19 PMFREETHINKER

This is what we call “Pareto Analysis” in Statistics.

Target on the main contributors factors rather those smaller impact factors. Obviously no one would deny developers would be the first.

If taxes come into picture to control the buyers or developers then the tax must be localized by state or even by the district. So that the money can be used to develop public schools and amenities in that area. If not, there are many houses but no schools, clinics etc. For instance govt can consider windfall profit tax on developers.

We have been “systematically marginalized & manipulated” by developers (especially those big ones) over years due to the lack of systematic and transparent mechanism to buyers. Most of the things are hearsay, rumors and sentiments then buyers go and buy. Even there is report by govt agency is always post few months later. No real time or continuous update is very disadvantageous to potential buyers. We always here common words such as “many”, “limited units”, all those keys words that excite us. But what exactly the response we won’t know.

May 21, 2011 at 5:37 PMST

Even government leaders and ministers make irresponsible speculative statements like that Donald Duck fellow !

with the goverment & authorities turning a blind eye ,unwilling to rein in the escalating house prices, those rich and powerful people developers and their cohorts are going for the kill ... poor people become poorer , widening the gap ... until explode social chaos ? !

May 22, 2011 at 6:51 AMObserver

Dear ST
Not to worry, as those minister, rich and powerful people developers and their cohorts going for the kill, they also kill their own generations, there is no way they can gaurantee their next... or event their next generation will be rich and powerful forever.

May 22, 2011 at 7:44 AMObserver

Dear Property Talk
The demand now is highly supercifial, because the supply scenario is mismatched by the developers and those in control eg bulk buying, or taken up by all cronies for new projects. This scenario will create more speculation in the primary market as more people are trying to make money this way.

With the above scenario, it will automatically affect the subsale and second hand units. Thats why we get the nagative response from the agents as most people do not want to let go their units expecting the price is going up. As minister also making speculative statement, it has been known to everybody, the whole of penang is talking about making money from property. This is just like the scenario before the share market clash, where you could hear auties talking about making money from share wherever you went.

If I am holding a units or many units, what should I let go now, all the cronies, agents, speculators, house owner are waiting for the price to move up higher. Many of them with the 5/95 or 10/90 have no harm waiting since is not paying interest, even if they have started to pay interest, it is still worthwile to wait as the speculatiive price appreciation made by that minister is 10-20%, what is BLR-2.3 % mean to him.

The 5/95 or 10/90 offered to us come with a price, it will be much higher than their original profit margin in order to cover interest not paid by buyers, again pushing new house price higher.

Agreed with many people bought for holiday stay, but what is the percentage of this people compared to the population of Penang. Even developer anounced mostly taken up by foreigners, but you know in Penang, only certain blocks or projects only can be targeted for foreigners. The scenario will soon change when there is pressure for government to implement certain rules on foreigners in order to protect the local.

Now the property is very hot, therefore demand is artificially good. Now in everybody's mind is that buying property is to make money. Even those professional with good household income are buying extra for making money

Whatever that is happening, there is always a natural law that will balance up eventually.

May 30, 2011 at 11:19 PMObserver

Dear Property Talk

No doubt that there are many factors causing the house price to continuosly go up. Do you foresee the house price increase can be controlled by the government ?

June 8, 2011 at 8:04 PMObserver

Genuine buyers, just hold on to your buy, the high house prices are for the speculator not you.

Bad sign expecially highly priced condo, landed may not be so bad when there is a U turn. eg only a few units are occupied for a Condo fully sold in Kepong KL. Just look at the shoplots facing Butterworth,at in between The Spring & Summerplace near to Jelutong Express road, you see banners, 8 or 9 out 10 are for sale/to let.

This shows that the property market is full of investors and speculators. There are actually many readers in but you notice most of the comments are biased towards speculation. I did read before (now is removed), there were > 2 thounsands who watched the video clips just in 1 day posted on "Buyer wants explanation from the developer"

May be the genuine buyer/reader who reads this blog once a while, may not know how to put up a post comment.
All you need to create a google mail a/c.
Type your comments,
select comment as: Google Account
Click "Post Comment" button
Sign in your gmail ID & password
Click "Post comment"
type the word for "word verification"
Click "Post comment" again

My simple analysis:
What will happen to property demand if US economy is into another recession, US housing already in the double dip

There is not much gvernment intervention pending the election. If BN wins in the election, most likely many things will increase in price/high inflation, and therefore less disposable income, then people's priority will be on food & transportation to work and less priority for house upgrade or bigger house.

If PR controls Putrajaya, more control/rules on housing price and less conducive for speculation

Just look around on the ongoing projects, projects just launched without contruction yet. In 1 or 2 years time, there will be everybody selling and less people to buy, then you can pick n choose with much more lower price.

June 8, 2011 at 8:31 PMMickey

Dear All,

In short. I am the victim in this case. I just graduated recently from local U. What a shame that I couldn't own a house in Penang, even at seberang. The sky rocket price of house here made our life hard, even harder the coming few years.

Congratulate to all those who already own a house. You all should be happy with what you had.

Pity me.

From Mr. Truly Sad :(

June 8, 2011 at 11:22 PMObserver

You appear to be the loser now and will be the next winner. When there is a property crises, those speculators will suffer, you will be the winner with the panic selling. You have the chance as long you are preparing with the cash from now on.

June 9, 2011 at 1:28 PMMalignant

I love this topic. WHAT RUBBISH !!!

The current high price of property in Penang, 1st of all, isn't caused by crony investors or by staff taking units from Developers. EVEN if any development company wants to sell to crony investors or to their staff, it's is that company's every right to do so. That being said, i don't believe any company would do so. Why? IF you invested SO much money into the land, then waste so much time and resources to get your plans approved, would you sell out cheap so "your staff and crony investors" make more money than you??? Just imagine the risks you take and the length of time exposed to those risks. Easily 2 years from buying of land before everything can be ready for sale. And it doesn't stop there. Construction of the project has its cost risks, as well and believe me, the risks are real. Even contracting the construction out doesnt eliminate the risks, should material prices rise up to a level whereby the contractor finds it better to leave the construction site. Renegotiation will most probably occur.

June 9, 2011 at 2:31 PMMalignant

Now on the reason WHY prices are getting out of reach.
There many land owners who are asking for high prices for their land. Understand this clearly. People who can buy and keep land are on top of the pyramid. These people are less likely to be adversely affect by world wide rising commodity prices but morely likely to benefit from it. Thus, their asking prices for their land increases each year even if there's no buyers for their land/property. Most developers are faced with this ever increasing land price. Unless you're a developer with massive landbank in ripe development area. One such developer would be BSG.
Next cause of rising prices is the devaluation of the US dollar. Everything in world trade is denominated and traded (mostly, and by a far majority)in USD. Now the Federal Reserve has printed TRILLIONS of USD out of thin air and loan it to the US Treasury to basically fund escalating costs ( mainly for their wars - which is used to expand their empire - which the US as a country doesn't benefit, only corporations, who funds and owns the politicians, but that's another story)Just research on Quantitative Easing - QE1 and QE2. Now what happens from this action is that prices have gone up tremendously for all commodities, including OIL, Gold and Silver. Also, a lot of cheap cash is flowing in the world market, USD which you can borrow for less than 1% per annum. This has translated into rising property prices in Asia, on the whole.
Now one DIRECT contribution to rising prices in Penang comes directly from our gung-ho Lim Guan Eng. The political system is all wrong. I voted out BN but i sure as hell didn't vote Lim Guan Eng in as Chief Minister (food for thought, isn't it?) Anyway, in his ferocious attempt to show that he's better (a fact that doesn't need proof, even i or any competent manager would be a better CM than Koh), LGE has imposed a rezoning fee in land use rezoning. What happens here is that development costs has just increased with this move. Any land which isn't zoned residential needing to rezoned into that has a surcharge to be paid. Previously, a developer has to lobby for this rezoning, which has geopolitical implications and this lobbying has its "costs", if you know what i mean. Now, you still have to "lobby" but there's an additional fee to be paid to the state government upon approval. A simple example would be this. 88 units of terraces. 16 million for rezoning fees. Additional cost of approximately 180,000 per unit. This varies from area to area. But then, you can bet that houses in Balik Pulau or Butterworth won't be that cheap any more...

June 9, 2011 at 2:54 PMMalignant

Another issue that i would like to bring up is that the lack of state government's will in imposing strict regulation on implementation of low medium cost flats. If you are a developer and submits plans for development, you will be required to build LMC flats if you development exceeds a certain number of units. Those LMC flats are supposed to be sold at 75k per unit ( may vary from area to area and developer may appeal for a higher price). (There should also be an imposition of the buyer to use the unit for own occupation and restriction on reselling of these units for 5 years, also, owners who are caught renting out their premises and empty units can be hit with an exceptionally high assesment fees)The developers however jack up the prices by requiring the buyers to buy carparks and to take renovation packages. The state government should impose that they sell these properties at the stipulated prices with no exception and from the state housing department list (which should be displayed for all to see, much like how your photo and intention to get married is displayed at IC office, so that anyone and everyone can view and object to your application) The state can easily impose this on developers but somehow some developers have gone on their own ways. One interesting development would be Central Park whereby the developer has yet to offer for sale their LMC flats but is going for the issuance of the CFO for Central Park. The local council can still impose that the LMC flats are to be sold before they issue the CF. Why they have not done so and what the CM's office is doing it is beyond my understanding. Are they imcapable? or are they corrupted? Another interesting development is BSG's LMC flats at Bukit Gambier. 780 units, it seems.

June 9, 2011 at 3:17 PMMalignant

There's a 2nd post whereby i explained very clearly 3 reasons why house prices are so high, one of which the current state government is directly responsible for. >< Can the admisnistrator please help?

June 10, 2011 at 12:53 AMcondomana

Dear Malignant,

Thank you for sharing your thoughts. Referring to your comment on June 9, 2011 1:28PM, I have a few comments.

"The current high price of property in Penang, 1st of all, isn't caused by crony investors or by staff taking units from Developers" ---- I don't think this is the only factor, but it sure is one of the many factors.

"EVEN if any development company wants to sell to crony investors or to their staff, it's is that company's every right to do so" ------ the dev company definitely has every right to do so, but the way you do it, and the way you subsequently sell the rest of the units, affects the market psychology, therefore must be regulated, failing which another sub-prime crisis might develop.

"That being said, i don't believe any company would do so. Why? IF you invested SO much money into the land, then waste so much time and resources to get your plans approved, would you sell out cheap so "your staff and crony investors" make more money than you???" ----- Example, developer builds 10 units and planning to sell 1mil each with total cost of 6 mil. Instead of using 6 mil of your own money to fund the project, why not sell 5 units to "associates" at 800k per unit cash (to raise 4 mil),and promise "associates" that the remaining units will be sold at 1.2 mil per unit to "water-fish" buyers in this "hot" market. In that way, (1) developer only has to come up with 2 mil for the project, (2) it's easier to sell 5 units rather than 10 (3) it's easier to sell when you tell potential buyers 50% have been sold on 1st day of launching (4) the best part is, dev still gets 10 mil at the end of the day..:)

"Just imagine the risks you take and the length of time exposed to those risks. Easily 2 years from buying of land before everything can be ready for sale. And it doesn't stop there. Construction of the project has its cost risks, as well and believe me, the risks are real. Even contracting the construction out doesnt eliminate the risks, should material prices rise up to a level whereby the contractor finds it better to leave the construction site. Renegotiation will most probably occur" ----- I understand the risks, but I am sure the developers wouldn't want to understand this kind of reckless pricing and sales tactic is bad for the financial system. If the developer can't swallow the risks, and instead have to put in big buffer in the pricing which in turn cause havoc in the whole pricing structure and credit situation, pls don't be a developer. You're not doing any good to society. Malaysia needs more talent in the field of innovation & creativity, not in the field of building houses that find no occupants.

June 10, 2011 at 1:28 AMObserver

Dear Malignant
It is good that you raised up all the possible causes of high housing price and I do agree with some of them but not all.

Firstly, I must say the developer and the cronies do play a part. In the past, the price remained the same when the phase was opened for sales from the beginning until the last unit in the same phase. There might be small increase for certain justifiable adjustment. Now the prize is changing so rapidly all the time from start of selling of first unit to the last unit. Very very few developer will maintain the price as the same nowadays except one I came across is MTT where this developer increased the price only once for RM 30K after converting from leased house to freehold which I think is very fair.

Developer is not actually selling cheap to those cronies and bulk buyer, the price already high but to the rest with even higher. When the cronies and bulk buyers took up certain portion of the project, the developer can push the price even higher as it creates panic buyers and more speculators will participant since these people have the confidence that the price can be pushed higher by those in control. Therefore you could hear such a such project already sold out before actual launching. Have you heard certain project in Penang can only be bought by bulk only?

On your 3 reasons, I do agree with the acquiring land cost. The land cost is shared out by the number of units in the project, but the escalating house price is way beyound the increase in land cost/sq ft

On the second one, I may not have the economic knowledge to undertand how the devaluation of USD dollar can directly affecting our housing as most of the raw materials, manpower, land cost has nothing to do with USD. It might be due foreingners that with more cheap cash to purchase our properties, if that is the case the government should control the house purchase by foreigner. Who can control on the restriction, the federal or state government ? How about My 2nd home project, is it under the jurisdiction of federal or state ?

I am not sure of the rezoning cost, if that is true, then the state government is to be blamed for those project affected by this factor. Skyrocketing housing price is not only affecting Penang, If the state government in Penang is directly affecting the house price increase, what about the same price increase everywhere in Malaysia especially in Klang Valley, Johore and certain other cities in Malaysia. It has something to do with the national issue like easily available credit by banks, last time used to BLR + 2% and now is BLR-2.3% type of loan

Yes, the state government shuld enforce strict regulation on LMC, no CF should be given if LMC requirement is not met. Have 100% transparency on the purchaser of LMC and impose strict regualtions to ensure only the buyer is staying there, otherwise imposing exceptional high assessment or even the unit will be taken back by government for another eligible person. If Central Park has not fulfilled the LMC requirement, it should not be given CF, then we can know who are the speculator that tied up with this project. Despite all the complaining of bad workmanship and bad quality by this developer, all those units are selling by all the investors at such a handsome profits at 35 - 45 % now.

As I mentioned before, the government should implement high RPGT so that people only buy for their own stay and not for transaction, again who is in control, federal or state government on this ? If everybody is buying own stay or future stay, the price could not pushed up easily by all those parties in control.

Lastly, my suggestion for Penang Island housing, only the state government can build houses so that price can be controlled 100% and all those in Penang will have their affordable house. Then we know whether state government can be counted on. otherwise many of the next generation have to be forced out of Penang island or even out of Penang state.

Malignant or the rest of readers, please comment if what I said is unreasonable

June 10, 2011 at 11:17 AMcondomana

Dear Malignant,

On rezoning fees issue. As you pointed out, "Previously, a developer has to lobby for this rezoning, which has geopolitical implications and this lobbying has its "costs", if you know what i mean. Now, you still have to "lobby" but there's an additional fee to be paid to the state government upon approval."

I think the concept of money going into state coffer instead of someone's "Imperial Balinese Garden" (if you know what I mean) is very good. It will be even better if the state can make this info public, easily accessible on the net, like what our PM said recently - Transparency vital for people to have faith. As for the rezoning amount, I don't know what a fair amount is. I am sure no one knows what a good amount is (even the state), unless there is a price setting mechanism to determine that based on market condition. But the concept of rezoning fee is very good.

June 10, 2011 at 11:57 AMalexenjoylive

The highly over-priced condo is gonna suffer in this 2-3 years especially katino, summer winter place la, golden triangle rectangular la, Torch light collection la, all speculators investors will jump from penang bridge, some jump from komtar, some jump straight from the unsold units of Time Square Bird Regency, i guarantee

June 10, 2011 at 12:26 PMRafael

Hi alexenjoylive.

If that happens I be there one saving them from committing suicide at least buying their unit at a bargain price.

Hehehehehehe .........

June 11, 2011 at 9:36 PMMalignant

When we look around the world hard and long enough, we can that all politicians are not more than anything but thieves. There are some exceptions, of course. But these are rare. Let me put things into a better perspective.

When a chief minister says they will will probe something like that which you call a scam, it should be the last thing they do. As here we have blame on invisible cronies and staffs of development companies purported raising the price of the houses as though they are the only guilty party to a wicked crime, the government speaks out when they themselves have a big hand in causing such rise, it is and will be a calamity if we don't speak out.

The concept of fees going the state coffers or to anyone's 'imperial balinese garden' or 'gold gilded bathroom' doesn't sit well with me. Because no fees should go any where, not to the state coffers, or to the garden or the toilet.

1st of all, you might have misinterpreted my statement. With the current rezoning fees, you still need to 'lobby'. Means extra charge, not change of payment.

This country is young , we may say. But let me introduce my tagline, which will let you identify me in person in time to come : "HALLO. LU INGAT KITA BARU MERDEKA SEMALAM KAH?"

We over 50 years old, we have had many citizens born in 1957-1977 who are now 54 - 34 years old. Great education, we had. And now, we even have the internet.

What should be done by the local council and our state planners is to have a review of our master plan every 5 or 10 years, together with various NGOs and then rezone accordingly. When the state gets crowded, it is obvious what we cannot rely on old zoning with isn't updated. This is part of their work. This part of why they get paid for. There is on justification to this rezoning fee.

To introduce zoning fee abruptly like that has caused a significant cost increase. This is one thing. The next thing is, there isn't accountibility. When you introduce a fee, you bloody well tell us what you want to use the fee for. Is it to build low cost houses? It is to acquire property surrounding schools to make car parks so we dont have to mill around schools (like pasar malam traders waiting to open shop) while waiting to pick up our children, in order to solve the traffic congestion? But no, nothing. Just keep your eye on the money. I'm just worried that it will disappear in time. And more taxes in various forms will come our way.

Give me some time. I will address your previous post and Observer's excellent post

June 11, 2011 at 10:06 PMMalignant

Also , easy credit and the revamp of the real property gain tax (RPGT) did help to spur more investors/speculators into the market these few years.

5-95? what is that? 5% down and not a single sen down until CF? or 10-90? same thing. This has changed the game of property investment. Central Park is one of those which sold out on that situation. We'll have to see if the market can absorb the avalanche of units coming out.

5% RPGT ? Why on earth did the Federal Govt do this? To gain votes? To collect more stamp duties? (The rumor is they are running low on funds, and this was a move to collect more stamp duties, but that is another story as well) To help their crony developers?

But the effect is this. Low tax has allowed more investors to look into property investment/speculation. If i put 50k down , get a loan and sell & profit 100k, and the government tax 5k, so what?

Putting the blame on crony investors and co staff is irrational and irresponsible.

June 11, 2011 at 10:17 PMMalignant

And, another menace contributing to the rising price are the estate agents, but i shall elaborate not. Will leave that to the readers' judgement to come in conclusion as to how.

June 12, 2011 at 12:42 AMcondomana

Dear Malignant,

"When we look around the world hard and long enough, we can that all politicians are not more than anything but thieves. There are some exceptions, of course." --- I agree with you

"As here we have blame on invisible cronies and staffs of development companies purported raising the price of the houses as though they are the only guilty party to a wicked crime" --- I specifically said "I don't think this is the only factor, but it sure is one of the many factors. "

"The concept of fees going the state coffers or to anyone's 'imperial balinese garden' or 'gold gilded bathroom' doesn't sit well with me. Because no fees should go any where, not to the state coffers, or to the garden or the toilet." --- You mean you expect to turn cow dung into gold for free? Hehe, make sense or not my friend?..;D...But you do have a point when you say the state should make the fund transparent in order to gain faith from people.

Easy credit and low RPGT tax have definitely contributed to speculation in property, that's a no brainer. It was good approach for the gov to lower RPGT tax during recession to sustain and encourage investments. But the recovery came faster then expected, while the gov is still sleeping. Estate agents? Those spineless leeches!

June 12, 2011 at 9:39 AMrayyap

You guys did not mention ONE good point about the rising property prices; that's WEALTH CREATION.

Money transfered from foreigners to Malaysians, which then dump back to our economy.

... just my 2 cents.

June 13, 2011 at 7:15 PMMalignant

i've just lost my entire page, trying to post my reply to you condomana >< give me some time.

June 14, 2011 at 7:38 PMMalignant

Ok, in response to Condomana's post on June 12.

Every company that does business will want to affect the market psychology in order to push their products. Much like MacDonalds selling us junk food but advertise lifestyle, etc. It isn't illegal to do so. Maybe, we need regulation. But we have to thread carefully as this has a lot of implications. A subprime crisis such as what happened in US will not happen here. But we will face some crisis, for sure, as residential prices are getting out of reach for even middle income families.

What happened in US (the subprime crisis) is that the banks bundled their lousy mortgages ( sub-prime – meaning below prime, e.g high margin loans, property with high valuation, poor location , etc) and sold them off as derivatives which it turn was resold and resold (traded) They then with money, did more loans and then rebundled them again and sell. It was a vicious cycle and was bound to collapse. There was also the government supported enterprises (GSE)lending money to poorer people to purchase their house. People with questionable income or inadequate income – Fannie Mae and Freddie Mac loaned out billions and billions of dollars. The less critical story of this can be found in wikipedia. This is an eye opener and every government servant of some ranking in the housing ministry and finance ministry should read it and make a hard copy available in their office. But that also is another story.

On the example that was put forward, it looks to be a classic way of getting venture capital, something that has been practised from ages ago, and is prevalent in all kinds of business. 10-6 =4mil profit. When the developer sell 5 units for cash upfront of 4mil, he loses out 1mil profit no matter how we slice it. The buyers take a risk of putting up that 4mil as there's no actual guarantee the units can actually go for 1mil each, let alone 1.2mil or that the developer can even start or finish the project. Also there's an opportunity cost for the 4mil given upfront. The remaining 5, sold at 1.2mil would net only 6mil, giving out a total sales of 10mil and profit of 4mil. The developer stands to gain not much more, but getting cashflow. But wait. That is assuming the market can accommodate 1.2mil per unit. If the market doesn't get hot, but allows only 1mil per unit. The remaining units will then net 5mil, total sales is then 9mil, profit is the 3mil and the developer makes less not more. If the market can be 'goreng' up, then the best way for the developer to make the most profit is to get a loan, then sell the units all for 1.2mil each and net 12mil and profit would be 6mil minus some interest for the loan. Why share ?

As for the waterfish, there will always be one. “There's a sucker born every minute” - a phrase coined by P.T.Barnum in the 1800s. A fool and his money will soon be parted. Ever house buyer should do his homework before committing such an enormous amount of money to buy a house. This is why the internet is such an important breakthrough. It is truly a pandora's box of not just all evil, but all that is good as well. Blogs, forums like this has allowed many of us to look for information , share our thoughts/opinions and knowledge so much more easily – I simply cannot emphasize that enough. (1 of 2)

June 14, 2011 at 8:23 PMMalignant

(2 of 2)
You see, the developer is holding more risks than the average speculator or investor. And it depends on the type of development they want to pursue. How much can a developer make on a 500k unit? And compare it to a speculator who puts 50k down then flips it for 50k. Or the investor who puts 50k down, gets a loan and then sells it off for 700k 2 years later. We can see many investors who are asking high prices for their property, which is for all to see in the everyday advertisements.

(Lol, as i write this , it is beginning to appear to me that the culprits to a rising price seems more likely to be the investors/speculators and the estate agents who help to ask high prices, creating a false scenario that prices have risen tremendously. We can see this everyday with the sea of of ridiculous asking prices in this website, mudah and many others).

A developer holds a lot of risks but its main advantage is that it is almost a singular seller ( or one in a few) in a market place. But then the market has fragmented buyers. If the buyers gangs up then act like one body (much like a union), then we be able to wield a very strong influence in the market place. But that's another story as well.

June 14, 2011 at 9:07 PMObserver

Many parties, the Investors, specualtors, developers alike are taking advantage of the favauroble condition (cheap & easy credit/loan, 5/95, 10/90 arrangement, low RPGT, inflation push factors created by government, no governmental control, speculative statemens by certain bodies including our Dep. finance minister etc) these 2 to 3 years to push the house price skyrocketed.

Benmarking with with Singapore, Hongkong, Japan etc that our property price is still low in this region. We can't compare this way, what is our average income compare to them, we have much more land space compare to them. Do we justify for this high price.

Rayyap is talking about wealth creation from the rising property price, is this healthy to the overall economy ? Just because few rich people make money, majority of the people have to suffer. Rayyap, try to create wealth somewhere ie share market, house is a fundamental need for everyone. Have you made enough wealth from property to ensure all your future generations have a good house to stay ?

June 15, 2011 at 9:19 AMObserver

The parties includes agents as well who always putting record high asking price

June 15, 2011 at 11:03 PMMalignant

Ok, Rayyap, besides the seemingly cool "just my 2 cents" there's a lot of phrases that are useful. How about this one? It's called "keep your eye on the ball".

Recently, there was this newspaper article that came out. Read the OP (original post/article). A lot of people got on the bandwagon and start throwing stuff out. Then I thought I would share my knowledge.
It's not about whether the rising prices is good ( which I very much doubt is,) or bad. It is more of whether developer's staff and cronies have a such a big hand in the rising price that the Chief Minister stated that he will “investigate” this “scam”.

Wealth creation? What is wealth? If you have money and property then you are wealthy. Minus your loan, of course. When people are rich enough to start acquiring property, causing the prices to rise tremendously, then you see the "wealth effect”. Or is it? Whose wealth are we seeing here that is effecting this? The overall Penangites? Foreign retiress via MMH2? Some rich penangites who are working overseas? US dollar devaluation behind it?

But, the important thing is what does this mean for the average not-so-rich majority? The average joe. Is the current government helping or are they actually making the situation worse?

June 16, 2011 at 12:26 AMrayyap

Is the government helping in this situation?

Yes & no. They won't follow your suggestions... but will do what the politics do.

OK let the property price goes up... then build some affordable housings (someone still making profit in these so called affordable housings). Haha, everyone happy... win win situation.

So people like us, we need to help ourselves, we go with waves and not against it. That's the way to survive in this realistic, self-interest world.

... just my 2 cents :)

June 16, 2011 at 6:38 AMMalignant

We help each other. That's the whole point of having this forum. We share information and we learn from each other. Every crooked politician is afraid of a well informed society capable of critical thinking. If you have read my posts, you would now know that there's this rezoning fees, research that and help spread this knowledge if you want, also you'll take note when you hear QE3 , or the word Federal Reserve. Prices will rise even more. It doesn't look good.

Najib gone to US and come back announcement that the economy will boom with US investments. I'm thinking of whether he sold out the country and how. Learn about the New World Order conspiracy. H. Clinton comes to town. Followed by the US Defence Minister Bill Gates 2 weeks later. Something is brewing. Malaysia suddenly developed vaccines. Research vaccines please. (This country hasn't been able to make our own cars yet) The Bilderberg Group just met. Conspiracy theorist touting that they want to control/kill the internet. All sudden 1st page, we are worried about cyber attacks. Biometric controls.All these are on front page newspaper. Learn about what a false flag is.

The world isn't all that selfish. There are many people helping others. Sometimes, even if we are hungry we can give our meal to someone who has not eaten in days.

If property prices go up, we can resist buying more than we need. The return is not good. We can look into other forms of investments. Property isn't liquid. And easier to buy, not so easy to sell. And the BLR – 2 loan is 4 %, but the BLR is adjustable. Be careful. The government isn't going to build some affordable housing nearby. Recent announcement is at Batu Kawan. Don't think many people want to go there. Taman Green LMC 50k, plenty of free carpark at Paya Terubong now selling below cost. Think it went as low as 20-25k.

June 16, 2011 at 7:42 AMMalignant

Sorry for the late reply, Observer.

Well, you are entitled to your opinion that developers and their cronies play a part. But after reviewing my own lists of reasons why price have increased, i'm more likely to believe they took advantage of the market conditions (easy credit, low rpgt, and devalued dollar- resulting some people with more cash) and sold their products at a high price.

I'm also wondering who bought bulk from IJM. Through the vine I hear of this malay lady(there are others). Maybe she has a plantation somewhere. People with land on mainland getting good money it seems.

Yes , some projects are quite profitable, especially the east coast, when they acquire the land rather cheap. The land owners are quick to adjust their prices as well. Land prices are kinda high now. To buy now and then plan for development 1 or 2 years later seems much of a big challenge now.

The US devaluation is a big thing. Cheap cash not just to foreigners but certain malaysians as well. The my 2nd home project is a federal endorsed project. State consent is needed for foreigners to purchase and through that consent I think they can regulate by putting restrictions on certain property. Too early to check the National Land Code - haven't take breakfast yet.

The rezoning fee is true as the Fukushima meltdown. Price throughout Malaysian and the region has gone up as well. Penang just made it worse with this rezoning fee. KL you can get decent property still. My friend sold a nice terrace just last week in Shah Alam for 500k plus only. His place was very nice, I almost bought a semi-d there for below 1 mil – renovated as well, gated and guarded, and only RM100 service charge – 100 units terrace and semi-d mixed. My cousin at Sri Hartamas, terraces built by Loy of Mbf (I think) guarded, with a few mini parks ( like what you get at Island Glades) – enclosed – going for 1 -1.2mil , 25x80/85, road in front 40 ft, outside the house plot can park 2-3 cars. That one I regretted not buying at 800k 2-3 years ago. But that, I can understand why 1.2 mil, near the new Agung's palace, easy to go KL and Mont Kiara , easy to go Damansara. 1.2 mil Southbay – easy to go to 2nd link to go Batu Kawan eat seafood but have to wait for completion still (lol) In Singapore people are selling their HDB flats, apartments , condos then rent to stay. Uncle Lee is very upset. The foreigners and chinese buying there. They revised their immigration requirements recently. (Last time can afford, now a bit hard. My wife wants to send my children there – think i'll go Thailand and “goreng one pot”). I will speculate their wealth comes from this US dollar.(1 of 2)

June 16, 2011 at 7:44 AMMalignant

(2 of 2)
Speaking about Fukushima, apparently it's more severe than what the people in charge led everyone to believe (very big cover-up). This radiation is very dangerous. Countries like US and Canada are getting very high readings. Eventually I think a big region of the world will be affected. Germany has announced that they will go nuclear free. Malaysia? We are waiting for the “experts” to say it is safe or not, our Minister says – probably the same people who will get awarded building the nuclear plant- after they say it is safe. Just the 3 reactors at Fukushima alone may spell the doomsday scenario for us all and the end of the world, as we know it.

RPGT should definitedly be revised. The current state government stand on cheap housing is ridiculous. They require developers to build low cost housing if their project are of a certain size. You know they charge development fees as well? Why should any developer build any low cost? The cement factory giving subsidy for the low cost materials? Or the steel factory? A private company cannot be forced to do social duty. If they want to do so themselves, great that.

All the money collected from these development charges, rezoning fees should be used to acquire certain parts of the island – strategic spots – to build low cost flats. There's a lot of examples we can see from other countries, just copy, improvise to our situation, or formulate ourselves – it isn't rocket science. PDC should take back those vacant, big pieces of land on the east coast and do something more useful with it. How they sell the land just like that with no requirement to build, I don't know.

Breakfast is served. Apology for any syntax, bad grammar,etc – no editing done.

June 16, 2011 at 9:28 AMObserver

Dear Malignant
Thanks for taking your effort for sharing your comprehensive info. Really appreciate that.

June 16, 2011 at 12:11 PMcondomana

Dear Malignant,

Thank you for sharing your thoughts and the very interesting conspiracy theories..and other stories..:)

Now going back to rezoning fees, I take it as your point of advocating zero rezoning fees is so that plenty of cheap development land would be available in the market, and therefore putting a downward pressure on land price.

OK let's take the example of Boon Siew developments around permai area tanjung bunga. Are the new houses there cheap? I'd say not, despite the fact that the land was acquired by the great old man at almost the price of a BigMc donkey years ago. In fact, those new launches are always priced 20-30% higher compared to prevailing market price.

So the question is, when you create cheap development land, (a) would you increase the developer's margin (put more money into their pockets instead of the people's pocket) because they price products at "market" rates anyway OR (b) developer would start to lower the price because they feel guilty enjoying fat margins.

Dear rayyap,

"Money transferred from foreigners to Malaysians....wealth creation"??? When you have more foreign companies coming here to hire and to buy our local products and we tax the company for their profits, that's wealth creation (money going straight into our pockets).

When you have 1 foreigner buying property, resulting in 10 locals buying too (with the bank's money) thinking that it could be sold to foreigners later for a quick buck, on surface it looks like wealth creation, but it's actually not. We are merely extracting liquidity (money) from the bank's account and put it into the property sector, simply put. Remember our all-time high household debts?

June 16, 2011 at 10:27 PMMalignant

I was not advocating zero rezoning fees in the post(s). I was pointing that our CM has had a hand in making development more expensive by setting this rezoning fees. This added cost is eventually passed down to the purchasers. Not only that, they did not provide accountibilty as what they are going to do with these fees collected. I'm also pointing out they haven't done their job by not having a study at regular intervals to rezone the areas as we, the Penang people grew and developed as a state.

To add insult to injury, they want to go “investigate” a purported “scam”? If it is a scam, then the commercial crime police should get involved.

Without rezoning fees, we may not have downward pressure on land price. Damage have been done. After setting the rezoning fees, the market has absorb the higher selling price to a certain degree. There are projects affected by this which has come on the market and test it fully. Land owners have taken note. If the rezoning fees is taken away now, we may even see a upward pressure on land prices as land owners would know that the developers doesn't need to pay this fee and raise their prices. But some land owners may see interest in their land by buyers who may find it attractive to buy now ( assuming if they do not increase their price).

BSG is now apparently has taken a new direction after Uncle Boon Siew passed away. USB had more humanity. They (BSG) are now interested in getting top value for their property. BSG has a few family factions in it now. Those renting from BSG has had their rental increased or kicked off. See the new hoarding at Chulia Street? They kicked all those people out. Starview restaurant moved. We can see the change all over town as regards to their old properties. Was this the effect of the Datuk Lim K.S.? I don't know, but I can tell you he is aggressive. As far as BSG and a few other big developers are concerned, the rezoning fees will not affect them.

But for individual land owners and smaller/medium developers, this rezoning fees will make a difference. By building further and offering cheaper prices, they may then be more competitive. (1 of 2)

June 16, 2011 at 10:29 PMMalignant

(2 of 2)
But then again we have to look at the overall situation. In Penang, we only have one big incentive push by the setting up of the FTZ at Bayan Lepas, which now we see the maturing of the east coast. Teluk Kumbar is slowly coming up. But the government hasn't done enough. Ideally they should have slowly improved the infrastructure southwards towards Balik Pulau and Gertak Sanggul. There is tourism potential for the coast between Teluk Kumbar to Pulau Betong. Just look at the pathetic road after the airport passing Bayan Lepas town. It is the same narrow lane since Merdeka. Hallo? Was it yesterday we had independence? There isn't any park near the Bayan Baru. Yes , there's that pathetic small walking ground inside relau. Or you can walk up that narrow path at Bukit Jambul. Just imagine the development fees they collected. Or the income tax all the people paid for those working in the FTZ. The roads in the FTZ is deplorable.

Hell. In fact almost everywhere in Penang, the roads are sub standard. They dug outside my house area a few months ago to lay some cables, and the repatching has given me 3 “bumps” after turning from the sub main road (not from main, take note). Penang? Standards have fallen. Drive to Hatyai and you get better roads there. You can see the difference immediately as their tar road finishing and quality is much higher. Here, if you know how to discern, they “kiam liao” and “cin chai cho”. As what's this banglas doing construction work for the local council's contractors? They should specify work given to contractors with local workers.

You see in established areas, prices are going to increase for sure. What needs to be done is to create new urban areas further away. This takes planning and work from our local council and state government. Not just slapping fees. And wasting money. The small roundabout at Ayer Itam leading to Penang Hill went through 2 unnecessary major renovations, (some people made money from this), the latest just recently. Did it look better? The MPPP must have thought the Ayer Itam people are idiots. It didn't look better and the latest renovation made the roundabout higher, resulting in loss visibility , you can't see over to the other side now. More dangerous, no?

Anyway, the new satelite town of Batu Kawan cannot and will not be like Bayan Baru. Nothing is there but the hope of relocating folks to there because of the 2nd link. It will be a long time before we can see any semblance of a township there. But Butterworth will see more development overall as prices in the island has gone prohibitive.

Then there's this talk about getting long term visitors ( why not short term). What term??? Why not ALL term? >.> 1st priority is to keep the state clean and tidy. We're like running a big hotel here. The list goes long and hard. Kinda lazy now. Peace.

June 16, 2011 at 10:43 PMMalignant

Post 1 of 2 , paragraph 3 line 3 should read, "There are still projects which are affected by this HAVE NOT* come out to the market and test it fully.