Speech by YAB Tuan Lim Guan Eng, Chief Minister of Penang, at the Penang International Property Conference
on 5 August 2016.
I wish to thank the organizer of this event, the Penang State Housing Committee and Penevents Sdn Bhd, for organizing this mid-term review of the Penang International Property (PIP) Summit Conference. I am pleased to be here once again to give all of you an over-view of what has happened where the State’s initiative to attract investment which will have an impact on the property sector and what is to be expected in the next few months before we draw a close to 2016.
Malaysia has been buffeted by economic headwinds some due to the global economic slowdown such as the sharp drop in oil prices, others self-inflicted such as the RM50 billion 1MDB scandal that caused the Ringgit to plummet in value and the imposition of GST. GST should only be imposed on high-income countries like Singapore. Middle income countries take at least 2-3 years to recover and the timing is poorly planned and a failure of policy management. Thailand has GST and its economy has performed poorly. Singapore has managed to weather the ill-effects as a high-income economy. Whilst many external factors have impeded Malaysia as a whole, Penang remains resilient, helped by the manufacturing and services sector as well as increase in tourism.
Pursuant to the RM500 million affordable Home initiative by the State in 2014, since the start of 2016, the state government via PDC, is in the process of delivering 22,512 affordable housing units at Batu Kawan, SP Chelliah, Teluk Kumbar and Jelutong, priced at under RM400,000 on the island and under RM250,000 on the mainland.
Also, the newly announced Seri Tanjung Pinang Phase 2 has been well received as it promises large expansion of new public spaces along the coast line of Gurney Drive and perhaps new townships at Tanjong Tokong for all walks of life. On the mainland, Batu Kawan remains robust with new promised development with catalysts such as IKEA, Columbia Hospital and Universities over the next 10-14 years.
2016 is indeed Penang’s ‘Transformational year” as the state has indeed focused its efforts in the transformation of the housing and property sector with people-centric policies. The recently announced RM27 billion Penang Transport Master Plan will certainly impact the housing and property market and I am very confident that this infrastructure building will help spur economic growth with its multiplier effects.
The Penang State Government will continue its effort to transform Penang into an international and intelligent city that is a location of choice for investors, a destination of choice for tourists and a habitat of choice for residents who desire sustainable living. Penang recorded RM 8.2 billion in investments in 2014, a 110% increase compared to RM 3.9 billion in 2013. For the 8 years period between 2008-2015, Penang recorded an investment of RM 55 billion, a 90% increase compared to the previous 8 years period 2000 to 2007 of RM 29 billion.
We are now 120 days away from the new 2017 but the first half of 2016, has indeed left the state government with more opportunities to review as well as improve its housing and infrastructure policies. By this continuous review, Penangites will continue to benefit from the people friendly policies in Malaysia.
The more pertinent developments in relation to affordable housing policy by the Penang State Government is the recent introduction of a more affordable housing product, namely the RM150,000.00 controlled price unit at 750 square feet controlled size. This will make access to affordable housing easier and clearly reflects the priority given by the Penang State Government to the provision of affordable housing to Penangites. We have also recently agreed to reduce the maximum ceiling price of affordable housing on the island from RM400,000.00 to RM300,000.00, and to date, the Penang State Government has some 12 projects in the pipeline which will see 22,710 units made available to Penangites beginning this year.
The reintroduction of the rent to buy scheme has also seen a keen interest as can be seen in the launch of units at Taman Seruling Emas and Taman Sungai Duri Permai, whereby the response is overwhelmed, and the Penang State Government will be looking into widening this category of housing. We hope that the Federal Government would expand on its poor housing programme with Penang being allocated only 70 units out of 20,454 units planned nationally – the lowest in the country at only 0.3%!
My recent announcement on the State considering the possibility of reintroducing rent control for pre-war buildings in the George Town UNESCO World Heritage Site, was a result of concerns that rental in such properties in the said area were increasing in an alarming manner. We see rent restriction as necessary to cap rental increase at a maximum of 20% over 4-5 years over the current market value. This will serve to protect our intangible and living heritage to give locals the opportunity to stay in the heritage enclave without being driven off by high rentals. Both YB Chow and YB Jagdeep had been tasked to study the matter and gather all relevant information from all stakeholders before a definitive decision is taken. YB Chow will focus on public feedback and YB Jagdeep on the legal implications and framework.
The Pakatan Harapan coalition urges Penangites to continue its support for the state government so that Penang continues to be an attractive place to invest in and to live in. I am confident that Penang will continue to forge forward with its continued vision of transforming Penang into an international and intelligent city, where the axis of the the state administration is deeply rooted on the principles of CAT governance.