Landed properties: Penang raises entry prices for foreigners

Move protects local buyers' interest as weak ringgit benefits foreigners: Housing chief

GEORGE TOWN • Penang has jumped the gun by raising the minimum price for foreign purchases of landed properties in the state from RM2 million to RM3 million (S$632,000 to S$948,000), even as the federal Malaysian government is mulling over increasing the floor price for foreigners.

Penang's housing committee chairman Jagdeep Singh Deo said the move will protect the interest of local buyers because the depreciation of the ringgit in the last few years has made purchases of homes cheaper for foreign buyers, The Star newspaper reported yesterday.

The price of strata-titled buildings such as condominiums will continue to be sold to foreigners at RM1 million in Penang.

The Malaysian state consists of both Penang island and land on mainland peninsular Malaysia.

"The state government feels that the serious depreciation of the ringgit since last year gives the justification for the state to increase the minimum price," he told a news conference yesterday.

Mr Jagdeep, the state's Cabinet minister in charge of housing, was commenting on a suggestion by the Penang branch of the Real Estate and Housing Developers Association that the floor prices for property units aimed at foreigners should be reduced to RM800,000.

JUSTIFICATION FOR INCREASE

The state government feels that the serious depreciation of the ringgit since last year gives the justification for the state to increase the minimum price.

PENANG'S HOUSING COMMITTEE CHAIRMAN JAGDEEP SINGH DEO, on increasing housing prices for foreigners.

Homes in Penang are popular with Singaporeans and Indonesians from neighbouring north Sumatra, as well as Japanese retirees.

The federal Malaysian government sets the minimum purchase price for foreigners, but the country's 13 states are allowed to set different minimum prices according to local supply and demand.

The federal government currently sets the lowest price for foreigners at RM1 million.

Urban Wellbeing, Housing and Local Government Minister Noh Omar said earlier this week that the central government might push the floor price higher due to the weakening ringgit.

The minimum price has been revised several times in the last two decades, with the current RM1 million minimum limit set in May 2014.

The federal government does not release data on foreign ownership of property in Malaysia, deeming it a sensitive subject.

Purchases of old shophouses by Singaporeans in Malacca and Penang are often hotly debated online and in the Malaysian media, with the buyers accused of reducing affordability for Malaysians.

Mr Noh Omar said the government had conducted a study on the issue and is considering two options.

One would be to raise the floor price of RM1 million per property, and the other is to set the minimum price in US dollars for all foreign buyers, the New Straits Times newspaper reported him as saying.

A version of this article appeared in the print edition of The Straits Times on March 18, 2017, with the headline 'Landed properties: Penang raises entry prices for foreigners'. Print Edition | Subscribe