Penang to prioritise local house buyers
Last updated on 19 April 2012 - 09:15pm
GEORGE TOWN (April 19, 2012): In a bid to ensure that locals are not priced out of owning property in Penang, the state government has proposed to increase the floor price of property for foreign buyers from RM500,000 to RM1 million.
This applies to all types of property in the state.
In addition, foreigners who wish to own landed property on the island will have to meet a RM2 million minimum purchase price.
Chief Minister Lim Guan Eng said today the move is expected to be implemented by July 1 at the latest.
"This is a first step to protect the interests of locals. It is to give priority to our own residents," he told a press conference prior to attending the screening of a documentary on urbanisation.
The move by the state administration comes on the heels of reports that the federal government is also considering a similar move to control rising property prices.
The decision was reportedly "in the pipeline" and would be implemented by the Prime Minister Department's economic planning unit.
In his opening speech earlier, Lim noted that of the 774 and 890 property transactions done in 2010 and 2011 respectively, only 2.98% and 2.26% were by foreigners.
"However, to ensure that locals enjoy priority for less expensive properties, this restriction will help to provide a level playing field since foreigners have the advantage of a higher currency," he said.
In an immediate response, National House Buyers Association deputy president Brig-Gen (Rtd) Datuk Goh Seng Toh lauded the proposal.
"It is an excellent move, otherwise foreigners who have a lot of cash will swamp the (property) market and locals will lose out," he said when contacted.
Real Estate and Housing Developers Association Penang chapter chairman Datuk Jerry Chan said it is a drastic move but he understood the reason behind it.
Nonetheless, he said the RM2 million requirement is necessary, noting that many properties in the George Town Unesco heritage zone had been bought by foreigners.
"I think that this is less restrictive and onerous on foreign buyers because it is just a cap level and not an imposition of a high stamp duty," he said.
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