I refer to the report in The Star today entitled ‘Singapore sweep continues’.
It should be noted that the Penang State Government had acknowledged the fact that due to the depreciating Ringgit, foreigners possess a stronger purchasing power. Bulk buying by them could possibly cause an unnatural increase in property prices in Penang due to speculative activity.
Having that in mind, the Penang State Government introduced several measures to control purchases of properties by foreigners in Penang. In this regard, it should be noted from the 1st of July 2012, foreigners are only allowed to purchase landed properties costing not less than RM2 million on the island, and not less than RM1 million on the mainland. Whereas, for stratified properties (apartments), foreigners are not allowed to purchase properties costing not less than RM1 million both on the island and the mainland. The price cap for stratified properties which foreigners are allowed to purchase on the mainland, was fixed at RM500,000.
Further to this measure, since April, 2014, foreigners were subjected to an approval fee of 3% on top of the purchase price of the properties purchased by them.
The statistics from 1st July, 2012 shows that these measures have indeed caused for purchases of properties by foreigner’s to reduce gradually until June, 2016.
In any event, it should also be noted that the total numbers of purchases of properties by foreigners falls far short from the total number of purchases of properties in Penang. Further, foreign purchases have declined by more than 50% compared to 2013.
The Penang State Government will always conduct a periodical review of its policies, including the measures put in place to control purchases of properties by foreigners as stipulated above.
As regards concerns by conservationists, it should be noted that the Penang State Government gives paramount consideration to the inscription of Georgetown as UNESCO World Heritage site on the 7th of July, 2008. In this regard, the local authority, in particular, the Penang City Council imposes stringent conditions in the manner in which such heritage buildings can be restored so as not to fall foul of the equally stringent conditions imposed by UNESCO. As such their concern would appear to be unfounded.
The other concern raised is the displacement of intangible cultural heritage, namely tenants residing in those premises who are forced to move out due to sky-rocketing rentals charged by the new owners of these properties.
Where this is concerned, the Penang State Government has recently announced that it intends to reintroduce rent control, namely to control the extent of increase in rental charged, for pre-war heritage houses in the Georgetown UNESCO World Heritage site.
Towards this end, we will embark on a two pronged fact-finding mission, namely (1) to ascertain the legalities of doing so; and (2) to ascertain the actual numbers of units affected by this alleged concern, and to obtain feedback from all stakeholders ranging from the owners and tenants of these properties.
It is hoped that this fact-finding mission will be completed within a reasonable period so as to enable the Penang State Government to make a decision on the proposal to reintroduce rent control for such pre-war heritage buildings within the UNESCO World Heritage site.