Tag Archives: property price

Is Property in Penang Still Affordable?

Scarcity of land has caused to the escalating prices of housing in Penang. The current average condominium price on the Penang island itself is RM450,000 while the median household income is RM52,884, which is equivalent to RM4,407 per household (Source: Penang Monthly, 2012). In fact, the house prices on the island have increased by 50% over the last 5 years.

However, the middle income groups have not experienced an increase in their wages, and the cost of living continues to rise on yearly basis, which biting into any income growth. As a whole, the ratio for Penang state is 5 (RM265010/RM52884), which has been risen from 4 in year 2006.

In comparison, the house price-to-income ratio for US was 3 until 2000, and it rose to 5.8 by 2006, before the subprime crisis. In UK the ratio reached 11 in 2008, just before the credit crunch. The above figures are obtained from October 2011 research on ‘Supply and Demand in the Penang housing market: Assessing Affordability‘ published by Penang Institute.

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Will Penang Property Price Continues to Shoot Up?

Nowadays, the property price in Penang Island is far beyond the normal working adult can afford. We also know that lowering down the house price is not going to happen in Penang due to the building construction cost and the land cost has been increased tremendously recently.

penang property price

Land is definitely limited on the island and when there’s still lack of control of foreigner’s investment. Then, what we will get is the property price keep on shooting up uncontrollably which in the end middle income group will not be able to buy any house in Penang.

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