SPEECH BY YAB TUAN LIM GUAN ENG, CHIEF MINISTER OF PENANG
OFFICIAL launch of The Star property fair 2014
SALON IV, G Hotel, Penang
24 JULy 2014 , 11.30AM – 12.30PM
Good morning and thank you for inviting me to launch the 12th installation of the Star Property Fair.
With over 30 local and foreign exhibitors participating this year, including some big names in property development, it is clear that Penang continues to attract keen investors looking for a place in the ‘Pearl of the Orient’.
As one of the most economically important states in Malaysia, Penang has seen a significant growth in population in recent years as more people clamor to seek a better way of life.
This in turn has impacted the demand for properties ranging from medium-cost housing to luxury units. The encouraging business sentiment and growing economic progress is evident around Penang. We do not only see sustained foreign direct investment and local investment into Penang regardless of what those detractors who are blind to the realities on the ground may say.
Many workers in the manufacturing industry are working overtime some compelled to do so. The stronger purchasing power this year of consumers has made sales much better this year than last year. This can be seen by the roaring business in our Bazaar Ramadan which has attracted customers from outside Penang due to the range and variety of products offered.
The opening of Penang’s second bridge earlier this year, which enhanced accessibility and exchange between the island and mainland, is also playing a part in strengthening the resilience of the local economy, literally opening up pathways for more partnerships. The continuing demand for properties in Penang reaffirm the attractiveness of our little state.
With more residential and commercial projects funded by the state government and property developers, there are now more options to cater to the diverse profile and demography of property buyers and investors.
As a responsible government, it is our duty to ensure a balanced and sustainable environment where everyone has the opportunity to call a house a home in Penang. This includes first-time buyers and those who may fall within the lower income bracket.
There is a need for Bank Negara to reinstate Developer Interest-Bearing Scheme (DIBS) for first time buyers for all properties below RM 400,000 to compensate for any negative inflationary impact and higher loan repayments from the increase in interest rate by 0.25% from 3% to 3.25%.
This would not only give less money to spend for existing borrowers of all loans, increase the financing cost for businesses leading to higher prices and also make it more difficult for first-time buyers to get loan approvals. One of the main complaints of developers and first-time buyers is the difficulty of getting loan approvals due to the stringent repayment ability requirements imposed by Bank Negara.
The Penang state government is against any hike in interest rate that would burden borrowers without any compensating measure to help them to repay or service their loans. Reinstating the DIBS for houses below RM400,000 would benefit first-time buyers and promote housing democracy.
The increase in interest rates would have inflationary impact, raise the cost of living as well as dampen consumption spending as more money would be required to service their loans. This would not only give less money to spend for existing borrowers of all loans, increase the financing cost for businesses leading to higher prices and also make it more difficult for first-time buyers to get loan approvals.
On that note, I would like to thank The Star media group for organising this year’s Property Fair.
Good day and have a great weekend.