Foreigners unlikely to buy properties with ringgit fall, say developers

Penang Real Estate and Housing Developers' Association (Rehda) chairman Datuk Jerry Chan said the exchange rate would affect foreigners’ decisions to buy properties in Malaysia. – The Malaysian Insider file pic, January 9, 2015.The fall in the ringgit is unlikely to attract foreign buyers to snap up properties in Malaysia, said the Penang Real Estate and Housing Developers' Association (Rehda).

Its chairman Datuk Jerry Chan said foreign buyers would exercise caution rather than buy properties in Malaysia right away just because the exchange rates favoured them.

He said foreign investors would wait until there was stability in the ringgit.

"Now there is no stability yet. If there are concerns that foreigner buyers will cause property prices to increase, I think we will not see that happen.

"We won't see an immediate effect like that since they are not coming in right away," he told the media at the Penang International Property conference in Penang today.

Chan said local buyers would still buy properties at the same value of the ringgit and would not be affected by any exchange rates.

According to Bloomberg, the ringgit fell to 3.5862, the lowest since July 2009, and has lost 2.4% this year. The fall of the currency follows the drop in oil prices, which puts pressure on the Malaysian government's fiscal deficit target.

Chan also said people looking for properties could still find homes selling at affordable prices under RM400,000 on Penang island and under RM250,000 on the mainland.

In Penang, the ceiling prices for affordable homes are set at RM400,000 and RM250,000 for the island and Seberang Prai respectively.

Meanwhile, local government exco Chow Kon Yeow was asked to comment on the high density issue in the state, which has been blamed for causing congestion.

It has been a major concern among residents and non-governmental organisations in recent years that certain areas on the island have had an increased density from 30 units per acre to 87 units per acre.

Chow said that the policy allowing higher density in certain areas was because the state wanted to ensure enough affordable homes to cater to buyers in Penang.

"For developers to be able to build affordable homes while keeping to the ceiling prices fixed by the state, the projects must also be made sustainable, and that is by building more units," he said.

He added that the higher density policy might not be a permanent policy once the state had enough affordable homes to go around.

It was reported that the Penang government planned to build about 50,000 affordable homes in the state, with nearly 20,000 to be built by the state-owned Penang Development Corporation (PDC) in Batu Kawan on the mainland and on Jalan SP Chelliah on the island. – The Malaysian Insider