GEORGE TOWN: The Penang government’s move to cap the prices of landed properties on the island at a minimum of RM3 million for foreigners will have little impact on the market, the Real Estate and Housing Developers’ Association (Rehda) said today.

Rehda council member Jerry Chan said this was because foreigners mostly invested in condominiums.

“If anything, the landed property prices would include fixtures and furniture to cross over the threshold to qualify for approval under the new ruling,” he told FMT when contacted.

Earlier today, the state government announced its decision to raise the minimum price of landed properties on the island that foreigners can buy from RM2 million to RM3 million.

The minimum price of properties on the mainland for foreigners to purchase remains unchanged at RM500,000 for stratified properties and RM1 million for landed properties.

The minimum price for a condominium on the island remains at RM1 million for foreigners.

The state also announced a reduction of a levy for foreigners from 3% to 1.5% when they buy condos worth RM1 million to RM1.5 million in Penang.

This translates to RM15,000 to RM22,500 in savings.

Chan said landed properties priced beyond RM3 million were located in the more mature neighbourhoods on the island.

For example, he said the upscale neighbourhoods of Pulau Tikus and Jesselton Heights had properties priced beyond RM3 million.

Chan said newer offerings in the price range were located at Batu Ferringhi, Tanjung Tokong and some parts of Balik Pulau as well.

The size of the homes here can be as big as 5,000 sq ft or more.

Raine & Horne International Penang senior partner Michael Geh Thuan Peng said the increased minimum price would not deter foreigners from buying properties.

He said most foreigners purchased properties in primary markets such as Singapore, Hong Kong, Shanghai and London.

Geh said Penang was a traditional “secondary market” for foreigners to purchase properties and the price hike was unlikely to create ripples in the existing market.

“Kuala Lumpur and Penang are secondary markets for foreigners,” he said, explaining that foreigners bought Penang properties due to its livability factor and because it is a good place to raise a family.

“But I feel Penang remains a not-so-hot market for rich people. We are not at the top of that hot list.”

Geh said the price controls introduced by the state government was the right move as they deterred foreign property speculators.

Penang increases minimum price to RM3 million for foreigners