Prices of properties on Penang island are the most expensive in Malaysia.
Socio-Economic and Environmental Research Institute (SERI) senior fellow Dr Michael Lim Mah Hui said the average house price last year was RM540,000 or eight times the average household income.
He said data from the Malaysia's population and housing census indicated that there was a property glut, which suggests that many people bought property for speculative and investment purposes, thus pushing up the prices further.
In 2000, the vacancy rate in Malaysia was 15.6 per cent from the total of 5.547 million unit of houses, which amounted to nearly 750,000 houses.
He said the percentage was more than 20 per cent now.
"It is not that we do not have the houses. There are. It is just that the houses now are way too expensive and beyond many people's means.
"That is why I say the authorities should stop encouraging the contruction of high-end and luxurious properties," he added.
Meanwhile, Consumers' Association of Penang president S.M. Mohamed Idris said to make housing afforable to ordinary Penangites, the government should start a public housing policy, which provides affordable housing, particularly in urban areas, to cater to those below a certain level of income.
He said a good example worth studying was the Singapore Housing Board model, where the government spearheaded the building of affordable housing for a majority of its citizens.
He added that alternatively, the government could consider doing this in partnership with the private sector. "In short, the government's priority should be to put the needs of the majority of the people ahead of other things," he added. - By Audrey Dermawan (Business Times)