The Penang Gerakan secretary Oh Tong Keong has disclosed that businesswoman Phang Li Koon, the former owner of the Pinhorn Road bungalow that was sold to the chief minister, had bought an old shophouse in Lorong Selamat.
Unfortunately, he did not reveal when this property was bought and at what price. This would have been very useful information.
But in contrasting the purchase of this property to the sale of the Taman Manggis land, Oh had contended that the price of the Lorong Selamat property was RM910psf against RM232psf for the Taman Manggis land.
How he arrived at RM910psf for the Lorong Selamat property remains a mystery because the purchase price of the property was not mentioned. Neither have we been told when this property was purchased.
What is baffling is Oh’s logic in calculating the cost of the land on which this property stands. It would appear, according to Oh’s logic, that Phang paid only for the land. There was no cost attributed to the shop-house. Was the shophouse building thrown in as a gift without any cost? Was the owner only selling the land on which this shophouse stands?
Normally, when a house is bought from a developer, the price of the house does not specify the cost of the land. It would only state that the house measuring so much in area and erected on the plot of land identified is being sold at a certain price.
No one takes the price of the house and then calculates the cost of the land based on this sales figure and announces that the price of land psf is the actual cost of the house that was bought. In other words, no cost is involved for the purchase of the house – you only pay for the land.
This is what Oh means when he claims that the land value of the property in Lorong Selamat was RM910psf. This is a meaningless claim and a ridiculous way to calculate the transaction.
People pay for the property as a whole – the land and the building. The location can be an important factor in determining the value of the property.
The Taman Manggis land was an empty piece of land with no structure or building on it. There was no added cost for any property standing on this piece of land.
We have two contrasting issues – a shophouse and an empty plot of land. How do you compare the prices of these two properties?
If there was no shophouse on the land and this land was sold for whatever price, then perhaps we can compare because of the close proximity of these two properties. But this is not the case.
Most Malaysians will tell Oh, “Be sensible – don’t be ridiculous!”
Aliran executive committee member
5 April 2016