Penang market overview
Just last year a Singaporean property entity, which could obviously see the value in Penang’s shophouses, bought over 400 of them in one swoop. Unrenovated shophouses here on average, depending on the area, sell for around RM1.5 million (US$350,000). In Singapore, a renovated shophouse, of a similar size, would sell for up to of RM18 million (US$42.3 million). An investment of 400 shophouses is quite a statement for an international investor, and ultimately sets a bullish tone for the future of the Penang property market.
This caused the Penang Government to try and slow foreign investment by placing a minimum investment floor of RM1 million (US$230,000) for condominiums and RM2 million (US$470,000) for landed properties. However, these regulations didn’t have the desired effect – as foreign real estate investors continue to flock to the state. Penang is far too attractive, and the Malaysian ringgit, far too cheap.
Penang is a small island, and landed properties will always be sought after. After all, there is only so much land available. And given time, it should always go up in value. And as long as the island continues to grow economically – and signs for continued growth are good – then the similarities to Singapore and Hong Kong just cannot be ignored.
Singapore and Hong Kong are both banking centres of excellence and industrial ports. Penang is one of Southeast Asia’s busiest ports, and the most sought-after industrial zone in Malaysia. Furthermore, the island’s industrial zones are expanding at a rapid pace across to the mainland, with some very large international companies vying for the land is currently available.
This is good news for the Penang property market, both commercial and residential. After its rapid rise in 2008, largely due to its UNESCO heritage listing, it plateaued in 2014. Property prices declined in 2015, plateauing at a lower level in 2016. Now, however, new luxury condominiums are selling quickly, while older ones are attracting new buyers who know value when they see it.
A good example of this is The Cove and 1 Tanjong, two condominium complexes in Penang’s ritzy suburb of Tanjong Bungah. This is one of the most popular areas for foreign investors. Landed houses here sell for up to RM6 million (US$1.4 million), while its beach houses, of which there are only a limited number, can sell for upwards of RM20 million (US$4.66 million) each.
Captains of industry and retirees proudly call this area home. It’s also a good area for families, with numerous cafés and restaurants all within walking distance of both condominium complexes. And DLAT, an acclaimed international school, is just down the road.
The Cove was completed in 2007. And with just one apartment per floor, these 6,000-square-foot beachfront condominiums offer unlimited sea and hill views. Two swimming pools, a state-of-the-art gymnasium, tennis courts, sculptured gardens; 24-hour security and covered parking complete the scene. Additional facilities include a wading pool and a BBQ area where you can privately entertain up to 50 friends. These apartments sell for as little as RM2.5 million (US$580,000). A similar apartment in Kuala Lumpur, in a similar neighborhood, would cost double that amount.
Right next door to The Cove is 1 Tanjong. Similar in size and design, these condominiums were completed in 2017. These new luxury condos sell for RM3.8 million (US$890,000). A 1 Tanjong penthouse, some 18,000 square feet of shining marble and polished steel, sold recently for RM20 million (US$4.66 million).