’s Top 5 Real Estate Predictions For Penang

 Picture of the blue mansion, penang

Penang is perhaps the most dynamic property market in Malaysia outside the Klang Valley (with the Iskandar region catching up quickly). According to government data sources, real estate transactions in Penang grew 20% and 26% in terms of volume and value from 2009 to 2011, and this trend is set to continue given the strong fundamental demand in housing, a booming economy and affordable mortgage rates. In fact, some RM6 billion worth of property transactions were recorded in 2012 in Penang alone.

So what’s in store for Penang for the rest of 2013 and beyond? Without further ado, we bring you…’s Top 5 Real Estate Predictions For Penang

  1. New opportunities will cluster around the second Penang Bridge. Scheduled for completion in the second half of 2013, there will be opportunities around the areas on both the island and on the mainland, particularly the interconnection between the bridge and the highway.In particular, the upcoming Ideal Vision Park will benefit from this since the bridge connects up Batu Maung with Batu Kawan in the mainland.
  2. Properties affected by the master transportation plan will get a boost in capital appreciation. Look out for the proposed highways in the “Penang Transport Master Plan” (see this). In particular, watch out for the areas connected by these new roads:-
    • Undersea tunnel linking Bajan Ajam and Persiaran Gurney (6.5km)
    • Road linking Tanjung Bungah and Teluk Bahang (12km)
    • Bypass road linking Persiaran Gurney and the Lim Chong Eu expressway (4.2km)
    • Bypass road linking Air Itam and the Lim Chong Eu expressway (4.6km)
  3. Niche properties continue to show tremendous growth in capital appreciation. Pre-war real estate is perhaps strictly a Penang phenomenon; “antique” shop houses in Georgetown have been the target for Singaporeans and Hong Kong investors for about a decade now. Asking prices now are at a hefty RM1,200 PSF (comparable to upper tier of KLCC condominiums), doubling up from RM600 back in 2010.

    Chart of Penang property prices

    Penang luxury condominiums are on the rise in prices

  4. The luxury niche catches up with PSF rates reaching Klang Valley levels. Upmarket condominiums like the Infinity Beachfront and Springtide Residences are now breaching the RM800 PSF asking price, with the Regency and Skyhome fast reaching RM600 PSF. These rates are still low-ish compared to apartments in the KLCC enclave (and perhaps comparable to Mont Kiara), but given the current rate of capital appreciation we could see the RM1,000 PSF level being breached in two to three years’ time. Or perhaps branded residences will debut in Gurney Drive or Batu Ferringhi. 🙂
  5. New launches are trending towards integrated developments (similar to what we are seeing in greater Kuala Lumpur). Light Waterfront, Penang World City, Straits Quay. These are “all in one” developments which promises everything in one place; more on this later.

Bonus “No Shit, Sherlock” Prediction #6: Prices Will Continue To Rise (With An Upheaval In The Rental Market)

Penang registers a booming population, with about 35% of its population belonging to the “property buying age bracket” of 25-44. The housing demand will continue to be robust, but supply doesn’t seem to be in tandem with the rising demand which means that the price hikes will continue. Outside the Klang Valley, there’s tendency for developers to focus more on the Iskandar region, and this is understandable – there’s an inherent shortage of large tracts of land in Penang for new developments. In terms of scale and ROI, Iskandar is hard to beat.

Landed properties in Penang (in particular, terrace homes) have outpaced the others in terms of capital appreciation in 2012. We have seen some bungalows in Tanjung Tokong appreciating by some 40% in the span of three months. High rise apartments are lagging slightly behind, with some condominiums registering as little as 6% in terms of capital appreciation in the same time.

The rental market will therefore face an upheaval. Rental rates curiously stayed rather flat in 2012. However, the escalating prices driven by speculation and foreign investment may deter home buyers who would then opt to rent instead.

Integrated Developments In Penang – The Way Forward

Light Waterfront, IJMIJM’s high profile Light Waterfront project is making waves (pardon the pun). This integrated development will host a couple of hotels, a shopping district as well as some condominiums and bungalows over 100 acre of prime land. Being next to the Penang Bridge and off the Lim Chong Eu expressway, the location is arguably one of the best on the island – and that’s no exaggeration. This megaton hundred trillion project (OK, RM5 billion) will take some eight years to build.

Ivory Properties together with the Tropicana Corp are building a rather large integrated development in Bayan Mutiara (1,000 acres!) imaginatively named the Penang World City. E&O (upmarket developers behind the E&O Residences in KL city as well as Dua Residency in KLCC)’s Straits Quay is also generating some buzz. Asking prices for the serviced apartments (dubbed The Suites At Waterside) have also breached the RM1,000 PSF level – which positions it right at the top tier of Penang properties.

The 87-acre Southbay City development by Mah Sing in Batu Maung is also set to capitalize on the opening of the second bridge with a hotel coupled with retail, offices and residential suites. There are also plans in Sungai Ara by Ideal Property (the developers of the Ideal Vision Park) and also some condominiums to be built by SP Setia.

All In All…

We are pretty optimistic about Penang; the current bull run will set to continue with the slew of infrastructure projects coupled by healthy demand stimulated by the growing economy and population growth. However, as with the rest of Malaysia, the disparity between income and property prices will continue to widen unless supply is ramped up to cope with demand (which is rather unlikely as more developers are focused southwards on the Iskandar region). This spells trouble for the genuine home buyer. 🙁


For the seasoned investor who is considering Penang will do well by selectively looking at properties within these considerations:-

  1. Upcoming areas boosted by the upcoming highways and the second bridge
  2. Landed properties for capital appreciation
  3. High rise apartments to be rented out to take advantage of the upcoming upheaval of the rental market
  4. Niche opportunities in the form of pre-war shophouses; although it might be advisable to wait for the “price wars” to cede to a somewhat manageable level. Watch out for Penangites bearing Singaporean dollars as we have mentioned in Part 1 of this guide.
  5. Integrated developments which are poised to be the future of Penang 🙂

What else you need to know?

About Khai Yin

When I am not writing for and helping my readers find properties though the DealMatcher service, I spend time doting on my three kids: Wenyi, Qinyi and Eian. My personal stuff, some published essays and contact details can be found at


  1. Raymond Fong says:

    Penang has perhaps 20, 000 jobs awaiting applicants. If you drove to Penang you see land being opened up before you even reach the island, signalling hope. Consider how many international flights land on Penang a week. The Unesco factor will make Penang popular too. Penang is smaller than Singapore and probably smaller than Hong Kong, with common law and English speaking. So land is even scarcer. Yes, Penang have a lot going and bright future, and property will continue to escalate. I bet on gated and guarded landed properties because it has land and security which is sufficient, really.

    • Peter Ortmann says:

      Dear sirs

      Before you talk of development and housing projects you should consider and invest in the basic infrastructure. Massive housing is planned in a tourist belt such as batu ferringhi. Not only high rise apartment blocks do NOT attract tourism but the road network us simply to in place. There is already a glut in upscale apartment blocks and there is plenty to choose from.

      The airport is a bit of a joke and international flights are a few unless you want to count Krabi and Medan
      As a major destination. Georgetown has too many broken up houses yet to be restored and frankly there is very little here that does attract quality tourism. I do like living here but above comments are a fact.

      Traffic needs to be policed as too many drivers ignore traffic lights. Speeding is another health hazard and speeding tickets should be linked to insurance for cars and other vehicles. The more penalties the more insurance cost.

      Rgds p ortmann

  2. Hear from the man himself, Chief Minister Lim Guan Eng, on why it may be a good idea to invest in Penang real estate:

  3. mr. ortmann is fully agree; plenty high end properties EMPTY. the socalled foreign buyers are and will not be there at these ridiculous overvalued prices. if you invest now you might need 15 years to recover the byuing price.
    the socalled tourism industry is 90% internal tourism from KL and surroundings. the international tourist arrival are donimated by Indonesia,Bangladesh,etc. which happen to be the biggest suppliers of foreign unskilled labour.
    you can not find a proper and clean beach in Penang! the upgrade of the airport makes it just a regional hub with 25 years old proton taxis waiting to bring u to the hotel. every encouraging!!
    mr rui: you should wonder why the developrs association propased the wife of Eng to be a board member. although she rejected the offer; think twice……..the association expect something when they proposed her.
    of course the government is not developer friendly! ha.ha.ha.

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