Jump in Penang property prices

The most significant feature in Penang's property market last year was the marked increase in prices in some established housing areas on the island, with single storey and double-storey terraced houses breaching the RM580,000 and RM800,000 respectively.

Double-digit price and rental hikes were noted throughout the state in established housing areas, the Valuation and Property Services Department says in its Property Market Report 2010.

The situation in Penang is a general reflection of the mood of the overall market in the country, with Putrajaya recording a two-fold increase in the volume from 170 units in 2009 to 337 units last year. In ringgit terms, Putrajaya sales saw a three-fold increase from RM88mil to RM375mil. It should be noted that Putrajaya is beginning from a low base, being a relatively new area.

Klang Valley prices and volume of transactions were also robust last year. The only state which experienced a soft market was Labuan, while Malacca saw very marginal growth.

Going back to the situation in Penang, as with other states, the residential sub-sector dominated market activity, capturing 70.2% of the market share, followed by commercial sub-sector with a distant 11.9% share of the market. While agricultural and industrial sub-sectors enjoyed growth, it was the residential sector that saw major movements last year.

On the island, single storey terraced houses in Green Garden recorded an increase of 16.5%, ranging from RM455,000 to RM550,000. Similar houses in Jalan Van Praagh were transacted at a higher range of RM530,000 to RM580,000. Bandar Bayan Baru saw both its single and double-storey terraces charting gains of 16.1% and 20.2% to record RM275,000 to RM340,000 and RM403,500 to RM490,000 respectively.

According to the report, its proximity to Sunshine Square shopping complex, Suntech@Penang Cybercity office blocks and being adjacent to Penang International Sports Arena gave it the extra edge.

Other locations which had notable increases were in Taman Sri Nibong, Taman Sri Mewah and Taman Sunway Banyan. Houses in Taman Sunway Banyan went as high as RM750,000. Other popular areas were Island Glades and Island Park, recording sales between RM560,000 and RM800,000 for its residential units.

In Seberang Perai on the mainland, prices of landed residential units also recorded positive movements, particularly Taman Bertam Perdana (B), Bandar Putra Bertam. It should be noted that prices in Seberang Perai Utama are also gradually moving up.

While landed units recorded a general trend of double-digit growth, high rise residential units are not to be left out. Prices of upscale condominium by the beach increased by 3.6% to as high as 22.2% in Sri Pantai/Gurney Beach Resort Condominium.

In the rental market, growth was recorded in Green Garden and Taman Lip Sin, with rental rates seeing an increase of 12.5% and 11.1% respectively. In the high rise segment, rental growth also saw an uptrend. Two-bedroom flats in MaCallum Streets and three-bedroom flats in Mutiara Heights, and George Town city centre recorded 9.4% and 9.1% increases respectively. Prices of shops were stable with isolated increases noted in choice locations. Since the inscription of George Town as a World heritage Site by Unesco in 2008, the number and value of pre-war shops' transactions have increased. Institutional buyers have been actively buying up commercial lands in George Town.

Overall, Penang enjoyed a total of 25,986 transactions worth RM9.37bil last year, an increase of 14% in volume and 43.5% in value against 2009 (22,724 transcations worth RM6.53bil). It was one of several top performing states both in terms of value and transactions. - By Thean Lee Cheng (The Star)


April 23, 2011 at 12:01 PMlim

Just delay your purchase if you are not in urgent need.

Almost all the 5/95 projects are out into the subsale market.

It is a glut now. The speculators will start to feel the burden after paying interest for 6-12 mths.

April 24, 2011 at 4:21 PMTIMAS

5:95 is significant for bank also confident Penang property will raise or stable/ sustain. Bank will not bear the risk like what happened in US.

April 24, 2011 at 8:09 PMcondomana


I am still trying to figure out what the heck you were trying to say!..:))

April 27, 2011 at 12:15 AMkucing

Bubble building up in penang property ?

will it be burst sooner or the bubble will get even bigger and bigger .....

April 27, 2011 at 1:31 PMdnsh

Typically bubble only burst when u dont expect it to happen. My guess is around few more years down the road. By then maybe the property price already sky high.

Example, a property worth rm500k now, few years later it appreciate to around rm800k. If the bubble burst then and adjust the value to around rm600k-rm700k, you are still gaining.

Dont wait for the bubble to burst, because you never know when it is going to happen. In fact, you might not be to catch any good value property by then due to the capital appreciation over the years.

Just go for it if you find the property u like and can afford for it.

Even if it burst now, as long as your property is located at good location, the price will still catch up over the years. You just need to have the holding power.

April 27, 2011 at 1:54 PMkucing

dnsh, well said :- "bubble only burst when you don't expect it to happen !"

Seems like everybody, investors, speculators, experts etc... are all at the state of "not expecting it to happen" right now !!

Everybody is still thinking it still have years to come ...
The only thing need to safeguard is... whether the economic crisis in US is really over or they will punge into 2nd dip (where it is also sth "nobody can expect it to happen" ) !!

April 27, 2011 at 3:09 PMdnsh

haha, time will tell us the answer. Stay tuned! :)

April 27, 2011 at 4:40 PMpockaroo

"You can't be wrong if you are not long" - it is exactly this mentality that can keep property prices buoyant and perhaps for quite a while.

At the end of the day, fundamentals such as demand/supply and affordability must sync with house prices.

For high end developments the "build it and they will come" mentality is only sustainable as long as demand from foreigners is there. Malaysia is not the only country in the world that competes for foreigner dollar and investments.

For entry and mid range developments, it has to sync with affordability, the willingness to take on bigger debt load and the ability to get bank financing.

There is only so much one can harp on land scarcity on Penang island. At the end of the day fundamentals cannot remain out of sync with reality forever.

April 27, 2011 at 5:10 PMkucing

In fact, i sense that penang property is entering a crazy + fenzy state where I see owners of well located properties are holding up in sale and purchase transaction and don't even want to cut a single cent during negotiation !
If the buyer just hesitate for a moment, the property will be gone !! Or rather the seller will get 20k extra if he/she hesitate and open up for more offers !!

Recently I just heard from a regular auction property investor that a landed property in Ayer Itam (land area = 3000 sq ft +) with old rundown building WITHOUT vacant possession could be bidded up to 1.7 millions (reserve price 900k) in auction with tonnes of bidders !!

If you don't call this crazy, I don't know what it is ?

April 27, 2011 at 5:28 PMkucing

I even learn that not only foreign monies (Singapore, Hong Kong, Taiwan, US, Europe, even Middle-east etc) are pouring into "goreng" penang properties, even local funds from other state such as K.L., Kedah, Perak, or mainland like butterworth, B.M. are coming !
The reason very simple, especially those rich people form Kedah, Perak, B.M. Butterworth or even ulu ulu kampung, since they can't see good returns investing in their local properties, they rather swap their monies and invest here !

It is like share market, money only chasing those investment which can give good returns (as they believe) !

April 27, 2011 at 10:06 PMkoktiong

I heard from developers that there are many KL people come to Penang to buy properties now. KL properties are too high because many plantation owners from Sabah, Timber taiko from Sarawak, Hong Kong and Taiwan investers flow in to buy KL properties.

If this is the real case, will you think Penang properties price will go down ?

April 27, 2011 at 10:12 PMgemini

dnsh, totally agreed with u.

" Just go for it if u find the property u like & can afford to buy. Just nid to have the holding power."

April 28, 2011 at 12:30 AMcondomana

If you are buying for long term own occupancy, why worry about the short-medium term price fluctuations, as long as you live happily in that prop, and can continue to service your mortgage until end of term. Furthermore, historical data has evidently showed that property prices always trend up over the long term.

But if you are buying for investment, then you should be very careful with short-medium term price fluctutions as that affects your ROI. You do not want to be the dumbass who's stuck with a property with an over inflated price tag, of which the price is going to be stagnant for the next 5-6 years (and with super low rental yields). You could have allocated your money in other assets for much better returns.

Hi kucing,

You are right. It's madness to pay RM1.7 mil for a 3000sqft landed property in air itam (by the way, you don't even have to pay that much in tanjung bunga/tokong). For own stay maybe ok, coz after 10 years you can still declare to your friends that you didnt loose money on your dumb investment..:)) But if that's bought for investment, money down the drains i'm afraid!!

Properties in Penang is very illiquid. You can't escape fast when things start to turn bad. I am sure there are better things to invest in (which offers the same leveraging capability as properties) somewhere else, you just have to think hard enough to figure it out...;)

Go revisit (or go take a short course on) 1997 asian financial crisis. Time for some history classes!

Hi pocharoo,

I agree with you. Price must sync with fundamentals. Everyone knows that. But it's the same old greed and fear thingy. No matter how much things are over valued, people just cant stop buying during the bulls. And no matter how much things are under valued, people just refuse to buy during the bears....:))

Happy investing everyone!!

April 28, 2011 at 9:24 AMAnonymous

Bubble? I don't think so, not much people are KEEN to sell off their properties, it's just agents which pulling their property into the page, which seems to be bubbling soon, but I don't think so. People doesn't mind dumping a portion of their income which doesn't affect them into property, and property will only bubble UNLESS there are too much of keen sellers

April 29, 2011 at 5:56 PMFREETHINKER

I have been following this forum since 2009 and there were uncountable time that doomsayer, pessimists and critics pour cold water into Penang properties, yet all of them fail to prove their points up to now. In fact there are some readers started to regret for listening too much negative comments too early that they drop their balls.

Well, bubble of course is a potential risks if not manage properly. There are some sign of creation on pockets of bubble in non-prime area and condos in Island.

But please don’t just look at Penang property from inside and on property market alone. Penang is unique and we are supported by industrious people who work hard and smarts.

Many ambitious people here always look for upgrade to bigger condo and landed house. Then new batch of workhouse would buy smaller one sold and the cycle continues with our strong job demands here. The spirit of making it better living for family keep us up. Don’t forget we have many outstation people who relocate here too. Then the question are the job market expanding or stagnant? Are people getting pay rise?

The demand is ever so strong especially in landed properties while new supply is too limited. Existing owner also hardly put on sale. Don’t be mistaken by the website listing as the agents like to repeat and same property being advertise >10 agents. Please go around the existing housing area to check out how many you can find put on sale. Even there is the price is higher side.

Please learn to look from outsider perspective, compare our self to other Asian cities. We are in the top10 Asian cities but among most affordable for living! You can also do some research on Penang economy from well known magazine.

The influx of KL based developers like SP Setia, IJM, Mahsing, Bolton and handful others should able to tell you some ideas....

Please see this link from YAHOO, TIME magazine, THESTAR and many other international reviews on Penang. You will then realize the value of Pg properties. Benchmark and analyze it by calculator not just rumors. You can also get some research from this relatively new magazine called PENANG ECONOMIC MONTHLY, especially its April11 issue. Just RM10 worth to invest. I used to get lots of info and real published data.

You will know why we are so much better and foreign investor view on us.

Timely feature on Penang as a choice MNC destination

April 29, 2011 at 6:21 PMkucing

Free Thinker,

Are you suggesting Penang Property price will jump UP further in a few years time ? (as most "experts" & developers (they always do) say )

This is really a multi-billion question concerns most of Penangites !

April 29, 2011 at 11:52 PMFREETHINKER

Long term for sure ...up!
We are in Island with so many good things.
For short term please choose good location. Dont choose the type of property that is over supply.