Is it a good time to buy properties in Penang?

Article by Freemen

It’s amazing how property prices in Penang, especially on the island, has raisen, in the past couple of years. Since the 1st quarter of 2010, Penang has experience an increase in the property prices at a fairly higher percentage than in the past.

The STAR newspaper recently published a front page article stating that property prices on Penang Island have increased by at least 25% in the past 5 years, from 2007 to 2012.

The question then arises – is it still a good time to invest into the properties in Penang? If so, do we invest into developer market, sub-sale market or even, the auction market?

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As there are many angles to the question alone, I will answer it in from the investment perspective.

The answer is a resounding “Yes”, it IS still a good time to buy properties.

Why?

Let’s look at Penang Island as a corporation. Based on an article published late last year and information from MPI (Malaysian Property Inc) and InvestPenang, Penang has received a total of RM12.2 billion worth of capital investments in 2010. Penang is also top on the list in terms of attracting foreign direct investments with a whopping RM 17.7 billion or 28% of Malaysia’s total foreign direct investments (FDI) of RM63.2 billion in 2010-2011. In addition, Penang Island sits high on the world ranking for the places to see, making it a key tourist destination in Malaysia. Penang Airport is also now the 2nd busiest transit point, after KLIA, whilst Penang Port is the 3rd largest cargo seaport in Malaysia.

Congratulations to Penang. Penang have done exceptionally well in the past years. The Island is definitely on the radar of both the local and foreign investors – making it the choice investment location for growth & development in various industries, ranging from manufacturing to tourism.

If we look at a purely performance aspect, one might even say that the increase in property prices are in tandem with the economic growth of the island.



With the current economic growth trend observed in Penang (both on the Island and mainland), Penang sees no sign of slowing down. The only concern would be the external or world economic health, which, one might say, hangs on a fragile balance.

Extrapolating Penang’s growth, and in anticipation of the 2nd link’s opening, which is expected this year, my bet is that, the economic outlook will continue in its upward pattern. This will only mean that housing, being an integral part of things, will continue to be in demand. The influx of both local and foreign migrants will continue to add into the demand for housing both on the island as well as the mainland.

As an investor, and perhaps even a home owner, I would say that property prices in Penang still have good room for growth. I would definitely invest into properties in the current market, with a big possibility of the prices continuing to soar. However, I would also like to caution investors to study the market and understand where the good buys are. Investing is also a calculated risk. The more knowledge you have, the lesser the risk. As prices of properties in Penang are already on the high side, I would also advise investors, especially those that are just coming into the scene to play the game wisely, and not fall emotionally into the deals.

It would then be imperative that we understand the different dynamics in play in the different property market – developers, sub-sale and auction.

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While making money is good, I want to highlight the reason why I advocate people to invest. It is not only for the profits, but it is to ensure your financial security in your golden years. Investments are always for the long haul and should never be shadowed by short term gains.

Happy Investing

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