It’s hard to resist the old-world charm that Penang has to offer. From the quaint boutique hotels along Armenian Street to the Peranakan shophouses, time appears to have stood still on this island that is home to many well-preserved colonial buildings.
The only clue that modern times have arrived is the towering skyscraper of KOMTAR that has become a landmark of Penang. Since Georgetown was listed as a UNESCO World Heritage Site in 2008, the island had undergone a sort of cultural renaissance that marries the old and the new, yet retaining the unique flavour that is distinctly Penang.
Think local flavours like P. Ramlee and Jimmy Choo that have continued to resonate with the younger generation at trendy cafes and via street art.
ARTS FESTIVAL EQUALS BIG BUSINESS FOR TOURISM SECTOR
What has upped Penang’s hip quotient appears to be the annual George Town Festival that has become a major tourism highlight. Launched in 2010, in honour of the city’s listing by UNESCO, this arts event takes place during the entire month of August.
It features a mostly local ensemble with cultural activities ranging from experimental visual arts installation to theatre. Interestingly, this has brought about a spillover impact on the streets with colourful murals and caricatures made of metal rods that adorn the many old shophouses in the artsy district of Georgetown.
Old shophouses, in Georgetown are now being converted to quirky boutique hotels, cafes and backpackers lodges. So much so that Penang was listed on UK’s The Guardian as number 8 in the Top 40 global destinations in January 2014.
As a result, it has given this historic city a new lease of life and turn it into a hip, bohemian enclave drawing an eclectic mix of trendy locals, well-heeled tourists and budget travellers to check out what the buzz here is all about.
According to the latest available data from the state tourism board’s website, Visit Penang, Singaporeans accounted for the top visitor arrivals at 12.9 million followed by Indonesians and Thais at 2.4 million and 1.4 million respectively in 2009.
Penang is also one of the top retirement destinations among foreign retirees under the Malaysia My Second Home Programme. According to Tourism Malaysia, since March 2013, more than 21,000 applicants have been approved.
HOUSING “SEVERELY UNAFFORDABLE”
Penang’s unique geography and its attractiveness as a property investment destination have contributed largely to the price spike that the island had experienced over the years.
According to data from National Property and Information Centre (NAPIC), Penang has the second highest price index in Malaysia after Kuala Lumpur.
The price index has been rising steadily by approximately 50 points to reach almost 150 points since NAPIC started tracking the data from the first quarter of 2000.
A recent study published by Khazanah Research Institute (KRI) had shown that housing in Penang is “severely unaffordable”.
The report called “Making Housing Affordable” showed that Penang has a median multiple affordability of 5.4 points based on a monthly median income of RM4,702 and market median price of housing at RM169,272.
The median multiple is a measurement of how affordable the housing market as a whole is. Anything above 3.0 points is considered unaffordable. Therefore, with a median multiple affordability of 5.4 points, properties on the island are by no means affordable for locals.
TARGET AREAS FOR LOCALS
For those wanting to buy your first home, I would advise to study the Penang Transport Master Plan (PTMP) and look into outlying areas dominated by locals.
Usually, such areas will see less volatile price fluctuations. Subsequently, you should narrow down to areas that will be served by the Light Rail Transit (LRT) station.
Under the RM27 billion blueprint, Penang’s LRT system will begin in 2016 and will run from Penang International Airport to KOMTAR in Georgetown. In my opinion, the industrial area of Bayan Lepas provides the most potential as the average prices here ranges from RM550 to RM800 per sq ft. Bayan Lepas is home to the Bayan Lepas Free Trade Zone where it is a manufacturing hub for multinational companies ranging from Sanyo to Osram.
There is a planned LRT station in Bayan Lepas and a 25km expressway linking it to Tanjung Bungah. This will help to unlock the capital values of homes in this area once the projects are completed.
For those who qualify, there is the federal initiated PR1MA project to be launched here. This affordable home will target the low to middle-income households. As such, they will be launched at an affordable quantum price, well below the market per sq ft pricing here.
Bukit Gelugor is the new hot spot as it is located near the Second Penang Bridge. This suburban area is very much driven by locals and will be served by an upcoming LRT station. Asking prices for apartments here range from RM500 to RM550 per sq ft. Affordable housing in the pipeline includes a PRIMA project that will be launched below the market per sq ft pricing. There is currently no indicative price.
For those who are priced out of the housing market in Penang Island, you should target the new growth areas near the second bridge on the main peninsula. Since the second bridge was announced in 2006, land prices in Batu Kawan and Seberang Prai have moved up from RM8 per sq ft in 2006 to RM50 per sq ft this year, data from Henry Butcher showed. Affordable housing in the launch pipeline in Batu Kawan includes those by the state government called Penang Affordable Housing Scheme. However, do note that there are no plans for the LRT line here.