Delicious local fares, authentic culture and a slower pace of life are among the draw in the island of Penang, especially among retirees.
Words & photography by Khalil Adis
Two years ago, Penang made a bold move to increase its minimum purchase price for foreigners from RM500,000 to RM1 million for condominiums and RM2 million for landed homes respectively.
The move in the opposition-held state of the Democratic Action Party (DAP) by its chief minister Lim Guan Eng in 2012 was a hotly debated topic as Penang became the only place in Malaysia to impose that ruling.
Many had speculated that the move will likely see waning interest among foreign investors in this island known for its delicious hawker fares.
Fast forward a year later, Prime Minister Najib Razak announced a similar move for the rest of Malaysia during his Budget 2014 speech in October.
His move seemed to mirror closely Penang’s policy but without the RM2 million threshold for landed homes.
Land scarce Penang comprises 293 sq km.
Like Singapore, Penang is experiencing the “island effects” where a spike in property price has been noted since 2008.
According to the National Property and Information Centre (NAPIC), Penang has the second highest price index in Malaysia after Kuala Lumpur.
Since the first quarter of 2008 till the third quarter of 2013, the price index has been on an uptrend, increasing by more than 200 points.
As most of the island is made up of hilly and forested interiors, land reclamation has been the way to go, particularly in the Seri Tanjung Pinang area where Eastern & Oriental Berhad has plans to reclaim even more land.
Foreigners to be blame for rising price index?
The DAP has said its reason for implementing the policy was to ensure locals will not be priced out from the property market.
However, data from Henry Butcher showed that a small portion comprising 2.98 per cent in 2010 and 2.26 per cent in 2011 respectively were from foreigners.
Nevertheless, Penang finally saw its property market softened in the first quarter of 2013.
Data from Henry Butcher showed that the total number of properties transacted in Penang recorded a significant drop of 18 per cent compared to 5,756 in the first quarter of 2013 compared to first quarter of 2012.
Combined with the supply of 367,158 residential units, this had caused price to drop in the first quarter.
The timing of the drop in price index is particularly significant as it was during the general election period where the DAP managed to maintain its seat.
Looking ahead, the property market is expected to soften even further due to the oversupply of 461,844 and 461,844 residential units in 2015 and 2020 respectively.
Where to invest?
If you are a foreigner, you might want to look into popular places such as Tanjung Bungah, Tanjung Tokong, Batu Ferringhi, Georgetown, Queensbay and Gurney.
Prices of condos in these areas can easily fetch above RM 1 million and are geared towards foreign investors from Singapore, Japan, United States and the United Kingdom to satisfy the minimum purchase price ruling.
For example, Boon Siew Group and Katana’s joint-venture project in Tanjung Tokong, The Landmark ranges between RM1,677,500 and above RM3 million for a three-bedroom and five-bedroom respectively.
Over in the popular beachside tourist area of Gurney, SP Setia’s Setia Residences comprises two towers of 48 and 43-storey.
Tower A comprises units with a built-up area of 2,624 sq ft and 4,118 sq ft and penthouse units of 4,593 sq ft and 7,119 sq ft respectively.
Tower B has standard units of 3,158 sq ft and 6,019 sq ft while penthouse units are 5,647 sq ft and 6,019 sq ft respectively.
Nearby amenities include Gurney Paragon, Gurney Plaza and Gleneagles Medical Centre.
If you want to live away from the hustle and bustle of city life and near the airport, Trehause by IJM Land is located in Bukit Jambul near the lush acres of the Bukit Jambul Country Club.
Just five minutes away from the Bayan Lepas Airport, it comprises 46 units of condo villas and 26 units of semi-detached villas.
Built on an elevated ground, you can look forward to lush greenery and even your own durian orchard.
Locals and foreigners alike will appreciate MTT Properties and Development Sdn Bhd’s Botanica located in the suburban area of Balik Pulau where fruit farms and a slower pace of life beckon.
Comprising 300-acre of garden township, choose from two to three-storeys semi-detached homes with its own International Boarding School, Commercial Village, Retirement Resort, medical centre, clubhouse and health & spa resort.
To experience the rich culture of Georgetown, Tropicana is offering 218 Macalister located five minutes to Komtar and the many arrays of delicious street hawker fares nearby.
This mixed use development comprises 208 hotel units, 211 commercial suits and 88 units of apartment.
Facilities include infinity pool, wading pool, multipurpose hall, gymnasium, landscaped gardens and 24-hour security.
Information for retirees
Retirees can apply for a long-term visa under the Malaysia My Second Home Programme.
Under 50 years of age:
- Proof of liquid assets of at least RM500,000 and offshore income of at least RM10,00 per month
- Maintain a Fixed Deposit (FD) of RM300,000(can withdraw up to RM150,000 after 1 year for approved expenses e.g. house purchase, children’s education and medical purposes In Malaysia)
- For above RM1mil property owner (cash purchaser) – only need to maintain RM150,000
Over 50 years of age
- Proof of liquid assets of at least RM350,000 and offshore income of at least RM10,000 per month
- Maintain a Fixed Deposit (FD) of RM150,000 or proof of government approved pension fund of at least RM10,000 per month (can withdraw up to RM50,000 after 1 year for approved expenses e.g.house purchase, children’s education and medical purposes in Malaysia)
- For above RM1mil property owner (cash purchaser) – only need to maintain RM100,000
To apply, go to http://www.mm2h.gov.my/
This story was first published by PropertyGuru Singapore in conjunction with the Malaysia Property Show 2014 on 7 June 2014.