Penang High-End Property Prices Surge by 7% to 10% in 2024 Amid Rising Demand and Infrastructure Developments
Penang’s high-end property market continues to experience significant growth in 2024, with prices rising between 7% to 10% compared to the previous year. This surge reflects strong demand among both local and foreign buyers, particularly in areas like Bayan Baru, Pulau Tikus, and Seri Tanjung Pinang, where properties priced above RM1 million are in high demand.
According to One Asia Property Consultants (Pg) Sdn Bhd executive director Chandra Mohan Krishnan, rising construction costs, especially for materials like sand, alongside increased sales and services taxes, have contributed to the upward trend in property prices. The recent federal approval for the Penang Light Rail Transit (LRT) project has further enhanced the value of properties in key areas, adding to the steady demand.
Impact of Penang LRT on Property Prices
The Penang LRT Mutiara Line, which connects Komtar to Silicon Island, is expected to ease traffic congestion and improve connectivity, leading to a boost in property values along the alignment. Notable developments such as Queens Residences @ Queens Waterfront in Bayan Baru, Lumina Residence in George Town, and Codrington Residence in Pulau Tikus are among those set to benefit from the LRT network.
“These are some of the most sought-after condominiums in Penang, offering built-up areas between 1,000 sq ft and 1,500 sq ft, with prices starting from RM900 per sq ft,” said Chandra. He added that modern households with fewer children are now gravitating toward medium-sized condominiums for easier upkeep, especially those offering proximity to infrastructure like the LRT.
Foreign Interest in Penang’s High-End Properties
Despite the strengthening ringgit making Malaysian properties more expensive, there is a healthy level of interest from foreign investors, particularly from Taiwan, Singapore, and Hong Kong, according to Ideal Property Group general manager Nancy Teo. Teo noted that popular projects like Lucerne Residences and Queens Residences Q3 @ Queens Waterfront have seen strong demand, with prices ranging from RM730,000 to RM2 million.
However, Teo pointed out that restrictions on Chinese nationals, such as a US$50,000 cap on outbound funds, have limited their ability to purchase properties in Malaysia. Nonetheless, Chinese buyers who already have investments in Malaysia and funds parked outside China continue to show interest, particularly in completed units where they can move in immediately.
High-End Property Market Sees Increased Activity
The Penang high-end property market, especially for properties priced above RM1 million, has seen a noticeable uptick, driven by recent project launches. Eastern & Oriental Bhd general manager Ramesh Gnanasegaran highlighted that Penang’s economic outlook, bolstered by government investments in infrastructure, is attracting investors from across the region, including Singapore, Hong Kong, China, and Indonesia.
“Penang remains a favoured destination for high-end property investors, and we’re also seeing increased interest from Taiwanese buyers,” Ramesh said.
Decline in Overhang Properties
Meanwhile, the number of overhang residential units in Penang has dropped to 2,400 units in the first half of 2024, down from 2,901 units in the same period of 2023. The total value of these overhang properties is estimated at RM2.02 billion, according to the National Property Information Centre (Napic).
At the national level, the total number of completed but unsold units fell to 22,642 units in the first half of 2024, continuing a downward trend from 25,816 units in the second half of 2023.
Despite this, condominiums and apartments accounted for the majority of the overhang properties at 59.8%, while terrace houses represented 24.4%.
Outlook for Penang’s High-End Property Market
With ongoing infrastructure developments like the Penang LRT, rising foreign interest, and a reduction in overhang properties, the high-end property market in Penang is expected to remain robust throughout 2024. The combination of government investments, improved connectivity, and the island’s unique appeal makes Penang a prime location for property investors both locally and internationally.
