Five years ago I moved to Malaysia. It’s a fun-loving, outdoorsy, and welcoming country. It’s friendly and English speaking—even the road signs are in English, and the roads in Malaysia are some of the best that I have seen anywhere in the world.
Malaysia is also the only country in Southeast Asia where foreigners are allowed to buy houses and condos freehold. The real estate market in Penang has been on the rise in the last few years largely due to its UNESCO heritage listing in 2008. It slowed in 2014 and has flattened out this year. Penang is a small island, like Singapore, which many folks reckon means that at some stage it’s going to take off again.
Who is buying here? Well, speculators from Singapore and China drive the market. For them, property in Penang is cheap by comparison to what they would pay back home. They look for properties to add to their growing international portfolios, and not necessarily to live in. Capital gain over a period of time is their play. What costs $10,000 per square foot in Singapore costs one-tenth of the price in Penang.
I took a trip a few days ago to Tanjung Bungah, an affluent neighborhood, just 15 minutes from George Town, Penang’s capital. It has one of the best beaches on the island. It’s quiet at night—if you listen closely you can hear the surf from your bedroom window.
Tanjong Bungah is the longest beach on Penang Island. It’s also one of the prettiest. People who live here beach walk in the mornings and evenings, and stand-up paddle boarding is becoming more popular. There is little to no surf on the beaches in Penang and that makes paddle boarding popular and possible for all ages.
In a quiet tree-lined street just across from the beach, I found an unrenovated 3,000-square-foot 1970s Californian-style bungalow with everything that you love and hate about that particular style. The living room has a split-level floor plan, lots of wood paneling, stone features, and low ceilings. The four-bedroom, two-bathroom property is good value at $350,000. Similar renovated houses in the neighborhood have sold for triple that amount in the last few months.
Just minutes’ drive away is the Tanjung Bungah wet market, where you can buy fresh vegetables daily, every fruit imaginable, and the choicest ribs for your BBQ.
Historic George Town is a 15-minute drive away, with the largest national park on the island and the traditional Malay fishing village of Teluk Bahang just 20 minutes in the other direction.
To get there you’ll pass through the suburb of Batu Ferringhi where 900-square-foot condos, with unlimited sea and hill views, sell for $100,000. Most of these condos have pool and gym access too, so you don’t want for much.
Each state in Malaysia has a minimum purchase price, a minimum amount that foreigners have to spend. In Penang, the minimum is $261,000 for apartments and $523,000 for houses but like most states, it’s a gray area and there are ways and means to get around the system legally. One way is to form a private limited company, which is a cheap and effective way to invest. Setting up the company costs just $900 and when done, there is no minimum limit.
Teluk Bahang is a lovely part of the island with palms fringing the entire coast road and a first-class beach—busy at weekends and deserted during the week. Driving through it reminds me of why I moved to Penang in the first place.
It’s peaceful here. The food is traditionally Malay and you can spend the afternoon munching on slow cooked curry chicken in a hammock beside the sedately flowing Straits of Malacca.
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