Category Archives: Penang

Penang Clan Jetties – World Heritage Site

enterance to jetty with hand painted World Heritage sign

There are 6 clan jetties in Georgetown, Penang, Malaysia. The historic sites include housing built over the water, which continue to be lived in today. Old town Georgetown, including the clan jetties was designated an UNESCO World Heritage site in 2008 (along with Melacca).

When the jetties were established in the mid-19th century everybody who lived on the same jetty had the same surname because they all came from the same fishing village in China’s Fujian Province. When they arrived they did not have money to buy land and so decided to build their own villages: the jetties. The families were used to living close to the water and most men who lived on the jetties worked as fishermen or as coolies in the port.

The UNESCO World Heritage status saved the jetties from planned demolition. The fact that the jetties now have heritage status guarantees that they will stay.

– Francine Linssen, Passage magazine, Friends of the Museums of Singapore, Jan/Feb 2012

View from Penang Clan Jetty with modern highrises in the background

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Minimum Housing Prices for Foreigners Investing In Malaysia Rise to RM 1,000,000

Excerpt from a speech by the Penang Chief Minister Lim Guan Eng, 19 April, 2012:

As a first step to protect the interests of local Malaysians, the state government is proposing to increase the minimum limit for foreign purchases of all properties from the existing level of RM 500,000 to RM1 million with a higher limit of RM 2 million for landed properties only in Penang island and retaining the present RM 500,000 limit for Permanent Residents.

In 2010 and 2011 there were 774 and 890 property transactions involving foreigners. These transactions constitute only 2.98% and 2.26% respectively of the total number of transations in Penang. However to protect the interests of locals to ensure that they enjoy priority for less expensive properties, this restriction will help to provide a level playing field since foreigners have the advantage of a higher currency.

The Penang state government stresses that we welcome foreign participation in our economy including our property market. The state government feels that foreign participation can be profitable to both Penangites and foreigners in the higher end market where they can add value by helping Penang to transform itself into an international and intelligent city.

We would like to get feedback and opinions from NGOs, property developers, foreigners and the public on this proposal. The state government hopes to implement this proposal the earliest by 1 June 2012 or the latest by 1 July 2012.

It would be good to know what percentage of the sales from RM 500,000 to RM 1,000,000 for condos, and RM 2,000,000 for landed properties were purchases by foreigners. But it seems like an overly drastic measure given a 2.5% rate of foreign purchasers. To slow the rise in prices I believe increasing the downpayment requirements (including the extremely minimal downpayment requirements on housing in the process of being built. To be effective this should be done on all purchases (not just foreigners).

Without more focused data on the foreign purchases in the ranges being targeted however it is hard to determine what the impact of any measure could possibly be.

Participants in MM2H (as well as permanent residents) are permitted to buy/own 2 properties at the RM 500,000 minimum level; which could definitely increase the applications for that program. That could be one of the reasons this action was taken.

Related: Penang’s Economic GainsPenang Condo MarketConsiderations for Investing in Iskandar Housing

Zee Avi to Perform in Kuala Lumpor, Kuching, Penang and Singapore

Zee Avi posted her music to You Tube from her home in Borneo and was spotted and signed by a producer based in the USA. She is back in Malaysia on a tour and will be performing at the following locations:

  • Rock Corner, The Curve Shopping Mall, Kuala Lumpor, Nov 16th
  • KL Live, Kuala Lumpor, Nov 17th
  • Straits Quay Convention Center, Penang, Nov 19th
  • TAB, Singapore, Nov 22nd
  • Damai Central, Kuching, Sarawak Nov 26th

From her bio:

just four years ago, Avi was a former art student in Kuala Lumpur who posted a song on YouTube to catch up with a friend and was quite surprised to find herself the toast of the Internet when thousands of strangers discovered her effortlessly stunning voice. Literal overnight success can easily poison young minds, but Avi is no ordinary mind — while critics were comparing her chilled-out, jazzy, ukulele-based songs to Billie Holiday and Cat Power she was continuing to make visual art and remaining her buoyant, whimsical self. “I’m 25 going on 12 and a half on a good day,” she laughs, flipping through a notebook filled with colorful drawings and lengthy notes.

via: Capturing Penang

Related: Tourist choices in KLLooking into Kuching, Sarawak, MalaysiaHollie Steel

Penang’s Economic Gains

There is an interesting article in Bloomberg on the Penang’s recent economic success:

Penang’s progress highlights the challenges facing the rest of Malaysia and the National Front government as China, Indonesia and Vietnam offer investors bigger workforces while Singapore lures talent with lower taxes and easier immigration. Lim, 50, the country’s only ethnic-Chinese state leader, embodies the contrast between Penang’s business transparency and the four-decade old policies of the ruling party that favor Malays, which the World Bank says undermine competitiveness.

I am sure that is a politically contentious issue. The very good sign, I think, is the ability of Penang to experiment. For countries to succeed in this very competitive environment they need to experiment and can’t be afraid to disappoint some people. I see Malaysia doing many good things, including recognizing the brain drain and the need to build a partnership with Singapore.

In the first seven months of 2011, Penang won 3.6 billion ringgit ($1.2 billion) of approved foreign manufacturing investment, ahead of the 3.4 billion ringgit that went to Selangor, the state that surrounds the capital Kuala Lumpur, a government report showed last month.

Under Najib’s Economic Transformation Program, his government is promoting about 65.8 billion ringgit of private- sector-led projects for southern Johor state, compared with at least 375 million ringgit for Penang, according to data compiled by Bloomberg. The comparison excludes projects covering multiple states or those without a clear single location, which amounted to 34.3 billion ringgit nationwide.

With my admittedly limited knowledge of Malaysia investing in Johor, to build a dynamic relationship with Singapore, is very wise. It seems to me investing in creating strong economic center’s in KL, Penang, Johor and Sarawak makes a great deal of sense. It is always wise to spread development around – at the same time concentrating it (somewhat contradictory, I know).

And the long term economic plans seem very wise: investing in building a high tech workforce, building around natural resources, targeting some key industries (health care, manufacturing…). I would also strongly push to maintain and upgrade the use of the English language. Granted, that is useful for me personally, but economically it is a powerful tool to grow Malaysia over the long term.

Building economies into mid-wage and mid-to-high-wage economies is very difficult. You need to constantly be looking out decades while still making people’s lives better today. And moving the society along with the economic development. Economies are made up of people, forgetting that is dangerous. But they also are in competition with many other countries that are doing what they can to grow and compete with your country. The balance is not easy, but it is much easier when the economy is growing and the gains cResidence Pass for Talented Expatsan be distributed to show people what has already been gained and dream about the potential.

Related: Penang Condo MarketResidence Pass for Talented ExpatsStrong Singapore Dollar

Hotels and Accommodations in Malaysia

I have added a page on the site with links to good hotels and accommodations in Malaysia. At this time it covers 4 areas: Kuala Lumpur, Langkawi, Penang and Johor Bahru. Different people have different desires for a hotel room. And at different times even the same person does. In general I prefer to save my money by using discount lodging, but I splurge occasionally – especially if I can get a great deal. I did that, when I stayed at the Prince Hotel & Residence Kuala Lumpur and it was wonderful.

I also have found nice discount places and some in-between. I really nice place in Johor Bahru is Bliss Boutique Hotel that has very distinctive room designs. They also have great staff. If you don’t mind small rooms it is a great choice for Johor Bahru.

photo of the beach at the Sunset Resort

Beach, Sunset Resort in Langkawi, Malaysia by John Hunter

Langkawi is a wonderful place to vacation and relax at the beach. I stayed at the Sunset Beach Resort which had very simple and well maintained bungalows. One of the best “features” was a great Indian restaurant on the beach – right next store to the hotel.

A great hotel in Penang is the G Hotel on Gurney Drive.

Related: Good, Cheap, Johor Bahru HotelsTourist Stuff in Kuala LumpurNice Ocean View from Langkawi, Malaysia

Photos from Penang

I took this photo while walking from Batu Feringgi to Tanjung Bungah on Penang. There were some nice views, like this one, but it probably isn’t very smart to walk that path as considerable distances have no sidewalk at all and you have to walk within a foot of where cars and trucks zoom by. And even when there is a sidewalk you have to be watchful for huge holes, feet across and several feet deep, you could easily fall through.

The lack of consideration given to pedestrians in the design and operation of Penang is a big reason I don’t think I will live there. The buses were very convenient, and cheap, for the Georgetown to Batu Feringgi corridor, that part of the urban planning has been done very well.

See more photos from Penang.
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Penang Condo Market

See Topic: Penang Condos 2011 forum discussion of this topic for background information.

In general property prices can only support what local jobs support. So is Penang adding lots of jobs that can support costly condos? I don’t know, but am skeptical.

Penang may be a bit of an exception (as a “retirement local”). For retirement locations if you have a future stream of retirees then you can support higher prices than local jobs (this is riskier to rely on as a investor). Retirement locals that are cheaper than where those worked are coming from can seem cheap so those working elsewhere are willing to “overpay.” This could be the situation for Penang.

MM2H buyers don’t seem that can actually affect the market. Speculators are likely a big player. The smart public policy action in this case is to raise down-payment requirements and increase transaction taxes. This won’t stop a bubble from forming but will reduce the size of the bubble and limit the damage when it pops.

I wonder if a significant portion of demand (in addition to direct speculation) is Malaysians working in KL, Singapore, USA… buying a condo today that they don’t plan on living in for years. This can be a form of speculation but is a much more solid foundation for sustaining prices. If you have a high working income, purchasing a condo in Penang could be relatively cheap. If you are buying one, to rent for 10 years and then move back into you are unlikely to be harmed greatly when prices drop. Now some people will do this and see their first condo doubled in value and then buy two more, over-leverage themselves and have a great ride up the bubble and then get clobbered when the bubble bursts.

For the Penang area to sustain a long term boom, Penang needs to develop a sustainable long term pool of buyers. the safest way to do this is with lots of high paying jobs. That can be supplemented with some retirees (Malaysians and MM2Hers). To do either of these the government and developers must pursue strategies that attract these populations. There are other minor factors – you can have people making a lot of money buy a condo for their family or parents… But the only reliable way to sustain increasing property values is adding jobs and creating a pleasant living experience.

In looking around Penang me sense is that rental prices are very good (for renters). The available condos for rent seem to be quite high also. My guess is this is a sign of the large percentage of speculators/investors compared to those buying condos to live in themselves. This is a dangerous sign – when the market has more capacity than people (normally due to building more housing than the job market supports). My familiarity with the market is extremely limited however, my perception could be way off.

On the plus side the prices on a regional and global basis are reasonable. Therefor, those accustom to international prices can buy and feel they have a bargain. And this situation can support rising prices (especially if those buyers plan on retiring there – if they need to have a job there then it doesn’t matter how cheap the prices are if the jobs don’t exist). Buying with the hope that Penang is moving toward a prosperous future is reasonable. That is a bet that the island will add jobs and improve infrastructure to support a livable community that attracts people from all over Malaysia, and beyond. There is a great example of how to do this in nearby Singapore. If Penang take cues from many of Singapore’s wish moves investors could certainly be rewarded in the long term.

One significant risk to investors is the carry cost of their investment if the overcapacity (if there actually is overcapacity) continues over a long period. That will suppress rental rates. As new condos are added it also can reduce the attractiveness of your condo to renters (or future buyers).

Related: Home Values and Rental Rates10 million More Renters In the Next 5 Years (in the USA)Apartment-vacancy Rate is 7.8%, a 23-year High (in USA, Nov 2009)Retiring Overseas is an Appealing Option for Some Retirees