As we step into 2023, the Penang property market is expected to continue its gradual recovery phase from the pandemic-induced slowdown. The year 2021/2022 was a good time to buy property in Penang, thanks to the Home Ownership Campaign (HOC), record-low interest rates, and developers offering freebies, discounts, and rebates to clear their overhang stocks. Looking back, yesterday is always the best time to buy property, and that still holds true for the Penang property market in 2022.
However, as we move forward, the Penang property market is set to face some challenges in 2023. Increasing material and labor costs have made it challenging for developers to keep property prices low. In addition, the 1% increase in the Overnight Policy Rate (OPR) since its record-low in 2022 has led to higher borrowing costs, potentially impacting the demand for property.
Despite these challenges, Penang’s property market is expected to be exciting enough, with several launches in the pipelines. The residential market will continue to focus on affordable and mid-range segments, with high-rise condominiums in the affordable price range of around RM500k being the main focus. The trend is expected to continue in 2023, with some niche high-end projects also expected to be launched in good locations.
As indicated in the National Property Information Centre (NAPIC) transaction data, Penang’s residential property market has started its gradual recovery phase, with an upward trend in transactions post-pandemic. Between January and September of 2022, the residential property market in Penang experienced significant growth, with transaction volume increasing by 46% and transaction value increasing by 44% compared to the same period in 2021.
Taking a closer look, there was a comparable upswing in transaction volume on both Penang Island and the mainland. However, during Q3 2022, transactions on the mainland saw a more significant increase. This trend is further evidence that there has been a continuing rise in the number of properties being transacted on the mainland.
2023 Development Highlights
Some of the most popular projects in 2022 and expected to garner significant attention in 2023 are The Meg at Andaman by E&O Property, along with Ideal Residency, Ideal Venice Residency, and Foreshore Residence. Notably, most of these projects are affordable housing projects. For those looking for new niche high-end projects, stay tuned for an upcoming residential project near Codrington Avenue at Pulau Tikus, launching soon. Sunway Dora, located in Bayan Baru, is also expected to launch soon in 2023.
Some other noteworthy developments to mention are Senze@PICC by Hunza Group, The Light City by IJM and Eco Horizon by EcoWorld, which are set to have many activities taking place this year.
For upcoming affordable housing projects, Setia Miracca, and The Millennia, both at Bayan Lepas, are some projects to wait for. Several additional affordable housing developments are slated to launch this year in various locations, including Jelutong, Tanjung Tokong, Sungai Ara, and Teluk Kumbar. Make sure to stay up-to-date on the latest launches by checking our website regularly.
The housing ministry’s plan to revamp public housing by drawing inspiration from Singapore’s HDB has the potential to alter our affordable housing model and policy, which could lead to a significant transformation in the affordable housing landscape in 2023 and beyond.
Batu Kawan: A Flourishing Township with Potential Challenges
Batu Kawan is now a major economic zone for Penang. As the demand for property in Batu Kawan increases, so does the price. The prices of landed houses and condominiums in the area are now comparable to those in the southern part of Penang Island. With the continued influx of foreign investment and new multinational corporations, the trend is expected to continue, making Batu Kawan one of the most expensive areas in Penang mainland.
However, while good sales performance in the primary property market at Batu Kawan may indicate a flourishing economy, it does not necessarily translate into the same demand in the secondary market. This means that those who buy property in Batu Kawan for investment purposes may find it difficult to resell their property at a profit in the short term due to the area’s lack of essential amenities.
Despite the potential challenges, Batu Kawan remains a prime location for property investment. Its strategic location, combined with its proximity to key employment hubs, makes it a promising area for long-term investment.
Is now the best time to invest in property?
Assuming there are no further pandemics, 2021/2022 was likely the nadir of the property market, and we have now entered the recovery phase. It is possible that the best time to buy property may have come and gone, but it’s worth keeping in mind that the current period can still be considered the second-best opportunity to make an investment.
Despite the persistent complaints about rising property prices, it is important to be realistic and acknowledge that developers are in the business of building houses for a profit. With the scarcity of land in Penang and the increasing costs of materials and labor, it’s improbable that property prices will drop in the future, except in the case of affordable housing projects.
Given the government’s ongoing efforts to boost the supply of affordable housing, there is no need to rush if you’re in the market to purchase such property for your own stay. With a variety of options expected to be available, take your time and carefully consider your choices before making a decision. Additionally, it’s worth noting that these projects are likely to remain priced at RM300k or below for the foreseeable future.
– Ken Lim
(Founder, PenangPropertyTalk.com)
