As one of the undisputed property hotspots in Malaysia besides the Klang Valley and Johor, the state has seen a variety of developments not just from independent, private property developers and conglomerates but also the government. We talk to Dr Teoh Poh Huat, Director of Henry Butcher Malaysia (Penang) Sdn. Bhd. for his insights into property trends over the last 12 months and a projection of Penang’s property scene in 2011.

While foreign investors continue taking-up beach-front properties along Batu Feringghi and Tanjung Bungah, Penang’s state government continues to improve public infrastructure on the island giving greater access to the island.

iP: How has the Penang property market performed for 2011, especially compared to last year?
Dr. Teoh: Generally 2011 was a bullish year for real estate in Penang. *Q1 2011 showed an increase of 42.5% and 13.1% compared to Q1 2010 and Q4 2010 respectively.

iP: What are the exciting new developments in Penang right now?
Dr Teoh: KL-based developers penetrating Penang island’s development scene is seen as a vote of confidence. Upcoming projects include By The Sea by Selangor Dredging Bhd., Shorefront by YTL, Nadayu 290 by Mutiara Goodyear, Ivory Properties Group Bhd’s joint-venture with Dijaya Corporation Bhd. to develop 103 acres of super-prime Bayan Mutiara sea-front land and Berjaya Land Bhd.’s (BLand) conditional SPA with Penang Turf Club to acquire 57.3 acres of prime freehold land for RM459 million to be used for the development of high-end residential projects.

Ongoing projects by prominent developers include The Light by IJM, Seri Tanjung Pinang by E&O Development, Bayu Ferringhi by Plenitude and Setia Green by SP Setia Bhd.

iP: What are the driving forces behind foreign investment and its impact on the local community?
Dr. Teoh: Penang has always been a favourite of foreign investors from Singapore, Hong Kong, UK and the Indonesian Chinese both for investment and own residence. The scarcity of land and the increase in prices have made prices of selected prime locations “recession proof.”

iP: Are there infrastructural developments driving Penang properties?
Dr Teoh: Apart from the second bridge, due to be completed in 2013, the State Government also has four major infrastructure projects comprising new roads and tunnels to alleviate the present traffic congestion. This is crucial to address the needs of an expanding population and make Penang renowned for sustainable living, secure investment and tourism.

The four proposed projects are Penang Third Link or Penang-Butterworth Tunnel, Gurney Drive-Tun Dr Lim Chong Eu Highway Bypass, Tun Dr. Lim Ching Eu Highway – Bandar Baru Air Itam Bypass and the Tanjung Bungah – Batu Ferringhi – Teluk Bahang paired road. All the above projects if and when completed will improve connectivity, reduce congestion, meet and exceed travel demands. This will in turn make Penang even more attractive for investors and home owners.

iP: What is your projection for the Penang property market for 2012?
Dr Teoh: I think that the Penang residential market will continue to be buoyant for 2012. Price increases will be at a more gradual pace as Bank Negara’s policies to curb property speculation help cool price increases. Innovative financing packages, such as low interest rates will assist buyers, especially first-time home buyers. Demand will remain strong for residential properties with strong demand for well located and conceptualised condo developments. Finally, the much-speculated asset bubble is not likely to develop in 2012.