Established as an entrepôt in 1786 by the East India Company’s Francis Light, George Town was the first British settlement in Southeast Asia. Today, it is the capital of Penang.
The city of George Town includes the Bayan Lepas Free Industrial Zone, a high-tech manufacturing hub called the “Silicon Valley of the East”.
The historical core of George Town was declared a Unesco World Heritage site in 2008.
Penang International Airport links George Town with several major cities in the region while a ferry service, the Penang Bridge and the Second Penang Bridge connect the city with the rest of Peninsular Malaysia.
George Town’s Swettenham Pier has emerged as the busiest port of call in Malaysia for cruise ships.
Analysis by Property Advisor shows that interest in high-rise properties in George Town has been on the decline as the median price and transaction volume have dropped continually since 2018.
In the first half of 2019 (1H2019), transaction volume dropped 41% year on year while the median price plunged 61%.
This year, transaction volume and median price dipped 10% and 5% respectively.
Landed properties were trending upward last year, compared with 2018, as the transaction volume increased 7% in 1H2019. The median price followed suit with a 9% increase. Unfortunately, due to the pandemic, transactions dropped 40% in 1H2020 with a drop of 19% in median price.
Despite the decrease in transactions, median prices in George Town remained steady in 1H2020, and even skyrocketed in the first-home buyer (FHB) market.
After a median price drop of 53% from 1H2018 to 1H2019, the price shot up by a whopping 118% in 1H2020. The investors’ market saw a 67% plunge in 1H2019 but remained unchanged in 1H2020.
FHB transactions were down 45% in 1H2019 and fell a further 67% in 1H2020. Investor transactions dropped about 35% in 1H2019 and 1H2020 compared with the year prior.
What does the expert say?
Savills Malaysia director of research and consultancy Amy Wong told Property Advisor that George Town is well established and has easy access to various facilities and amenities.
“Being a Unesco World Heritage site, development and planning in George Town have to balance between progress and heritage, in adherence to its Special Area Plan, which was gazetted in 2016.
“As such, increasing the quality of life and standard of living in George Town is best embraced by positioning it as a smart city and riding the wave of digitalisation that is trending globally,” she said.
Wong said the state government has rolled out a few initiatives to improve connectivity within the state, such as the Penang Connectivity Master Plan and the recent collaboration between Penang Island City Council and IBM Malaysia Sdn Bhd.
Other than that, she said developers might leverage growing digitalisation needs by offering future-proofed products or by integrating solutions with the state government’s smart city initiatives.
Impact of Covid-19 on George Town’s property market
The property market’s performance this year has generally been similar across the key states in the country, said Wong. “As the country recorded a 28% decrease in the volume of transactions and 32% in value, Penang saw a 29% reduction in transactions and 20% in value.
“The direct impact is the economic uncertainty for businesses. Most corporations and small and medium enterprises are working hard to keep their businesses afloat and protecting jobs while the government is paving the way for an economic recovery (as proposed in Budget 2021).”
She said consumers tend to be more careful of their spending now, given that everyone is entering into another phase of the Conditional Movement Control Order and this is likely to be an on-off arrangement until vaccinations are available.
For the office segment, Wong said that although most companies have adopted flexible work arrangements, there have been few changes in terms of space requirements at the moment given that business operations need to adhere to physical distancing rules.
Nevertheless, she hopes George Town will move forward with the construction of public transport, which will significantly enhance accessibility and connectivity on Penang Island – and hopefully free up congested roads.
This article was written by Sharina Ahmad of PropertyAdvisor.my, Malaysia’s most comprehensive source of property data, property analytics and insights.