The Unesco heritage listing has had a side-effect: people are snapping up shophouses, driving up the prices to ridiculous levels, in the process altering the economic, social and cultural landscape of the city.
Speculative interest in the Unesco listing – together with developers focusing mainly on high-end condos and homes elsewhere in the state, low bank interest rates, and “quantitative easing” in developed economies – has contributed to soaring prices in the state.
See this report in The Star:
By JOHNNI WONG
THE cost of buying a pre-World War II shophouse in George Town, Penang, has reached RM2,000 per square foot — equivalent to the price of the poshest Kuala Lumpur City Centre (KLCC) condominium units.
An entrepreneur, who declined to be identified, has just paid RM4mil for a 2,000sq ft shophouse along Lebuh Pantai (Beach Street) in order to continue an existing business located on the premises which she had been renting.
Before 2008 — the year George Town was jointly listed with Malacca as Unesco World Heritage Sites — pre-war shophouses in Penang were generally going for about RM200,000 to RM800,000 depending on size and location.
In 2009, an unrestored shophouse of 10ft by 36ft in Lorong Chulia only cost RM150,000, but the asking price has since jumped to over RM300,000 of late.
Now, the asking price of even the smallest shophouse that spans only 11ft by 30ft in Lorong Toh Aka is already RM600,000.
Nearby, in Lorong Carnarvon, one unit of 17ft by 100ft has been sold for RM1.2mil, while Lebuh Amernian shophouses can fetch RM3mil each.
Full report here.
As George Town becomes gentrified, the effects are all round to be seen. Local businesses and communities are giving way to a galaxy of boutique hotels and trendy cafes increasingly priced out of reach of locals.
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You want paradise and want it on the cheap? No one has that secret formula. Those pretending they do, are delusional.
So Ah Soon, what is the problem? If Japanese are coming in and making Penang their 2nd Home, that’s a federal policy. If China, Japan, US and UK can experience a Property Bubble burst, what is Penang. There is way too much speculation in the Penang property Market. In the area where Anil & I live – the apertment costs under RM400k, but rental is about RM1,500. The 2.5 storey terrace house in Setia Pearl Island costs about RM800k and fetch about the same rental. Someone can explain why there should not be a bubble burst in Penang in the… Read more »
There is no end in sight for the Fukushima nuclear crisis. Another earthquake that strike again will trigger a nuclear explosion if the cooling system is damaged. Many Japanese have planned to migrate to Penang island. The price of pre-war shoplot go up in anticipation of the migration of Japanese to Penang island. Soon George Town will become Japanese Town.
Because our exchange rate is still very low or going to be low, low compared to growing, developing BRIC & advanced nations, the cost of buying 2nd homes, vacation homes or extra commercial properties in Penang Island, a UNESCO heritage site is very tempting, with ‘goodies’ thrown in by the desperate gomen for ‘growth’ brought about by foreigners. Not only the Japanese, HongKees and Koreans, the Vietnamese from Canada, Australia & US are also taking up residence in million Ringgit homes they only use in the 3-4 winter months. The rest of the months, these richie homes are left empty.… Read more »
Penangites cannot kau peh kau boh now that even prices of the heritage zone properties, outer zones or no zones in George Town are getting out of hands, out of reach. People buy when they can afford for their businesses, or buy to speculate or buy as 2nd homes for vacation. The restrictions of the 80’s are torn down just as any old buildings now are giving way to newer development. Take a walk in Lebuh Nordin and you will see the once old Wembley Theatre taken down save only for the front facade. I called that ‘front-face saving’ development… Read more »
There is no perfect solution that fits all, you want development, you want Unesco listing, it comes with some price to pay. You want to be London, but you don’t like to spend like in London. It is a natural force of demand and supply, not something like stricking NFC jackpot. It is an Island, island is attractive to foreigners, check out HK, Singapore. Effcect of globalization, country boundary faded away, people are comparing city to city… and you put Penang under Unesco haritage spotlight and you try to say no to properties speculators… It cuts bothways, ballancing is not… Read more »
Development is preferable than in situ laggard. But do we pause to think (introspectively) of our future as a state in a window of opportunity to move ahead at what costs to the average locals? Locals who are still struggling from the laggard legacies of ostrich years and no thanks to influx of foreign labors? It is easy to accept globalization (at face value) of our economy but there are dire consequences, one of which is economic colonization by foreigners whom have no qualms but profits in mind. This is not to say shut up ourselves but we should also… Read more »
Penang will be the next London. Everything will be expensive. Thanks to DAP administration.
Not in all aspects though, but if George Town can be like London, I would be very pleasantly surprised.
It’ll be like London with a Tom Yam Food stall at every open space.
MPPP is not efficient and can’t be bothered to enforce any existing regulations.
Just look at Batu Ferringhi…after all the talk and bull… it is STILL a … cowboy town..
I second what you say. MPPP is honestly the biggest trash and probably amongst the worst local councils in Malaysia. Whoever who wants to set up a business or restaurant just goes around and looks for an empty piece of land to claim as their own. After that protest when action is taken, claim u are poor and therefore u can break the law. And MPPP gets cowed by that. It is a very simple thing to enforce. It’s not like we are asking them to solve murders or crimes. I’m not saying whether the law in this case is… Read more »
Why you worry? You have a wife who earns at least 15k a month. Could always borrow some money off her. Some more we can keep our money in the country. There’s enough capital flight, er, flow to London as it is already.
Actually don’t find the prices that high for Penang. There is a limit to how much these shophouses can go up because they can’t be knocked down and rebuilt and traffic has a limit in these places unlike shopping malls..Nothing to really be concern about. The place will change and the worry is it will be turn into seedy bars and other unsavory to make money at such high prices, cafes and hotels is nothing to be concern about..