Arriving at Penang’s rather small and incredibly antiquated international airport, first time visitors to the island might be shocked by the lack of modern sprawl, especially if the plane came from Kuala Lumpur. Unlike the capital city’s luxurious and modern terminals, the first word that comes to mind might be underwhelming as you approach the poorly lit baggage carousels that lack modern digital signage. Stepping outside to the undersized and overcrowded parking area won’t change many viewpoints but after hopping in a taxi and travelling a bit, that’s where the old Penang ends. Unless your plane arrives before 7 AM or after 9 PM, expect to sit in a bumper to bumper mess of expressway-free chaos (albeit calm compared to other Southeast Asian cities) for about an hour (assuming your destination is Georgetown). Wondering why Penang hasn’t attempted multi-lane highways for its heavy traffic volumes, visitors and tourists may have traveled on large limited access freeways that connect the small nation but mysteriously end when you cross one of the bridges connecting the island to the mainland. At first, you might think Penang is still relatively undeveloped compared to the big city but reality sets in quickly as soon as the first monstrosity condo construction site appears. Welcome to the Penang, Land of the Highly Overdeveloped.
Taking advantage of countless Western investment dollars that flowed into all the emerging markets after The Great Recession, Penang embarked on a quest to build dozens of multi story luxury buildings that rival any other large city in Southeast Asia. Drastically unprepared for a surge in new residents, infrastructure sorely lacks and with no expressways, bypass roads or light rail, Penang followed the path of Calgary, Alberta during the George W Bush years when oil and gas boomed. Exhibiting the mantra “build it and they will come“, Malaysia appears ready to accept a rash of wealthy home seekers. Taking a back seat to multinational developers, nobody really worries too much about new roads, better transit and improved services. Unfortunately for Penang, there’s one little problem. Although it’s growing fast and considered the best middle class economy in the ASEAN, per capita income in Malaysia clocks in somewhere around $12,000 USD per year. With minimum price tags of over two million ringgit for almost every new luxury condo (about $500K USD), it doesn’t take a financially savvy investment adviser to figure out what percent of the nation’s population can afford these new condos. Clearly designing an entire island of luxury for foreign investors with no intention of living on the island, Penang in 2016 looks like the U.S housing market about a year before it all came crashing down but without any “no down payment adjustable mortgages“.