Tag Archives: rental market

Developmentally Challenged

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.

The project closest to our condo; it's the only one nearby

The project closest to our condo

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“.

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House Hunters International: the real thing, not the TV show

Having successfully completed our banking issues, Diane and I arrived in Penang a few days ago and set out in search of an apartment complex. Ironically, our first day of hunting literally followed the script of any HHI episode almost  to the letter. Referred to a property agent rumored to be the best in the island in terms of integrity, honesty and understanding the needs of new arrivals, we met Catherine Outside the hotel where she picked us up right on time. Having read dozens of posts telling us how we should schedule as many meetings as possible with multiple agents because they’re all scammers and not even licensed in any way, our skepticism quickly disappeared. Within the first half hour we could tell our agent was just as professional as the realtor in Walnut Creek that helped us sell our house.

imageBefore I get to that, however, I need to mention a word about our experience with Copthorne Orchid, an old dilapidated outdated and pathetic excuse for a hotel disguising itself with the Millennium Hotels’ name. Having selected it for a 12 day stay based on strangely inaccurate TripAdvisor  comments and a website that’s a total lie, we arrived to a morgue-like eerily quiet lobby where five employees stood there and didn’t say one word. Finally deciding to check us in, the staff spoke very poor English which is highly unusual for Malaysia, especially in the hospitality industry. Taking the rickety elevator that barely fit our luggage to the 17th floor, we exited to a dirty smelling and dank hallway with no decor and old carpet. Even worse, the room looked like it hadn’t been touched since 1975, with a horrible bed, one small desk, worn our carpet, leaky bathtubs and a crappy shower. Attempting the wi-fi was an exercise in futility and we knew the temporary living quarters would not work for us at all.

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