A 19th-Century House in George Town
$1.88 MILLION (8.1 MILLION MALAYSIAN RINGGIT)
This refurbished, three-story house dating from the early 19th century stands among the Colonial buildings in the historic city center of George Town, the capital of the Malaysian state of Penang and the country’s third-largest city, with about 700,000 residents.
The 2,674-square-foot building was once a shophouse, with a ground-level store opening onto the sidewalk and a residence above. It was discovered in a dilapidated state by the owners in 2009 and restored by Guillaume Kuhlmann, a French architect, with four bedrooms, three bathrooms and a rear courtyard.
Designed in an architectural style developed by Chinese settlers along the Strait of Malacca, a shipping channel on the west coast of Peninsular Malaysia, the brick house features wooden shutters and decorative Victorian wrought-iron panels. Like other shophouses built around the same time, it has a narrow street front and a covered veranda called a “five foot way,” as well as deep interiors and a roof of traditional terra-cotta tile.
“The architect has respected this unique amalgam of Chinese, European and Malayan elements, deploying them in a contemporary way,” said Serena Tan, a director of PG Property Angel, which is selling the property.
The front door opens to a sitting room with a breakfast counter opposite a dining area. Floors are tiled in terra cotta, and lofty ceilings retain the original wood beams. The breakfast counter, made from local wood and recycled marble, has a microwave and refrigerator, and could easily be converted into a full kitchen, Ms. Tan said. (The furniture, much of it custom-made, is included in the asking price.)
Beyond the sitting room are the remains of a wood frame with fretwork, dividing what would have been the shop from the rear living area, and a vestibule with a replica of the original staircase and tall, louvered doors that open to the courtyard.
The courtyard, which has a recessed granite floor, is framed on one side by three sets of wood doors leading to a bathroom, storeroom and laundry room, and on the other by the home’s shuttered rear facade.
A staircase made of merbau hardwood ascends to a second-floor landing and a bedroom with a sitting area and an en suite bathroom. Another bedroom and a larger bedroom suite are on the third floor, with a staircase leading to a spacious mezzanine with a queen-size bed. Both bedroom suites have merbau floors and wardrobes, as well as glass-enclosed bathrooms with encaustic-tile floors and marble-topped vanities. The home is ventilated throughout with ceiling fans, and the bedrooms have air-conditioning units.
This house is the only private residence on China Street, in the Little India section of the original Chinese quarter of George Town, an area designated a UNESCO World Heritage site in 2008. The property has views of the Goddess of Mercy Temple, an 18th-century Taoist temple; nearby are the European trading houses of Beach Street, dating to the late 19th and early 20th centuries. Restaurants, cafes and other attractions fill the district. A few minutes away, on the shores of the Penang Strait, is a jetty where buses and ferries offer transportation from Penang Island to mainland Malaysia. Penang International Airport is about 12 miles south.
Foreign buyers have long been attracted to Malaysia for the reasonable housing prices, which are much lower than those in Singapore, and more on a par with those in Asian cities like Jakarta, Bangkok and Manila, brokers said.
“For luxury condos, we are at least four to six times lower than Singapore for a comparable product, and slightly below Jakarta and Bangkok,” said Previndran Singhe, the chief executive of Zerin Properties in Kuala Lumpur, Malaysia’s capital.
After the Malaysian property market caught fire around 2011, the government imposed measures to slow it down, including restrictive lending standards and minimum price thresholds for foreign buyers, brokers said. Transactions steadily declined, bottoming out in 2017 and 2018.
In 2019, the government took steps to loosen the market and attract more buyers, lowering the minimum threshold for foreigners to buy existing units from 1 million Malaysian ringgit ($231,000) to 600,000 ringgit ($140,000), although each Malaysian state was required to enforce the change independently, and not all have done so.
“Last year, we were already seeing a growth of foreign purchasers compared to a year earlier,” Mr. Singhe said. “This was mainly due to more aggressive promotion of the properties to foreign purchasers.”
In the third quarter of 2019, the average home price in Malaysia was 422,194 ringgit ($98,000), up slightly from 421,368 ($97,000) the previous year, according to the National Property Information Center. But in early 2020, gains in sales activity evaporated.
“Most people were expecting another slow recovery of the property market in 2020 — until the Covid-19 came in,” said Lim Boon Ping, the president of the Malaysian Institute of Estate Agents.
Since mid-March, Malaysia has been under a Movement Control Order, requiring residents to stay home unless they are providing essential services or buying groceries or medicine. The order, in place until late April, has made title searches and property showing much harder, said Sarkunan Subramaniam, the managing director of Knight Frank Malaysia. “As both buyers and sellers have become more vigilant amid the outbreak, a wait-and-see approach is prevalent,” he said, “as people will try to avoid showrooms and sales galleries during this critical period.”
Before the pandemic, the housing market in the state of Penang — which encompasses Penang Island and the city of Seberang Perai on the Malay Peninsula — was faring better than those in much of the rest of the country, said Mark Saw, the executive director of Knight Frank Malaysia. The state, sometimes called the Silicon Valley of the East, has developed a tech-manufacturing sector that attracts workers and investors from oversees. According to the National Property Information Center, the average home price in Penang during the second quarter of 2019 was 437,632 ringgit ($101,000), higher than the national average of 420,345 ringgit ($97,000), although still far below the average of 780,564 ringgit ($180,000) in Kuala Lumpur.
“Over the years, generally, Penang property has sustained itself more than the rest of Malaysia, because of its unique position being known as the pearl of the Orient and its historical background,” Mr. Saw said.
On Penang Island, where George Town is, land for new development is limited. Properties with land currently range in price from 800,000 ringgit ($185,000) to 15 million ringgit ($3.5 million), depending on the location, said Anders Ong, a sales team leader at the Roof Realty, in Penang. A condominium can sell for 400,000 ringgit ($92,000) to 5 million ringgit ($1.16 million).
Who Buys in Malaysia
Malaysia maintains its appeal to foreign buyers with its reasonable food and property prices, excellent medical facilities and widespread use of English as a second language, Mr. Ong said.
Foreigners tend to look for homes in Kuala Lumpur and the states of Selangor, Penang and Johor, brokers said. Langkawi, a picturesque archipelago of 99 islands off the coast of northwestern Malaysia, also attracts foreign buyers, Mr. Saw said: “If you’re someone who’d like to have a more idyllic settlement with less development, Langkawi would be what Penang was maybe 20 years ago.”
Most foreign buyers are from China, South Korea, Japan, Hong Kong, Bangladesh and the United Kingdom, brokers said. A smaller number come from Taiwan, India, Singapore, Indonesia and the United States.
Foreigners need state approval to buy a home; it is typically a formality, but often comes with a tax. In Penang, they are required to pay a 3 percent tax, Ms. Tan said.
Sales are also subject to a stamp duty calculated on a graduated scale, from 1 to 4 percent. In all, foreign buyers in Penang typically pay about 9 percent of the sale price in taxes and fees, Ms. Tan said.
Foreign buyers must spend at least 3 million ringgit ($693,000) to buy property with land on Penang Island, and 1 million ringgit ($231,000) to buy a condo, Ms. Tan said. Malaysian banks will offer financing to eligible foreign buyers for as much as 70 percent of a property’s sale price.
The seller typically pays the broker’s commission of 1 to 3 percent, Mr. Ong said.
Malaysia tourism: tourism.gov.my
Penang tourism: mypenang.gov.my
Malaysia My Second Home: mm2h.gov.my
Languages and Currency
Malay; Malaysian ringgit (1 ringgit = $0.23)
Taxes and Fees
The annual property tax on this home is about 1,300 ringgit ($300), Ms. Tan said.
Serena Tan, PG Property Angel, 011-60-16-496-7718; penangpropertyangel.com