November 27, 2022

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For sale: A Luminous Shophouse in Penang for $645,000

6 min read

This rehabilitated shophouse was built circa 1890 among the Colonial buildings in the historic center of George Town, a city on Penang Island that serves as the capital of the northwestern Malaysian state of Penang.

The two-story brick-and-mortar shophouse, which was derelict before being refurbished over a decade ago, has two bedrooms and three bathrooms, as well as other features distinctive to historic Asian terrace houses, said Russell Channon, who heads global hotel and Asian residential property sales for Prestige Property Group, the listing agency.

Like other such rowhouses developed more than a century ago, with a business on the ground floor and residences above, the home has a narrow 18-foot street frontage with a covered arcade, called a “five-foot way,” that has been preserved, along with its traditional Chinese porch wall facade, pillars and air well.

“Overall, the owners took great care in ensuring that all refurbishments strictly followed the heritage guidelines,” Mr. Channon said.

The second floor has an unusual outdoor courtyard at the back of the house and hangs over a side lane that has been sealed at both ends with the government’s permission, to protect the owner’s privacy.

The front doors open to a reception area with black, white and gray floor tiles and lofty 15-foot ceilings with original beams. Like the rest of the house, the space is decorated with period pieces and antiques. Furniture is included in the asking price.

The primary living area has the light-filled air well and a staircase to the second floor. At the rear of the house’s deep 97-foot interior is the kitchen, with dark-gray concrete floors, a center island and custom-made cabinetry. There is also a pantry and bathroom, and a door to the enclosed side lane.

Louvered shutters border the air well on the second floor landing, with a pulley system to open the retractable clear roof. The primary suite, at the front of the house, has a dressing room, bathroom and laundry space. Ceilings are about 12 feet high, and a row of windows with louvered shutters overlooks the street. Floors are timber, in keeping with heritage guidelines.

Toward the rear of the house is a lounge area, set apart from a second bedroom by partial walls. Beyond the bedroom is a sunroom, which leads to the outdoor courtyard. “The family lounge and/or the sunroom would be relatively simple to convert into further bedrooms,” Mr. Channon said.

The 3,600-square-foot house is freehold and located on historic Carnarvon Lane in central George Town, a UNESCO World Heritage Site. Nearby is Armenian Park, a green oasis in the neighborhood; Beach Street, which is lined with restaurants, shops and other conveniences; and the lively Chowrasta Market, Mr. Channon said.

“Penang as a whole has a wealth of things to do and caters to every interest — beaches, mountains, trail hiking, museums, galleries, nightlife, spas, gardens, world-renowned street food and shopping would be high on the list,” he said.

The house has easy access to the expressway that leads to Penang International Airport about 12 miles south, Mr. Channon said. Parking is on the street, and there is plenty of alternate transportation, including buses, grab-cars and trishaws.

Malaysia’s housing market, which was relatively stagnant when the global coronavirus pandemic struck, has seen a surge in transactions recently, though prices are being held in check by a glut of inventory, brokers said.

“At the moment, pricing is stable and has stayed close to its prepandemic levels despite an increase in transaction volume,” said Serena Tan, Prestige Property Group’s partner agent for Penang.

According to the National Property Information Centre, the average home price in Malaysia grew by about 3 percent between the first quarter of 2020 and the first quarter of 2022, from 430,786 ringgit ($92,800) to 444,230 ringgit ($95,800).

In the state of Penang, which encompasses Penang Island and the city of Seberang Perai on the Malay Peninsula, the average price dipped by about 1 percent during that period — from 439,015 ringgit ($95,000) to 434,291 ringgit ($93,640) — falling slightly below the national average.

“It’s currently very much a buyer’s market,” Ms. Tan said. “Generally, overall property prices aren’t rising due to an oversupply of new condominiums and apartments. This is obviously good news for those looking to buy other types of property.”

That includes those looking for terraced houses, where the average price on Penang Island has sagged by 1.25 percent, from 873,787 ringgit ($188,300) to 862,814 ringgit ($186,000), over the past two years.

Unlike other housing sectors, historic shophouses likely took a hit due to the restrictions on foreign buyers during the pandemic, brokers said. “The supply is fixed,” said Sam Choong, an advocate and solicitor for Messrs Khaw Cheow Poh & Associates in Penang. “So although prices have flattened lately, and I don’t see so many transactions, I do meet people, mainly foreigners, coming to check things out in general now that borders are open.”

While Malaysia continues to face challenges, such as increasing interest rates, an unstable political landscape, a weakened ringgit and fewer mortgage approvals, the surging sales numbers point to a stronger market than the one before Covid, said Jericho Lo, the chief operating officer of Jalin Realty.

“We’re seeing more home buyers than investors in the market now, and in some way, it cools down the house prices to normal and affordable,” he said. “Worth mentioning are big bounces back on the rental market, where the demand is getting higher, and the average rental price went up too.”

Housing prices in even the most expensive part of Malaysia, its capital and largest city Kuala Lumpur, continue to be a steal compared with those in neighboring Singapore, and a relative bargain compared with other Asian cities such as Bangkok, Jakarta and Manila.

“Malaysia is one of the countries in Asia where you get the most value for your dollar,” Mr. Lo said.

Most foreign home buyers in Malaysia tend to come from Asian countries including China, Hong Kong, Thailand, Vietnam and Japan, Mr. Lo said. There are also many buyers from Singapore, brokers said.

Most recently, there has been an inflow of investors from Sri Lanka, fleeing the ongoing political crisis there, Mr. Lo said. “By our unofficial record, the number of those buyers has grown by more than 200 percent,” he said.

Ms. Tan said that she also sees many foreign buyers from such English-speaking nations as Britain, Australia and the United States.

“The pandemic changed that a little, as some returned home to be close to families or due to changes to the Malaysia My Second Home program, and some could not leave their countries due to lockdowns, so decided to relocate home,” she said.

Foreigners need state approval to buy a home, and each Malaysian state typically has a minimum purchase value for international buyers, Mr. Choong said. On Penang Island, foreigners must spend at least 3 million ringgit ($647,000) to buy a landed residential property, and 1 million ringgit ($215,000) to buy a condo.

“The restrictions do get updated from time to time by the state, so purchasers are advised to check before committing to a purchase,” Mr. Choong said. “Currently, the consent is conditional on the foreign purchaser not being able to sell within three years of purchase,” though that condition can be waived by the state under certain circumstances.

The Malaysia My Second Home program, aimed at drawing foreigners for long-term stays with renewable visas, was suspended during the pandemic and reinstated in 2021 with new, more stringent conditions, he said.

Foreigners with Malaysia My Second Home visas can purchase any two residential properties, landed or condo, but they each must be priced at a minimum of 500,000 ringgit ($107,800), Mr. Channon said, adding that buyers should use a lawyer to purchase a property, typically costing anywhere from 0.5 percent to 1 percent of the home’s sale price.

Sales are subject to stamp duty calculated on a graduated scale, from 1 to 4 percent, along with other fees. Buyers should budget between 8 to 10 percent of the property price for closing costs, including real estate agent fees and legal fees, Mr. Channon said.

Mortgages are available from Malaysian banks, but foreigners may get better rates from banks in their home countries, Mr. Lo said.

Malay; Malaysian ringgit (1 ringgit = $0.22)

The annual taxes on this home are about 800 Malaysian ringgit ($172), Mr. Channon said.

Russell Channon, Prestige Property Group, 011-44-19-3581-7188, prestigeproperty.co.uk

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Alison Gregor

2022-10-05 13:30:18

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