PETALING JAYA: Penang’s residential property market was the second-best performing market in Southeast Asia with an annual growth of 5.6% in the first half of 2023 (H1 2023), according to Knight Frank’s Asia-Pacific Residential Index for H1 2023 report.

Penang saw prices rise 5.78%, while Kuala Lumpur’s increased by 0.34% year-on-year, the report said.

Due to its premium shopping malls, tourist attractions, beaches, and delicious cuisine, Penang island is a well-liked area to invest in, particularly for foreign investors.

On the Penang island, residential property such as a 1,000 sq ft condominium unit might range as much as RM500,000 to RM1 million, it said in a statement today.

The report, which tracks the movement of average residential prices within the Asia-Pacific region across 25 cities, showed that 14 cities recorded positive annual price growth in H1 2023, where Singapore ranked first at 8% while the average residential price growth within Asia-Pacific was at -0.2%.

Knight Frank Malaysia’s senior executive director of research and consultancy Judy Ong said with the recent pause in the overnight policy rate (OPR) hike as well as improved labour market conditions will continue to support the residential market.

“Improvements in road and rail links will underpin demand for well-conceptualised residential products in key cities and moving forward, prices are expected to hold steady,” said Ong.

Knight Frank Asia-Pacific head of research Christine Li said the Asia-Pacific region maintains a balanced outlook, adapting to global challenges while displaying resilience in major markets.

“Steady sales momentum, positive year-on-year growth in select markets, and buyer confidence in the face of diminishing affordability underscore the region’s promising outlook.

“The rise in income levels, coupled with a strong aspiration for property ownership, will sustain demand in emerging markets such as India and Malaysia,” said Li.