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If you're thinking about buying property in Penang, you're probably wondering what's really happening with housing prices right now and where they're headed.
In this article, we break down the current property price trends in Penang as of the first half of 2026, explain what's driving the market, and share our forecasts for the next 5 to 10 years.
We update this blog post regularly so you always have the freshest data available.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Penang.
Insights
- Penang's median home price sits around RM370,000 in January 2026, but the average reaches RM450,000 because high-end island properties pull the figure up significantly.
- Landed homes in Penang have grown 3% to 6% over the past year, while high-rise condos struggled to match that pace due to oversupply in certain pockets.
- Batu Kawan on Penang's mainland is emerging as a price growth leader, benefiting from RM12.5 billion in approved manufacturing investments in the first half of 2025.
- The LRT Mutiara Line project is already influencing buyer behaviour, with properties near planned stations seeing early repricing before the line is even completed.
- Penang's rental yields average around 5% for apartments, making it competitive with other Southeast Asian coastal markets for income-focused investors.
- The state's E&E and semiconductor sector employs a large share of its workforce, meaning global tech cycles have an outsized impact on local housing demand.
- Over 5 years, we expect Penang residential prices to grow between 18% and 30% in total, roughly 3.3% to 5.4% per year on average.
- Terrace and semi-detached houses consistently outperform condos on appreciation because island land is scarce and family upgraders compete heavily for these homes.
- Gurney Drive and Tanjung Bungah remain Penang's priciest areas, but their premiums can feel stretched when compared to rental yields and future upside potential.
- Bank Negara Malaysia held the OPR at 2.75% heading into 2026, which keeps mortgage costs meaningful but not extreme for most Penang buyers.
What are the current property price trends in Penang as of 2026?
What is the average house price in Penang as of 2026?
As of early 2026, the estimated average house price in Penang across all residential types is around RM450,000 (approximately USD 100,000 or EUR 92,000), though the median sits closer to RM370,000 because a tail of expensive island condos and landed homes pulls the average higher.
When it comes to price per square meter, properties in Penang typically transact around RM5,000 per sqm (about USD 1,110 or EUR 1,020), with most deals falling within a range of RM4,300 to RM6,500 per sqm depending on location and building quality.
To give you a realistic picture of what most buyers actually pay, roughly 80% of residential purchases in Penang fall between RM250,000 and RM850,000 (USD 55,000 to USD 190,000 or EUR 51,000 to EUR 175,000), with the lower end representing mainland apartments and the upper end covering island terrace houses or well-located condos.
How much have property prices increased in Penang over the past 12 months?
Over the past 12 months, residential property prices in Penang have increased by an estimated 2% to 4% overall, which reflects a market that is growing modestly rather than booming.
This range varies significantly by property type: landed homes like terrace houses and semi-detached units typically saw gains of 3% to 6%, while high-rise condos and apartments grew by just 0% to 3% because of heavier competition in some oversupplied segments.
The single most significant factor behind this price movement is Penang's strong job market tied to the electronics and semiconductor industry, which continues to attract workers and support housing demand even as global uncertainty lingers.
Which neighborhoods have the fastest rising property prices in Penang as of 2026?
As of early 2026, the top three neighborhoods with the fastest rising property prices in Penang are Batu Kawan (including Bandar Cassia), Bayan Lepas (near the airport and industrial parks), and Gelugor (a central island location with good access to employment hubs).
In these areas, annual price growth is estimated at roughly 5% to 8% for Batu Kawan, 4% to 6% for Bayan Lepas, and 4% to 6% for Gelugor, outpacing the broader Penang market average.
The main demand driver behind this growth is the concentration of manufacturing jobs and improved transport connectivity, which attracts both local upgraders and workers relocating for employment opportunities.
By the way, you will find much more detailed price ranges across neighborhoods in our property pack covering the real estate market in Penang.
We have made this infographic to give you a quick and clear snapshot of the property market in Malaysia. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
Which property types are increasing faster in value in Penang as of 2026?
As of early 2026, the ranking of property types by appreciation rate in Penang places terrace and semi-detached houses at the top, followed by detached bungalows in prime locations, then well-positioned condos near employment nodes, and finally serviced residences which face more price competition.
Terrace and semi-detached homes, the top performers, are seeing annual appreciation of roughly 4% to 7% in family-friendly areas with good access to jobs and schools.
The main reason these landed properties outperform is simple: Penang Island has limited land, so new supply of terrace and semi-detached homes is constrained while demand from upgrading families remains steady.
Finally, if you're interested in a specific property type, you will find our latest analyses here:
- How much do properties cost in Penang?
- How much should you pay for a house in Penang?
- How much should you pay for an apartment in Penang?
- How much should you pay for a condo in Penang?
- How much should you pay for a studio in Penang?
What is driving property prices up or down in Penang as of 2026?
As of early 2026, the top three factors driving property prices in Penang are strong employment in the electronics and semiconductor sector, anticipation of new infrastructure like the LRT Mutiara Line, and limited land availability on Penang Island.
Among these, the strongest upward pressure comes from the E&E industry's hiring momentum, because Penang attracted over RM12 billion in approved manufacturing investments in the first half of 2025 alone, which translates directly into housing demand from workers and their families.
If you want to understand these factors at a deeper level, you can read our latest property market analysis about Penang here.
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What is the property price forecast for Penang in 2026?
How much are property prices expected to increase in Penang in 2026?
As of early 2026, we expect residential property prices in Penang to increase by approximately 3% to 6% over the full calendar year, with landed homes likely at the higher end and high-rise units at the lower end.
Different analysts offer a range of forecasts: conservative estimates sit around 2% to 4% annual growth, while more optimistic projections reach 5% to 7% for prime locations benefiting from infrastructure projects.
The main assumption underlying most price increase forecasts for Penang is that the state's manufacturing investment pipeline and job creation will remain strong, supported by Malaysia's stable economic growth of around 4.5% to 5.5%.
We go deeper and try to understand how solid are these forecasts in our pack covering the property market in Penang.
Which neighborhoods will see the highest price growth in Penang in 2026?
As of early 2026, the neighborhoods expected to see the highest price growth in Penang include Batu Kawan and Bandar Cassia on the mainland, Simpang Ampat near the industrial corridor, Bayan Lepas close to the airport, and Gelugor on the island.
For these top neighborhoods, projected price growth ranges from 5% to 9% for the year, which is notably higher than the 3% to 6% expected for Penang as a whole.
The primary catalyst driving expected growth in these areas is their proximity to major employment centers and planned transport links, which makes them attractive to both owner-occupiers and investors seeking rental income.
One emerging neighborhood in Penang that could surprise with higher-than-expected growth is Balik Pulau on the island's western side, where limited new supply and spillover demand from pricier island areas are starting to push prices up.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Penang.
What property types will appreciate the most in Penang in 2026?
As of early 2026, terrace houses and semi-detached homes are expected to appreciate the most in Penang, followed by well-located condos near employment hubs, while serviced residences are likely to lag behind.
For the top-performing property type, terrace and semi-detached homes, projected appreciation is around 4% to 7% for the year in areas with good schools and job access.
The main demand trend driving appreciation for landed homes in Penang is the family upgrader market, as households with growing incomes seek more space and private outdoor areas that high-rise living cannot provide.
The property type expected to underperform is serviced residences in oversupplied pockets, where too much competing inventory gives buyers negotiating power and limits price growth to 1% to 3% at best.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Malaysia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
How will interest rates affect property prices in Penang in 2026?
As of early 2026, the current interest rate environment is having a stabilizing effect on Penang property prices, keeping buyer demand steady without creating either a cheap-money boom or a financing crunch.
Bank Negara Malaysia's Overnight Policy Rate (OPR) stands at 2.75%, and most analysts expect mortgage rates to remain broadly stable through 2026 unless inflation or global conditions shift significantly.
If mortgage rates were to rise by 1%, it would typically reduce borrowing capacity by around 8% to 10%, which tends to slow transaction volumes first and then put modest downward pressure on prices, particularly in the more rate-sensitive condo segment.
You can also read our latest update about mortgage and interest rates in Malaysia.
What are the biggest risks for property prices in Penang in 2026?
As of early 2026, the three biggest risks for property prices in Penang are a global tech downturn that would hurt the state's E&E sector, persistent oversupply in certain high-rise segments, and rising living costs squeezing household budgets.
Among these, the risk with the highest probability of materializing is high-rise oversupply in specific micro-markets, because developers have been launching aggressively in recent years and some projects struggle to find enough buyers at asking prices.
We actually cover all these risks and their likelihoods in our pack about the real estate market in Penang.
Is it a good time to buy a rental property in Penang in 2026?
As of early 2026, it is generally a favorable time to buy a rental property in Penang if you focus on locations near employment centers where tenant demand is consistent, such as Bayan Lepas, Gelugor, or Batu Kawan.
The strongest argument in favor of buying now is that Penang's job market remains robust thanks to ongoing manufacturing investment, which supports steady rental demand and gross yields around 4% to 5% for well-located apartments.
On the other hand, the strongest argument for waiting is that high-rise oversupply in some pockets means you may be able to negotiate better prices or terms if you are patient, especially for serviced residences where competition among sellers is high.
If you want to know our latest analysis (results may differ from what you just read), you can read our assessment on whether now is a good time to buy a property in Penang.
You'll also find a dedicated document about this specific question in our pack about real estate in Penang.
Buying real estate in Penang can be risky
An increasing number of foreign investors are showing interest. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
Where will property prices be in 5 years in Penang?
What is the 5-year property price forecast for Penang as of 2026?
As of early 2026, we estimate cumulative property price growth in Penang over the next 5 years (through January 2031) to be in the range of 18% to 30% for all residential types combined.
Looking at the range of scenarios, optimistic projections reach up to 35% total growth if interest rates ease and the tech cycle stays strong, while conservative estimates sit around 5% to 12% if global conditions weaken and oversupply persists.
This translates to a projected average annual appreciation rate of roughly 3.3% to 5.4% per year over the 5-year period, which is healthy but not spectacular by historical standards.
The key assumption most forecasters rely on is that Penang's electronics and semiconductor sector will continue attracting investment and creating jobs, which sustains housing demand from a growing workforce.
Which areas in Penang will have the best price growth over the next 5 years?
The top three areas in Penang expected to have the best price growth over the next 5 years are Batu Kawan and Bandar Cassia on the mainland, Bayan Lepas and Sungai Ara near the airport, and transit-oriented pockets along the planned LRT Mutiara Line corridor.
For these top-performing areas, projected 5-year cumulative price growth could reach 25% to 40%, assuming infrastructure delivery stays on track and job creation continues.
This is broadly consistent with our shorter 2026 forecast, but the 5-year horizon gives more weight to infrastructure completion effects, which tend to materialize fully only as projects near opening.
One currently undervalued area with the best potential for outperformance over 5 years is Bukit Mertajam and Alma on the mainland, where prices remain accessible but connectivity improvements are steadily making these neighborhoods more attractive to commuters.
What property type will give the best return in Penang over 5 years as of 2026?
As of early 2026, terrace houses in family-friendly neighborhoods near employment corridors are expected to give the best total return over 5 years in Penang, combining solid appreciation with steady rental demand.
For this top-performing property type, projected 5-year total return (including both price appreciation and rental income) could reach 35% to 50%, depending on location and entry price.
The main structural trend favoring terrace houses is Penang Island's severe land scarcity, which means new landed supply is limited while demand from upgrading families remains persistent.
For investors seeking the best balance of return and lower risk, mid-market condos near Bayan Lepas or Gelugor offer a compelling option because they benefit from consistent tenant demand and require less capital than landed homes.
How will new infrastructure projects affect property prices in Penang over 5 years?
The top three major infrastructure projects expected to impact Penang property prices over the next 5 years are the LRT Mutiara Line connecting key island locations, the Penang International Airport expansion, and continued development of the Batu Kawan mainland growth node.
Properties near completed infrastructure projects in Penang typically command a price premium of 10% to 20% compared to similar homes further away, with the exact premium depending on walking distance and quality of feeder access.
The specific neighborhoods that will benefit most from these developments include Komtar and George Town (LRT), Bayan Lepas and Sungai Ara (airport), and Batu Kawan with Bandar Cassia (mainland hub), where buyers are already pricing in future convenience gains.
How will population growth and other factors impact property values in Penang in 5 years?
Penang's population is projected to grow at around 1% to 1.3% annually over the next 5 years, which translates into steady (though not explosive) new housing demand, particularly in areas accessible to manufacturing jobs.
The demographic shift with the strongest influence on Penang property demand is the shrinking household size (now averaging 3.5 persons) combined with rising incomes, which means more households competing for housing even as overall population growth slows.
Migration patterns will continue to favor Penang, as the state attracts more workers from other Malaysian states than it loses, with the bulk of new arrivals coming from Perak, Kedah, and Johor seeking employment in the E&E sector.
Properties that will benefit most from these demographic trends are practical family homes (terrace houses, well-sized condos) in mainland growth areas like Batu Kawan and Bukit Mertajam, where new households are forming and affordability is better than on the island.
We made this infographic to show you how property prices in Malaysia compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
What is the 10 year property price outlook in Penang?
What is the 10-year property price prediction for Penang as of 2026?
As of early 2026, we estimate cumulative property price growth in Penang over the next 10 years (through January 2036) to be in the range of 40% to 70% for all residential types combined.
Looking at optimistic versus conservative scenarios, the upside case reaches 80% or more if tech cycles remain strong and financing conditions ease for extended periods, while the downside case sits around 15% to 30% if global weakness persists and high-rise oversupply continues to drag on prices.
This translates to a projected average annual appreciation rate of roughly 3.4% to 5.5% per year over the 10-year period, which is consistent with Penang's long-run historical performance.
The biggest uncertainty factor in making 10-year predictions for Penang is the global semiconductor cycle, because the state's economy is unusually dependent on E&E manufacturing and any prolonged downturn would directly affect housing demand and prices.
What long-term economic factors will shape property prices in Penang?
The top three long-term economic factors that will shape property prices in Penang over the next decade are the strength of the global semiconductor and electronics cycle, Malaysia's overall income growth relative to living costs, and major transport and connectivity upgrades.
Among these, the factor with the most positive long-term impact on Penang property values is continued investment in the E&E sector, because it brings high-quality jobs, raises local incomes, and creates sustained demand for housing across all segments.
The factor that poses the greatest structural risk is also tech-related: a prolonged global chip downturn or a shift in supply chains away from Penang would hit employment and could lead to years of flat or declining property prices in affected areas.
You'll also find a much more detailed analysis in our pack about real estate in Penang.
What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about Penang, we always rely on the strongest methodology we can ... and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source | Why It's Authoritative | How We Used It |
|---|---|---|
| NAPIC (National Property Information Centre) | Malaysia's official government property data portal under the Valuation Department. | We used it as our anchor dataset for official market trends. We cross-checked Penang estimates against national quarterly patterns. |
| NAPIC Property Market Q3 2025 Snapshot | Direct NAPIC publication summarizing transactions and the house price index. | We used it to ground recent trends through Q3 2025. We then carefully extended into January 2026 using consistent indicators. |
| Department of Statistics Malaysia (DOSM) | Malaysia's official statistics agency responsible for CPI and population data. | We used CPI to separate real price growth from inflation effects. We also used population data to understand demographic demand. |
| Reuters | High-standard international wire service with reliable financial reporting. | We used it to confirm Bank Negara's OPR decisions and macro rationale. We then mapped that to Penang buyer behavior. |
| Invest Malaysia | Official portal reproducing Bank Negara monetary policy statements. | We used it to anchor the rate environment feeding affordability. We cross-checked with Reuters to avoid single-source dependence. |
| World Bank Malaysia Economic Monitor | International authority providing core macro references for Malaysia. | We used it to set the macro base case for demand through 2031. We triangulated with Penang's investment momentum. |
| InvestPenang | Penang's official state investment agency reporting approved investment figures. | We used it to explain job-driven housing demand in Bayan Lepas and Batu Kawan. We justified why certain corridors outperform. |
| Penang Institute | The state's policy think tank providing Penang-specific economic analysis. | We used it to tailor the story to Penang's unique E&E ecosystem. We translated that into practical neighborhood guidance. |
| MRT Corp (LRT Mutiara Line) | Project owner's official description of scope and alignment. | We used it to justify why station corridors see land value repricing. We translated this into named neighborhood examples. |
| CAAM (Civil Aviation Authority of Malaysia) | Regulator-grade source for airport works and timelines. | We used it to support the connectivity upgrade thesis near Bayan Lepas. We cross-checked with mainstream reporting. |
| Knight Frank Malaysia | Major global real estate consultancy with established research methodology. | We used it as a private-sector sense check on segment direction. We never let it override official statistics. |
| Henry Butcher Malaysia | Long-established Malaysian valuation group publishing structured outlooks. | We used it for Penang submarket color and product dynamics. We validated with transaction-based indicators. |
| Brickz | Aggregates Malaysian transaction data in transparent price-per-sqft format. | We used it to derive credible Penang-wide median prices. We triangulated direction with official NAPIC snapshots. |
| EdgeProp Malaysia | Major property publication citing developers and market datapoints. | We used it to name on-the-ground neighborhoods matching the data. We treated it as secondary context only. |
| Global Property Guide | International property research platform with rental yield data. | We used it to benchmark gross rental yields across Penang. We incorporated these into total return estimates. |
| Penang Property Talk | Local property news portal tracking Penang-specific developments. | We used it for timely local market commentary. We validated key claims against official and established sources. |
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If you want to go deeper, you can read the following: