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Penang continues to stand out as one of Malaysia's most attractive property markets for foreign buyers in early 2026, combining coastal lifestyle, strong healthcare infrastructure, and a thriving tech sector.
This article breaks down everything you need to know about buying residential property in Penang, from the most expensive neighborhoods to the best rental yields and which areas you should avoid.
We constantly update this blog post to make sure you have the most current information possible.
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.
What's the Current Real Estate Market Situation by Area in Penang?
Which areas in Penang have the highest property prices per square meter in 2026?
As of early 2026, the three most expensive areas in Penang are Pulau Tikus near Gurney Drive, Tanjung Tokong including the Seri Tanjung Pinang enclave, and select waterfront pockets in Gelugor.
In these premium Penang neighborhoods, you can expect to pay between RM5,500 and RM7,000 per square meter for condominiums, with landed properties commanding even higher prices that can exceed RM10,000 per square meter.
What makes these areas so expensive comes down to specific, location-driven factors:
- Pulau Tikus: walkable lifestyle with established cafes, Gurney Plaza access, and mature trees rare on the island.
- Tanjung Tokong: Seri Tanjung Pinang's master-planned waterfront and Straits Quay marina create a scarcity premium.
- Gelugor: limited landed stock near the Penang Bridge and USM, attracting families who need quick mainland access.
Which areas in Penang have the most affordable property prices in 2026?
As of early 2026, the most affordable areas in Penang for residential property are Nibong Tebal, Bukit Mertajam, Butterworth, and Balik Pulau on the island's west coast.
In these more affordable Penang neighborhoods, typical transaction prices range from RM2,500 to RM3,800 per square meter, roughly 40% to 60% below island prime areas.
The trade-offs in each area are different: Nibong Tebal is far from island jobs and requires a 45-minute commute to Bayan Lepas, Bukit Mertajam offers good local amenities but lacks the beach lifestyle, Butterworth has industrial surroundings despite good transport links, and Balik Pulau offers island living but sits on the quieter west coast with fewer international schools nearby.
You can also read our latest analysis regarding housing prices in Penang.
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Malaysia. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
Which Areas in Penang Offer the Best Rental Yields?
Which neighborhoods in Penang have the highest gross rental yields in 2026?
As of early 2026, the neighborhoods delivering the highest gross rental yields in Penang are Bayan Lepas at around 5% to 8%, Butterworth at 5% to 7%, Bukit Mertajam at 5% to 7%, and Jelutong at 4.5% to 6.5%.
Across Penang as a whole, the typical gross rental yield for residential properties sits between 4% and 6%, which is slightly higher than Kuala Lumpur due to lower entry prices relative to rents.
These top-yielding Penang neighborhoods outperform because of specific demand drivers:
- Bayan Lepas: multinational manufacturing jobs create steady tenant demand from professionals on contracts.
- Butterworth: low entry prices combine with industrial and transport adjacency for working-class tenants.
- Bukit Mertajam: high transaction volume means better liquidity and a large local tenant pool.
- Jelutong: close-in location to George Town at mid-market pricing attracts commuter tenants.
Finally, please note that we cover the rental yields in Penang here.
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Which Areas in Penang Are Best for Long-Term Rentals?
Which neighborhoods in Penang have the strongest demand for long-term tenants?
The neighborhoods in Penang with the strongest demand for long-term tenants are Bayan Lepas and Bayan Baru, Gelugor and Sungai Dua, Jelutong, and Tanjung Tokong.
In these high-demand Penang rental areas, well-priced units typically find tenants within two to four weeks, and vacancy rates tend to stay below 10% for properly maintained properties.
The tenant profiles driving demand vary by neighborhood:
- Bayan Lepas: MNC engineers and manufacturing professionals on one to three year contracts.
- Gelugor: USM students, academic staff, and bridge commuters working on the mainland.
- Jelutong: young professionals and families priced out of Pulau Tikus but wanting island access.
- Tanjung Tokong: expat families near international schools seeking long-stay furnished rentals.
The key amenity making these neighborhoods attractive is reliable access to employment centers: Bayan Lepas is minutes from the Free Industrial Zone, Gelugor has the Penang Bridge, Jelutong offers George Town proximity, and Tanjung Tokong provides international school access along the northern coast.
Finally, please note that we provide a very granular rental analysis in our property pack about Penang.
What are the average long-term monthly rents by neighborhood in Penang in 2026?
As of early 2026, monthly rents in Penang vary significantly depending on the neighborhood, ranging from around RM1,200 in mainland areas to RM6,000 or more in premium island locations.
For entry-level apartments in the most affordable Penang neighborhoods like Butterworth or Bukit Mertajam, typical rents fall between RM1,200 and RM2,200 per month for a basic two-bedroom unit.
In mid-range Penang neighborhoods such as Jelutong or Gelugor, expect to pay between RM1,800 and RM3,500 per month depending on the building age and furnishing level.
In the most expensive Penang neighborhoods like Tanjung Tokong or Seri Tanjung Pinang, high-end apartments rent for RM3,000 to RM6,000 or more per month, especially for seaview units with full furnishing.
You may want to check our latest analysis about the rents in Penang here.
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 Are the Up-and-Coming Areas to Invest in Penang?
Which neighborhoods in Penang are gentrifying and attracting new investors in 2026?
As of early 2026, the neighborhoods in Penang that are gentrifying and attracting new investor interest include Jelutong with its waterfront redevelopment, Gelugor near the USM corridor, and Batu Kawan as the mainland's premium growth node.
These gentrifying Penang neighborhoods have experienced annual price appreciation of approximately 5% to 8% over recent years, outperforming the broader market which has seen more moderate growth of 3% to 5%.
Which areas in Penang have major infrastructure projects planned that will boost prices?
The Penang areas with major infrastructure projects expected to boost property prices are the Bayan Lepas corridor benefiting from both the airport expansion and LRT stations, plus George Town and Jelutong which will gain connectivity from the LRT Mutiara Line.
The specific infrastructure projects underway include the LRT Mutiara Line, a 29.5km light rail system with 21 stations expected to be completed by 2031, and the Penang International Airport expansion, a RM1.5 billion project that will double capacity from 6.5 million to 12 million passengers annually by 2028.
Historically in Penang, properties near announced transit stations have seen price increases of 15% to 25% between announcement and completion, based on patterns observed in other Malaysian LRT corridors like Kuala Lumpur.
You'll find our latest property market analysis about Penang here.
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Which Areas in Penang Should I Avoid as a Property Investor?
Which neighborhoods in Penang with lots of problems I should avoid and why?
The Penang neighborhoods that foreign investors should generally approach with caution include any island residential condo purchased primarily for Airbnb, highly seasonal areas like parts of Batu Ferringhi for long-term rental strategies, and new high-rise clusters with heavy competing supply.
Each problem area has specific issues:
- Island residential condos for STR: MBPP guidelines restrict short-term rentals in residential buildings, making Airbnb plans risky.
- Batu Ferringhi for long-term rental: tenant pool is thinner than employment hubs, and rents can be seasonal.
- New high-rise clusters with oversupply: you compete with many identical units, capping price growth and slowing resale.
For these areas to become viable, regulatory clarity would need to improve for island STR, Batu Ferringhi would need stronger year-round employment anchors, and oversupplied clusters would need absorption of existing inventory before new launches.
Buying a property in the wrong neighborhood is one of the mistakes we cover in our list of risks and pitfalls people face when buying property in Penang.
Which areas in Penang have stagnant or declining property prices as of 2026?
As of early 2026, the Penang areas showing the most price stagnation include older apartment clusters on the mainland without differentiating features, and certain new high-rise projects where heavy supply has led to price discounting.
These stagnant areas in Penang have experienced flat to slightly negative price movement over the past two to three years, with some older mainland stock seeing effective declines of 5% to 10% when adjusted for the broader market appreciation.
The underlying causes of stagnation differ by area:
- Older mainland apartments: plentiful substitutes exist, so buyers can always find something similar for less.
- Commodity new high-rises: developers compete on price when units are near-identical, pushing down resale values.
- Far-commute pockets: limited job accessibility makes the areas unattractive despite low prices.
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.
Which Areas in Penang Have the Best Long-Term Appreciation Potential?
Which areas in Penang have historically appreciated the most recently?
The Penang areas that have appreciated the most over the past five to ten years include premium island pockets like Pulau Tikus and Tanjung Tokong, as well as new-node developments like Batu Kawan on the mainland.
Here is how these top-performing Penang areas have grown:
- Pulau Tikus: approximately 6% to 8% annual appreciation, driven by scarcity and mature amenities.
- Tanjung Tokong: approximately 5% to 7% annual appreciation, supported by Seri Tanjung Pinang masterplan effects.
- Batu Kawan: approximately 7% to 10% annual appreciation from a lower base as IKEA and new amenities arrived.
The main driver of above-average appreciation in these Penang areas is either genuine scarcity where substitutes do not exist, as in Pulau Tikus, or transformative amenity arrival that shifts the baseline of what an area offers, as in Batu Kawan with its retail and educational anchors.
By the way, you will find much more detailed trends and forecasts in our pack covering there is to know about buying a property in Penang.
Which neighborhoods in Penang are expected to see price growth in coming years?
The Penang neighborhoods expected to see the strongest price growth in coming years are Bayan Lepas and Bayan Baru along the LRT and airport corridor, Gelugor with likely LRT adjacency, Batu Kawan with continued amenity build-out, and select George Town fringe pockets where walkable demand persists.
Projected annual growth for these high-potential Penang neighborhoods:
- Bayan Lepas: 5% to 8% annually as airport expansion and LRT construction progress.
- Gelugor: 4% to 6% annually supported by USM ecosystem and future LRT station access.
- Batu Kawan: 5% to 7% annually as the mainland premium node continues maturing.
- George Town fringe: 4% to 6% annually where heritage walkability meets limited new supply.
The single most important catalyst for future price growth in these Penang neighborhoods is the LRT Mutiara Line, which will fundamentally change commute patterns across the island's east coast corridor when it opens by 2031.
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.
What Do Locals and Expats Really Think About Different Areas in Penang?
Which areas in Penang do local residents consider the most desirable to live?
The areas that local Penang residents consider most desirable to live in are Pulau Tikus for its mature amenities, Tanjung Tokong for waterfront living, and select landed enclaves in Gelugor for family space near the bridge.
What makes each area desirable to locals is specific:
- Pulau Tikus: established hawker centers, walkable shops, and a sense of community built over decades.
- Tanjung Tokong: modern waterfront lifestyle with Straits Quay and international school proximity.
- Gelugor landed areas: rare landed homes on the island with quick mainland access via the bridge.
The typical resident demographic in these locally-preferred Penang areas includes established Malaysian professionals, multi-generational families, and returning Malaysians who value stability over speculation.
Local preferences in Penang largely align with what foreign investors target, especially in premium areas, but locals often prioritize proximity to extended family and specific schools over pure investment return, which can create slight pricing divergence.
Which neighborhoods in Penang have the best reputation among expat communities?
The Penang neighborhoods with the best reputation among expat communities are Tanjung Tokong and Seri Tanjung Pinang, Pulau Tikus near Gurney Drive, and Batu Ferringhi for beach lifestyle seekers.
What expats value in each of these Penang neighborhoods:
- Tanjung Tokong: international-standard condos, Straits Quay dining, and proximity to Dalat or Uplands schools.
- Pulau Tikus: central location, walkable cafes, and established medical facilities nearby.
- Batu Ferringhi: beach access and resort atmosphere for those prioritizing lifestyle over urban convenience.
The typical expat profile in these popular Penang neighborhoods includes MM2H visa holders, retirees from Western countries and East Asia, regional business travelers with families, and digital nomads seeking affordable coastal living with good internet.
Which areas in Penang do locals say are overhyped by foreign buyers?
The Penang areas that locals commonly say are overhyped by foreign buyers include Batu Ferringhi for investment purposes, any island residential condo marketed as an "Airbnb opportunity," and some newer waterfront projects priced on views alone.
Why locals believe these areas are overvalued:
- Batu Ferringhi: seasonal tourism creates income volatility that marketing materials often understate.
- Island "Airbnb" condos: MBPP restrictions make short-term rental plans legally questionable in residential buildings.
- View-premium waterfront projects: you pay a premium for sunsets but tenant demand may not support the price.
Foreign buyers typically see beach proximity, Instagram-worthy views, and "passive income" potential in these areas, while locals know that year-round rental demand is weaker than it appears and that regulatory enforcement can change.
By the way, we've written a blog article detailing the experience of buying a property as a foreigner in Penang.
Which areas in Penang are considered boring or undesirable by residents?
The Penang areas that residents commonly consider boring or undesirable include far-commute mainland pockets in Seberang Perai Selatan for island workers, and commodity high-rise clusters where nothing distinguishes one building from another.
Why residents find these areas undesirable:
- Far-commute mainland areas: 45+ minute drives to island jobs with no compensating lifestyle or amenity benefit.
- Commodity high-rise clusters: no character, identical buildings, and weak community development.
- Isolated pockets without walkable amenities: car-dependent living with nothing within walking distance.
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 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 Name | Why It's Authoritative | How We Used It |
|---|---|---|
| NAPIC | Malaysia's official government property statistics body. | We used it to anchor state-level market cycles and supply signals. We then cross-checked with transaction microdata from Brickz. |
| Brickz | Transaction-based dataset widely used in Malaysia. | We used it as our neighborhood price tape to compare areas consistently. We treated it as a micro-level complement to NAPIC's macro reporting. |
| EdgeProp | Major Malaysian property platform with standardized insights. | We used it to estimate gross yields by bedroom band. We cross-checked rent and price ratios against transaction medians. |
| Bank Negara Malaysia | Central bank's published policy rate time series. | We used it to state the financing environment in early 2026. We linked this to buyer affordability narratives. |
| DOSM | Malaysia's national statistics agency for income data. | We used it to calibrate what locals can afford versus market prices. We sanity-checked rent levels against income capacity. |
| PTG Penang | State land authority for foreign purchase approvals. | We used it to explain state-consent mechanics foreigners face. We paired it with national tax sources for the full cost stack. |
| Buletin Mutiara | Penang state-linked outlet quoting MBPP leadership. | We used it for STR regulation clarity on the island. We avoided recommending Airbnb in non-compliant building types. |
| AirDNA | Widely used short-term rental analytics provider. | We used it to estimate STR occupancy, rates, and revenue potential. We triangulated findings against MBPP regulatory constraints. |
| MRT Corp | Official developer and asset owner of the LRT project. | We used it to confirm LRT alignment and station locations. We mapped likely price impact zones along the corridor. |
| PropertyGuru | One of Malaysia's largest property listing portals. | We used it to verify current rent bands and listing activity. We cross-referenced with EdgeProp for consistency checks. |
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