I get this question from almost every foreign buyer who reaches out to me: "Zac, should I buy in Penang, JB, or KL?" It is a genuinely good question — and the honest answer is that the right city depends entirely on what you are actually trying to achieve. All three markets have real merit. All three also have traps that catch buyers who did not do their homework.
Let me walk you through how I think about each one, having worked with buyers coming in from Singapore, Hong Kong, Taiwan, the UK, and Australia. The frameworks I use with my own clients are the same ones below.
The Basics: Entry Prices and Foreign Buyer Rules
Before comparing lifestyle or yield, you need to know if you can even buy in each market at your budget.
| City / Region | Foreign Min Price | State Levy | LTV (Foreign) | RPGT Yr 1-5 |
|---|---|---|---|---|
| Penang Island | RM 1,000,000 | None (as of 2026) | 70% max | 30% |
| Penang Mainland | RM 600,000 | None (as of 2026) | 70% max | 30% |
| Johor Bahru | RM 600,000 (general) | 2% on top of stamp duty | 70% max | 30% |
| Kuala Lumpur | RM 1,000,000 | None federally | 70% max | 30% |
State consent is required for all foreign purchases in Penang, and the same principle applies across Malaysian states. Your solicitor manages the application, but factor several months of additional processing time into your timeline.
The Johor state levy is a detail many buyers miss until they see their final legal costs — it effectively adds 2% to your acquisition cost upfront. That matters when you are modelling returns.
Penang: The Lifestyle City With Real Yield Upside
In my experience, buyers who end up happiest with their purchase are almost always the ones who bought in Penang for the right reasons. This is not a generic compliment — there is something structurally different about George Town as a place to own property.
What makes Penang work for foreign buyers:
Penang Island is a UNESCO World Heritage city with a genuine food, arts, and culture identity that does not feel manufactured. English is widely spoken at a conversational level you rarely find elsewhere in Southeast Asia outside Singapore. The private healthcare ecosystem — Penang Adventist, Island Hospital, Gleneagles — is mature and internationally accredited. International schools including Dalat, Uplands, and Straits International serve families at multiple curriculum levels.
Direct flight connectivity from Singapore, Hong Kong, Taiwan, and select Australian cities means buyers can actually reach their asset without routing through KL.
Yield numbers: Asking prices on PropertyGuru and iProperty range from roughly RM450 to RM1,400 PSF depending on location and product type. Note that asking prices typically run 5 to 15% above transacted prices, so factor that in when modelling yield. Gross yields in Penang's Bayan Lepas tech corridor and areas near the health tourism cluster run 3.5% to 5.5% — driven by a genuine pool of corporate and medical tenants who are not going away.
What Penang cannot offer: There is no MRT on the island. You need a car for most daily errands outside the inner city core. The island is geographically constrained, which keeps supply tight but also means PSF is higher than outer KL or parts of JB. If you need a global CBD and a 90-seat aircraft to every continent, KL is more practical.
Best for: Lifestyle buyers, retirees, MM2H holders, tech and medical sector yield investors, families prioritising international schooling in a lower-density environment.
Johor Bahru / Iskandar: Lowest Entry, Highest Execution Risk
JB has been the "coming soon" story of Malaysian property for a decade. The difference in 2026 is that the Johor-Singapore RTS link — which has been years in the planning — is now reportedly in its final construction phase, with opening projected around 2026 to 2027. That changes the calculus meaningfully for a specific buyer profile.
What JB offers:
The RM600,000 entry point on the mainland is the most accessible foreign buyer threshold in Malaysia, and that matters if you are allocating capital across multiple markets. Lower PSF — roughly RM300 to RM900 depending on zone — means your dollar buys more built-up area.
If you are Singapore-based, the RTS connection creates the possibility of a genuine commute property or an affordable second home with Singapore employment. That is a real use case, not a speculative one.
The honest risk: I have seen buyers who went into Forest City expecting yields that never materialised. Oversupply in certain Iskandar zones is not a rumour — it is visible in vacancy data and in years of suppressed asking rents. If you are buying in JB, location selection within JB matters enormously. The RTS corridor and Medini are not the same story as Forest City or outer Pasir Gudang.
The 2% state foreign levy on top of standard stamp duty is a real cost. Model it in from day one.
Best for: Singapore-based buyers with a specific commute use case, speculative investors who have done granular zone-level research on the RTS corridor, buyers with the lowest budget threshold.
Kuala Lumpur / KLCC: Most Liquid, But a Crowded Trade
KL is Malaysia's most internationally recognisable property market and, for certain buyer profiles, the obvious choice. If you are a corporate executive based in KL with a company paying housing allowance, this is probably where you buy. If you need KLIA connectivity and a large English-speaking corporate tenant pool, KL has no domestic competition.
What KL does well:
The MRT network genuinely works and has expanded the investable footprint beyond just the KLCC core. Corporate tenants — multinationals, law firms, financial services — are concentrated here in a way that supports professional rental demand. KLCC PSF ranges from roughly RM600 to RM2,500, reflecting the range from older stock to trophy towers.
Resale liquidity is the best in Malaysia. If you need to exit, you can find buyers more readily in KL than in Penang or JB.
Where KL disappoints: The serviced apartment segment in KL has been fighting genuine oversupply for years. KLCC prices have largely stagnated for an extended period. For a buyer coming in fresh in 2026, you are not buying into obvious upside — you are buying into the most competitive, most researched market, where information is widely available and edge is hard to find without deep local knowledge.
Best for: Corporate executives placed in KL, investors who prioritise resale liquidity above yield, buyers who need KLIA global connectivity as a primary requirement.
Side-by-Side Comparison
| Factor | Penang | Johor Bahru | Kuala Lumpur |
|---|---|---|---|
| Foreign min (island/city) | RM 1M (island) / RM 600K (mainland) | RM 600K | RM 1M |
| Asking PSF range | RM 450 – 1,400 | RM 300 – 900 | RM 600 – 2,500 |
| Gross yield range | 3.5% – 5.5% | 3% – 5% | 3% – 4.5% |
| State foreign levy | None | 2% | None |
| MRT / rail | No (island) | RTS link ~2026-27 | Yes |
| English environment | Strong | Moderate | Strong in expat zones |
| International schools | Yes | Limited | Yes |
| Heritage / lifestyle appeal | High | Moderate | High (urban) |
| Oversupply risk | Low-moderate | High in some zones | Moderate (serviced apts) |
| Best exit liquidity | Moderate | Moderate | Highest |
Who Should Buy Where
Buy in Penang if: You want to live there, or you want a tenant pool of tech and medical professionals in a genuinely supply-constrained island city. The UNESCO heritage setting is not a marketing tagline — it affects long-term liveability and sustained demand.
Buy in JB if: You are Singapore-based, you have done specific research on the RTS corridor, and you understand that your returns depend on Singapore economic spillover rather than standalone Johor fundamentals.
Buy in KL if: You are being placed there corporately, you need global flight connectivity as your primary driver, or you specifically want Malaysia's most liquid resale market even at the cost of tighter yields.
For more detail on the Penang-specific purchase process, see my full foreign buyer guide for Penang. Singapore-based buyers comparing both sides of the Causeway will find the Singapore buyer Penang guide useful. And if you want the investment case specifically, I have covered whether Penang property is a good investment in depth.
Check your buying power in Penang →DSR-based ceiling using current rates and 70% LTV for foreign buyers.Zac’s Take
Zac Ong
My honest take after working with buyers across all three markets: most foreign buyers who end up unhappy picked their city based on price per square foot or yield projections on a spreadsheet, and ignored how they would actually live in or manage the asset. Penang wins this comparison for the majority of lifestyle and retirement buyers, not because I am based here, but because the fundamentals — English environment, healthcare, schools, heritage setting, constrained island supply — compound in ways that a lower PSF in JB or a more liquid exit in KL simply does not offset. JB's RTS story is real but it is still a speculative corridor play, and Forest City is a cautionary tale worth reading before committing. KL is the right answer for a narrower profile than most buyers realise when they are first comparing cities.
What to Do Next
If you are still deciding between the three, the clearest next step is to be specific about your use case. Are you buying to live there? To rent and hold for ten years? To have a base while on MM2H? The answer almost always points to one city more naturally than the others.
I work with foreign buyers across all three markets, but my ground-level knowledge is deepest in Penang — and if Penang is in your shortlist, I am happy to walk through the numbers on specific projects and locations with you. You can also browse current Penang new launches to get a sense of what is available at the RM1M and above threshold, or run the ROI calculator with your own inputs.