Malaysia Residential Real Estate Information
Overview of Malaysia’s Residential Real Estate
| Year | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
| GDP in billion Malaysian ringgit | 17.56 | 18.97 | 20.61 | 22.29 | 24.1 | 20.17 | 17.68 | 23.24 | 24.37 |
Real Estate Properties in Malaysia accounted for 24.37 Billion Malaysian Ringgit in Malaysia’s Gross Domestic Product (GDP) in 2023 after a downtrend due to market uncertainty during the COVID-19 period from 2020 to 2021.
| Housing type | Residential | Shops | Serviced Apartments | Industry | Small Office, Home Ofiice (SOHO) | Hotel | Purpose-built office | Shopping complex |
| no of properties (in 1,000s) | 6,080.28 | 547.85 | 319.15 | 120.23 | 55.63 | 3.52 | 2.59 | 1.06 |
Residential Properties held a whopping 85.3% share of the Malaysian Property Market Share in 2022, much greater than Non-Residential Properties at 14.7%. Non-Residential properties include Shops, Services Apartments, Industrial, Small Office and Home Office (SOHO), Hotels, Purpose-Built Offices and Shopping Complexes. Comprising four-fifths of the market, Residential Properties influence and dominate the real estate scene in Malaysia.
The Malaysian economy grew by 3.3% year-over-year(y-o-y) in the third quarter of 2023. This is mainly due to the domestic demand as Malaysia’s GDP is forecasted to increase by 4.0% – 5.0% in 2024. With inflation projected to float around the 2% and 3.5% mark in 2024, interest rates are set to remain the same.
The foundational aspects of the residential market, overall home demand, supply and prices of these homes have seen some fluctuations over the years.
Rural vs Urban Households in Malaysia
| Number of Urban and Rural | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
| Urban Households | 6,171.30 | 6,367.40 | 6,565.90 | 6,723.50 | 6,876.80 | 7,149.30 |
| Rural Households | 1,679.60 | 1,674.00 | 1,668.70 | 1,652.90 | 1,636.50 | 1,647.90 |
From 2018 to 2023, the number of Urban Households has increased consistently while Rural Households have comparatively plateaued. With more households becoming financially savvy and informationally well-equipped, rural families continue to seek better job opportunities. As rural regions continue to shift towards higher value-added sectors and bigger Malaysian cities, urbanisation is set to intensify in Malaysia.
Types of Households and their trends
For all types of tenures, there is an uptrend with every type experiencing stable growth from 2018 to 2022 and higher-than-normal growth in 2023 where Home Ownership increased the most.
Households By Type of Dwelling
Both single-family housing and multi-family housing have seen consistent growth. In Malaysia, Single-Family housing consists of Houses, Detached, Semi-Detached, Terraced Houses and Cluster Homes. Multi-Family housing consists of Apartments and Flats. Both Single-Family and Multi-Family housing have gradually increased from 2018 to 2023, Multi-Family housing remains lower than Single-Family housing. This is maybe due to the land area occupied by each type, Multi-Family housing such as Apartments are built vertically to capitalise on limited space whereas Single-Family housing such as houses are built on a larger land area.
Challenges
The primary challenge for Malaysia’s housing market is costly houses. The big price tags on homes drive Malaysians to rent them out rather than own a home. According to NAPIC’s Malaysia Annual House Price Index Point, the House Price Index is on an uptrend and continues to grow with no cooling-off measures. Adding on, the prices of homes are not anywhere near Malaysia’s CPI and still above their neighbouring countries. This leads to low home ownership and an unstable housing situation for Malaysians as living on lease is seen as a temporary solution rather than a stable one.
Opportunities
Budget 2024 proposed revisions to relax MM2H (Malaysia My Second Home) requirements and also increase the allocation of the Skim Jaminan Kredit Perumahan, these second home and first home buyers in purchasing homes. Skrim Jaminan Kredit Perumahan is a home ownership initiative for first-time home buyers to obtain financing of up to 110%. More homes catering to multiple generations and focusing on senior living spaces are expected to launch. The state government plans to introduce a new affordable housing category for households earning a combined income of RM5,000 per month. This initiative aims to address the housing needs of young graduates and households with moderate incomes. As affordability is the primary concern or barrier for property buyers, developers have downsized newly launched high-rise units to achieve more affordable selling prices.
Despite their political tensions and recent changes in the government, Malaysia should focus on making homes affordable for everyone. Along with urbanisation efforts and redevelopment stages running throughout the country, the demand for homes is high and with more affordable housing this imbalance can be capitalised.
