The Malaysian residential property market has shown resilience amid economic challenges, with potential for growth driven by infrastructure developments and shifting consumer preferences towards the rental market. However, the market may face constraints on further price increases in the face of weak demand and increased listings.
Infrastructure development announcements have positively impacted the local market, notably in the Johor Residential Market, where Forest City’s designation as a Special Financial Zone and the ongoing Rapid Transit System linking Johor to Singapore drove increased conversions in Q3.
Anticipated changes in government policy and incentives announced in Budget 2024 could weigh positively on the property market.
Furthermore, the rental market experienced a rebound in demand during Q3, following two consecutive quarters of decline. This shift may be attributed to higher costs, prompting some property seekers to transition from the sales market to the rental market.
Download the report to read later!
Download ReportReport Highlights
- Get the Guru View
- Malaysia Property Sale Market Index
- Malaysia Property Rental Market Index
- Conclusion
Get The Guru View
Malaysia Property Sale Market Index
Amidst rising asking prices and an uncertain economic forecast, the Sale Demand Index, which monitors conversion rates of listings, declined by 5.9% QoQ in Q3 2023. The demand observed in Q3 2023 mirrors that of Q2 2020, prior to the pervasive impacts of COVID and the transition to remote work in the market.
The Sale Demand Index for high-rise homes showed a slight decline, while the demand for landed homes decreased by 3.0% QoQ in sales. The sharper fall in demand for landed homes in Q3 can be attributed to their higher value, signifying increased costs in a high-interest rate scenario. Overall, the index dropped by 9.5% QoQ.
Seller asking prices seem to be nearing their peak, with the Sale Price Index seeing a modest increase of 1.5% QoQ. The surge in market listings has also tempered the growth of the Sale Supply Index, which rose by 4.0% QoQ.
Malaysia Property Rental Market Index
The Rental Demand Index saw a resurgence in Q3 2023 of 10.8%, following declines in both Q1 and Q2. This index experienced a significant boost as more buyers pivot to renting. The Rental Supply Index has also increased by 9.2%, albeit at a more subdued rate.
Amidst rising demand, asking rents have seen a consistent upward trend since Q4 2021. By Q3 2022, these rents had surged by nearly 24%, leading certain segments to advocate for heightened focus on the rental market.
Want to know more about the sale and rental markets in Penang, and Johor?
Download ReportConclusion
The recently announced Budget 2024 is expected to have a positive impact on the property sector, thanks to ongoing government efforts to boost homeownership and promising developments in major infrastructure projects.
Amidst uncertain economic conditions and a high-interest rate landscape, potential buyers are expected to exercise caution. However, this uncertainty hasn’t led to an economic downturn, so property owners remain unmotivated to reduce their asking prices. Given the current scenario, the market is likely to remain stable, but there’s a noticeable shift as property seekers increasingly lean towards the rental market.
Read the full PropertyGuru Malaysia Property Market Report Q4 2023:
If you’re interested in more property insights, check out our prior Property Market Reports!
PropertyGuru Malaysia Property Reports
Get past insights on Malaysia’s property sector here
Disclaimer: The information is provided for general information only. PropertyGuru International (Malaysia) Sdn Bhd makes no representations or warranties in relation to the information, including but not limited to any representation or warranty as to the fitness for any particular purpose of the information to the fullest extent permitted by law. While every effort has been made to ensure that the information provided in this article is accurate, reliable, and complete as of the time of writing, the information provided in this article should not be relied upon to make any financial, investment, real estate or legal decisions. Additionally, the information should not substitute advice from a trained professional who can take into account your personal facts and circumstances, and we accept no liability if you use the information to form decisions.