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Malaysia's rental market has reached a five-year high as of September 2025, with nationwide average residential rents hitting RM2,052 per month. The Malaysian property rental sector shows significant variation across cities, property types, and tenant demographics, making it crucial for investors and residents to understand current pricing dynamics.
If you want to go deeper, you can check our pack of documents related to the real estate market in Malaysia, based on reliable facts and data, not opinions or rumors.
Malaysian rental market has reached a five-year high with nationwide average rents at RM2,052/month and Kuala Lumpur leading at RM2,847/month as of September 2025.
Rental yields range from 4.26% in Kuala Lumpur to over 6% in Johor Bahru, with secondary cities outperforming the capital on investment returns.
| City | Average Monthly Rent | Rental Yield | Property Type Focus |
|---|---|---|---|
| Kuala Lumpur | RM2,847 | 4.26% | Condos, Serviced Residences |
| Penang | RM1,600-RM2,200 | 3.77-5.74% | Apartments, Landed Houses |
| Johor Bahru | RM1,600-RM1,900 | 5.47-6.22% | Condos, Terraced Houses |
| National Average | RM2,052 | 5.10% | Mixed Property Types |
| Studios (KL) | RM1,200-RM1,600 | Variable | Young Professionals |
| 2-Bedroom Units | RM1,600-RM2,500 | Variable | Couples, Small Families |
| Landed Houses | RM3,000-RM6,000 | Variable | Families, Expats |
What's the current average rent in Malaysia overall?
The nationwide average residential rent in Malaysia stands at RM2,052 per month as of September 2025, representing a five-year high and a 3.9% year-on-year increase.
This figure reflects the recovery and growth of Malaysia's rental market following the pandemic period. The increase is driven by heightened demand from both local and international tenants, particularly in urban areas where job opportunities and infrastructure development continue to attract residents.
Kuala Lumpur significantly exceeds the national average, with rents stabilizing around RM2,847 per month. This premium reflects the capital's status as Malaysia's primary business and financial hub, where demand for quality rental properties remains consistently strong.
The rental market shows resilience across different segments, with both luxury and mid-range properties experiencing steady demand. Economic recovery and increased mobility have contributed to this upward trend in rental prices nationwide.
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How do average rents differ between major cities like Kuala Lumpur, Penang, and Johor Bahru?
Kuala Lumpur commands the highest average rents at RM2,847 per month, followed by Penang at RM1,600-RM2,200, and Johor Bahru at RM1,600-RM1,900.
Kuala Lumpur's premium pricing reflects its position as Malaysia's economic center, with high demand from expatriates, multinational companies, and local professionals. The city's extensive infrastructure, shopping centers, and business districts justify the higher rental costs.
Penang offers more moderate rental rates while maintaining attractive amenities and a strong expat community. The island state's appeal to digital nomads and retirees creates steady demand across different property segments, particularly in George Town and coastal areas.
Johor Bahru presents the most affordable option among major cities, though its proximity to Singapore creates unique dynamics. Many Singaporean workers and investors drive demand for quality properties, particularly in areas near the Causeway and Second Link.
Despite lower absolute rents, Johor Bahru and Penang often deliver superior rental yields ranging from 5.47-6.22% and 3.77-5.74% respectively, compared to Kuala Lumpur's 4.26%.
What's the typical rent for different property types such as condos, landed houses, apartments, and serviced residences?
| Property Type | Typical Monthly Rent Range | Target Tenants |
|---|---|---|
| Condos/Apartments (KL) | RM2,000-RM3,500 | Professionals, Expats |
| Landed Houses (KL) | RM3,000-RM6,000 | Families, Senior Expats |
| Serviced Residences | RM2,400-RM10,000 | Corporate Tenants, Short-term |
| Studio Apartments | RM1,200-RM1,600 | Young Professionals, Students |
| Penang Apartments | RM1,400-RM2,000 | Locals, Expats, Digital Nomads |
| JB Landed Houses | RM3,500-RM5,500 | Singaporean Commuters, Families |
| Luxury Serviced Residences | RM10,000+ | Corporate Executives, Diplomats |
How does rental pricing vary by size, like studios, two-bedroom units, or larger family homes?
Studios in Kuala Lumpur typically rent for RM1,200-RM1,600 monthly, while similar units in Johor Bahru and Penang command RM1,000-RM1,300.
Two-bedroom units across major cities range from RM1,600-RM2,500 monthly, with Kuala Lumpur at the higher end and secondary cities offering more value. These units represent the sweet spot for many tenants, balancing space and affordability.
Three-bedroom apartments command RM2,200-RM3,500 monthly across major cities, with significant premiums for prime locations and modern amenities. These properties attract families and professionals requiring additional space for home offices.
Larger family homes and terraced houses in premium areas of Kuala Lumpur and Johor Bahru can command RM3,000-RM6,000 monthly. These properties often feature multiple bedrooms, gardens, and parking spaces that appeal to expatriate families and affluent locals.
The size-to-rent ratio generally favors larger units in terms of per-square-foot value, making family homes relatively more affordable for space-conscious tenants.
What is the total cost to a landlord, including management fees, maintenance, property taxes, and other charges?
Landlords face several ongoing expenses that significantly impact net rental income beyond the gross rent collected.
Management and agent fees typically cost 1-2 months of rent annually, representing 8-17% of gross rental income. Professional property management becomes essential for landlords managing multiple properties or those living overseas.
Annual maintenance costs range from RM1,000-RM3,000 for condominiums and higher for landed houses, covering repairs, upkeep, and emergency fixes. Older properties generally require more substantial maintenance budgets.
Property taxes include quit rent (approximately RM50 annually) and assessment tax (around RM500 annually), plus potential service charges for condominium units. Stamp duty on rental agreements costs RM1-RM7 per RM250 rental unit annually.
Vacancy losses vary by location and property type, with prime areas experiencing lower vacancy rates. Landlords should budget for 1-3 months of vacancy annually in most markets.
How does financing or mortgage repayment typically compare to rental income for property investors?
A typical RM500,000 condominium in Kuala Lumpur requires monthly mortgage payments of approximately RM2,130 for a 35-year loan at 4.5% interest.
With average Kuala Lumpur rents at RM2,847 monthly, investors achieve a gross margin of roughly 34% before expenses. However, after accounting for management fees, maintenance, taxes, and vacancy periods, net cash flow becomes modest.
Most property investors rely on a combination of rental yield and capital appreciation rather than significant monthly cash flow. The rental income typically covers 60-80% of total property ownership costs in prime locations.
Secondary cities like Johor Bahru and Penang often provide better cash flow potential due to lower purchase prices relative to rental income. Properties in these markets may achieve positive monthly cash flow more readily.
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What's the difference in returns between renting short term (like Airbnb) and long term to tenants?
Long-term rental yields in Malaysia average 5.1% nationally, with Kuala Lumpur slightly lower at 4.26% as of September 2025.
Airbnb and short-term rentals can generate higher gross revenue, with typical monthly earnings of RM3,068 in Penang and RM3,700-RM4,500 in Kuala Lumpur. However, occupancy rates typically range from 27-46% annually, creating income volatility.
Short-term rentals require significantly more management, including guest communication, cleaning, maintenance, and marketing. These operational costs can consume 20-40% of gross revenue, reducing net returns.
Tourist-heavy areas like Penang's George Town and Kuala Lumpur's city center show strong short-term rental potential, particularly for well-located and well-furnished units. Properties near major attractions, business districts, or transportation hubs perform best.
Regulatory risks affect short-term rentals, with local authorities implementing various restrictions and licensing requirements. Long-term rentals provide more stable, predictable income with lower management requirements.
What are some concrete examples of monthly rental prices for each property type in key areas?
In Kuala Lumpur's city center, a two-bedroom condominium typically rents for RM2,000-RM2,800 monthly, while similar units in KLCC or Mont Kiara command premium rates of RM3,000-RM4,000.
Landed terraced houses in established Kuala Lumpur neighborhoods like Bangsar, Damansara, or Petaling Jaya rent for RM4,000-RM6,000 monthly, depending on size and condition.
Penang apartments in George Town or Tanjung Bungah typically rent for RM1,400-RM2,000 monthly for two-bedroom units, while beachfront condominiums can command RM2,500-RM3,500.
Johor Bahru suburban condominiums rent for RM1,800-RM2,200 monthly for three-bedroom units, while landed houses in areas like Desa Tebrau or Austin Heights command RM3,500-RM5,500.
Serviced residences in prime Kuala Lumpur locations range from RM2,500 for basic units to over RM10,000 for luxury penthouses with full amenities and services.
What kinds of tenants are most common—expats, locals, students, or families—and how does that affect demand?
Kuala Lumpur attracts diverse tenant demographics, with expatriates dominating city center luxury condominiums and serviced residences, while local professionals and families prefer apartments and landed houses in suburban areas.
Students create consistent demand near universities, particularly around University of Malaya, Taylor's University, and Sunway University, driving demand for affordable apartments and shared accommodations.
Penang's tenant base includes locals, expatriates, students, digital nomads, and retirees, creating demand across various property types and price ranges. The island's lifestyle appeal attracts long-term international residents.
Johor Bahru experiences significant demand from Singaporean expatriates and commuters who benefit from favorable exchange rates and proximity to Singapore. This demographic typically seeks quality landed houses and modern condominiums.
Family tenants generally prefer landed houses with gardens and parking, while young professionals favor condominiums with amenities like gyms, pools, and security systems in urban locations.
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.
What are the current vacancy rates by area and property type?
Kuala Lumpur city center shows a 10.4% vacancy rate as of the first quarter of 2025, reflecting strong demand in prime locations despite higher rental costs.
Suburban Kuala Lumpur areas experience higher vacancy rates at 17.6%, indicating oversupply in certain developments and more price-sensitive tenant behavior outside central locations.
Serviced apartments show variable vacancy rates depending on their target market, with short-term and Airbnb-oriented units experiencing different occupancy patterns. Johor Bahru short-term rentals typically achieve 46% occupancy annually.
Terraced houses generally maintain low vacancy rates in high-demand areas, particularly those near good schools, transportation links, and established neighborhoods with strong rental history.
Premium properties in desirable locations consistently outperform the market average, while older buildings and those in less accessible areas face higher vacancy challenges and longer marketing periods.
What are the average rental yields today, and how do they compare with one year ago and five years ago?
Current national average rental yield stands at 5.10% as of September 2025, representing a recovery from 2020 lows and stabilization from 2024's peak of 5.24%.
Kuala Lumpur yields have stabilized at 4.26%, below the national average but consistent with major regional capitals. Five years ago in 2020, national yields averaged approximately 4.2%, indicating overall market improvement.
Secondary cities now outperform Kuala Lumpur on yield metrics, with Johor Bahru achieving 5.47-6.22% and Penang delivering 3.77-5.74%, reflecting their better price-to-rent ratios.
The upward trend from 2020 reflects increased rental demand, moderate property price growth, and improved economic conditions following pandemic recovery. Market fundamentals support continued yield stability.
It's something we develop in our Malaysia property pack.
How are rents and yields expected to change over the next one year, five years, and ten years, and how do Malaysian cities compare with similar big cities in the region?
Over the next 1-2 years, moderate rent increases of 2-5% annually are expected, particularly in prime areas near infrastructure projects and business districts.
Five-year projections suggest 10-25% rent growth in major urban centers including Kuala Lumpur, Penang, and Johor Bahru, barring significant macroeconomic disruptions. Supply constraints and continued economic development should support rental growth.
Ten-year outlook indicates Malaysian returns may moderate compared to Southeast Asian peers as regional competition intensifies and regulatory changes evolve. Infrastructure development and economic diversification will influence long-term performance.
Regional comparison shows Kuala Lumpur's 4-4.5% yields trailing Bangkok and Jakarta, which typically achieve 5-7%. However, Penang and Johor Bahru yields align more closely with top regional averages.
Malaysian cities offer stability and lower volatility compared to some regional markets, appealing to conservative investors seeking steady returns rather than aggressive growth.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Malaysia's rental market demonstrates robust fundamentals with nationwide rents reaching five-year highs and healthy yields across different property segments.
Investors should consider location-specific dynamics, tenant demographics, and total ownership costs when evaluating rental property opportunities in Malaysia's diverse markets.
Sources
- Fincrew - Average Salary and Cost of Living in Kuala Lumpur
- Kopi and Property - Malaysia's Rental Market Hits Five-Year High
- BambooRoutes - Malaysia Property Market Outlook
- Global Property Guide - Malaysia Price History
- Numbeo - Cost of Living in Penang
- Numbeo - Cost of Living in Johor Bahru
- IQI Global - Johor Property Price
- Global Property Guide - Malaysia Rental Yields
- Airbtics - Annual Airbnb Revenue in Penang Malaysia
- JLL - Kuala Lumpur Shows Strong Performance Q1 2025