Buying a property in Kuala Lumpur: a complete guide

All sources have been thoroughly verified for credibility. Furthermore, a local real estate expert has reviewed and approved the final article.

Yes, the analysis of Kuala Lumpur's property market is included in our pack

Have you ever thought of buying a nice property in Kuala Lumpur? You're not alone!

Many people are captivated by Kuala Lumpur's modern skyline and dream of owning a stylish apartment or a luxurious penthouse there.

Would it be a good investment, though? Are property prices increasing in Kuala Lumpur? What is the price per sqm? Is it wiser to buy property in Bukit Bintang or Mont Kiara? And the taxes? Which places offer rental yields exceeding 7%?

We've got it all sorted. No worries.

The BambooRoutes team knows this market inside and out. As a matter of fact, we've put all our findings together in a pack. Get it now.

In the lines below, we'll share useful information and some practical tips.

How's the real estate market in Kuala Lumpur?

Is the property market going up or down? Opinions vary. As for us, we don’t listen to rumors. We use up-to-date data and statistics, to ensure our conclusions are well-founded.

Property types

In Kuala Lumpur, you can find various types of properties for sale, including apartments or condos, houses, townhouses, and commercial properties like offices or shops.

Apartments and condos offer modern living with amenities, while houses provide more space and often come in different sizes. Townhouses blend the benefits of both apartments and houses.

Commercial properties are available for those seeking to invest in businesses or office spaces.

The city offers a diverse range of property options to cater to different preferences and needs.

Buy or rent?

(If you're buying for yourself and not to rent out)

Whether you're already living in Kuala Lumpur or considering it for your future, you might be pondering the buy vs. rent decision in this vibrant Malaysian capital.

Obviously, it's better to buy if you are looking for a long-term investment in Kuala Lumpur as property prices tend to appreciate over time.

Our advice? Use the property price-to-rent ratio as your decision-making compass. This metric tells us how many years of rental income it would take to pay for a property at its current price.

According to Numbeo, the property price-to-rent ratio in Kuala Lumpur is around 22.9, which is around the world average.

This value shows that it would take you 23 long years of paying rents before you can own a property in Kuala Lumpur. Renting for such an extended period means you wouldn't be building any equity, and you might end up spending more money without gaining ownership of the property.

Property prices in Kuala Lumpur

On average, according to the last data from Central Bank Of Malaysia, buying a property in Kuala Lumpur would cost you around $2,430 per square meter.

Naturally, prices are quite spread out. The value of a square meter for a condo in KLCC might differ from a house in Bangsar. You'll get a more detailed in our pack for buying property in Kuala Lumpur and in Malaysia.

To help you understand better, it means that, instead of buying an apartment in Singapore, you can get 6 properties in Kuala Lumpur.

Also, housing prices in Kuala Lumpur are 57% cheaper than in Bangkok.

The most expensive neighbourhoods in Kuala Lumpur are probably Bangsar, Damansara Heights, and Mont Kiara, while the cheapest areas are likely Cheras, Setapak, and Segambut.

Trends

First and foremost, it's essential to acknowledge that Malaysia is currently a trustworthy and stable option for investors. The last Fragile State Index that has been reported for this place is 56.4.

It is something to have in mind when wondering whether it's a good investment to buy a property in Kuala Lumpur.

If we look at the IMF’s forecasts, we can see that Malaysia's economy is expected to soar by 20% in the coming 5 years, resulting in an average GDP growth rate of 4%.

If you want to invest in real estate in Kuala Lumpur it's a good thing because a growing economy means improved infrastructure development, such as better transportation networks and urban amenities, making locations more desirable and driving up property values.

Also, in Malaysia, the average GDP per capita has changed by 5.5% over the last 5 years. It's a good number.

These are positive signals showing that property prices in Kuala Lumpur might increase in 2024 and during the coming years.

Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in Malaysia right now.

Buying property in Kuala Lumpur

Buying real estate in Kuala Lumpur can be difficult due to the lack of reliable and updated information available. That's why we have created the pack to buy property in Kuala Lumpur and in Malaysia.

Buying process

In our pack, we've explained the entire process of buying properties in a detailed way. We've pointed out the mistakes to steer clear of, shared tips for finding properties that give you the best returns, and provided information about taxes and necessary documents.

Now, we're giving you a simplified version of the buying process.

This is the step-by-step process to purchase a property in Kuala Lumpur:

1. Research the property market and set a budget for your property purchase in Kuala Lumpur.
2. Engage a licensed real estate agent who understands the local market and can provide guidance.
3. Shortlist properties that meet your criteria and comply with local regulations.
4. Conduct property viewings and inspections to assess the condition and location of the property.
5. Obtain a copy of the Sales and Purchase Agreement (SPA) from the seller or developer.
6. Engage a qualified lawyer in Kuala Lumpur to review the SPA and handle all legal matters.
7. Arrange for a property valuation from a registered valuer to assess its fair market value.
8. Secure financing from a Malaysian bank or financial institution if needed.
9. Pay the booking fee to reserve the property, usually around 2-3% of the property price.
10. Sign the SPA and pay the initial down payment, typically 10% of the property price.
11. Fulfill all terms and conditions of the SPA, including obtaining necessary approvals from local authorities.
12. Complete the property transfer process, settle all payments, and obtain the keys to your new property in Kuala Lumpur.

Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in Malaysia.

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Where to find a property

Explore these websites to find properties in Kuala Lumpur.

• PropertyGuru - Malaysia's leading property site with thousands of properties for sale and rent, detailed information, maps, and photos.
• iProperty - Leading property platform with extensive listings for buying, renting, new launches, commercial properties, property tools, guides, and insights.
• EdgeProp - Malaysia's leading property website providing comprehensive listings, news, resources, and tools for buying, renting, and investing in properties.
• Property Queen - Property platform in Malaysia that provides listings of residential and commercial properties for sale and rent.
• Dot Property - Dot Property is a real estate website in Malaysia that allows users to search for properties to buy or rent.

Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in Malaysia.

What you can get

As mentioned before, the average price per sqm in Kuala Lumpur is $2,430. A 1-bedroom property with 60 square meters of space would cost approximately $146,000, whereas a 2-bedroom with 85 square meters of space would cost approximately $207,000.

However, the amount you pay for a property can be different based on its characteristics and where it's found.

Housing prices in the top areas of Kuala Lumpur are usually at a premium. An apartment in Bangsar might be priced at around $280,000, while a property in Mont Kiara could cost you $260,000.

However, some places are cheaper. You could find a house in Cheras for $190,000, or you may locate a house in Ampang priced at only $150,000.

Find a more detailed breakdown in our full pack for buying property in Malaysia.

Risks and pitfalls

Here are the main pitfalls when buying a property in Kuala Lumpur, Malaysia:

• Non-citizen restrictions on property types or locations.
• Ignoring the Bumiputera quota for certain properties.
• Overlooking the Goods and Services Tax (GST) implications.
• Purchasing on land with leasehold tenure without understanding the implications.
• Not considering the impact of haze and air pollution on property value.
• Overlooking potential flood-prone areas during the rainy season.
• Ignoring potential currency fluctuations when financing the property.
• Failing to factor in potential changes in government policies affecting foreign property ownership.

We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.

Everything you need to know is included in our Malaysia Property Pack

Living in Kuala Lumpur

Living in Kuala Lumpur is a great experience - it is a vibrant city with a great balance of modern amenities, cultural attractions, and natural beauty.

Cost of living

The cost of living in Kuala Lumpur is generally considered to be quite reasonable, with prices for basic necessities such as food and accommodation being lower than in many other major cities in the region. However, the cost of living in Kuala Lumpur can vary significantly depending on where you choose to live and the lifestyle you lead.

Here are some examples to better understand the cost of living in Kuala Lumpur:

• Rent for a one-bedroom apartment in Bukit Bintang area: $900/month.
• Monthly public transportation pass (MyRapid): $40.
• "Nasi lemak" breakfast for two at a local stall: $5.
• "Tiger" beer at a bar: $4.
• Groceries at Tesco or Giant supermarket: $70/week for a family of four.
• Basic utilities for an 85m² apartment with Tenaga Nasional: $90/month.
• Ticket to a live concert at KL Live: $35.
• "Teh O Ais Limau" at a mamak restaurant: $2.

Neighbourhoods and spots

Since our intention is to present information in a clear and reader-friendly way, we've created a summary table outlining the different neighborhoods in Kuala Lumpur. For yields, prices and rents, check our property pack.

Life in Kuala Lumpur

Kuala Lumpur's economy is largely driven by the service sector, which accounts for around 60% of the city's GDP. It is also a major financial center and has seen significant growth in sectors such as tourism, real estate, and manufacturing.

Based on the IMF's data, Kuala Lumpur's GDP contributes to almost 14% of Malaysia's GDP. It's nice because people in cities with strong economies usually get better services, which makes life better.

What expats usually like the most in Kuala Lumpur is the vibrant nightlife and the diverse range of food options. From street food to upscale restaurants, there is something for everyone to enjoy.

However, the crime rate index of Kuala Lumpur remains high (63, whick ranks in the top 100 in the world). The most common crimes in Kuala Lumpur are theft, burglary, and drug-related offenses.

A good point for a property investor - Kuala Lumpur has an extensive mass rapid transit system consisting of light rail, monorail, and metro lines.

Access to healthcare in Kuala Lumpur is very good, with a Healthcare Index of 68. A good healthcare system will always benefit the real estate market of a place.

Finally, it is worth noting that the University of Malaya ranks among the top 400 universities in the world.

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Renting out in Kuala Lumpur

If your intention is to buy a property not for personal use, but to rent it out and create income, then this section is for you.

Long-term

Tenant Profiles in Kuala Lumpur

According to the data reported by Wikipedia, the home ownership rate in Malaysia is 77%, which is average.

It means that, if you decide to buy and rent out in Kuala Lumpur, there will be a good number of people who can become your potential tenants.

If you decide to buy and rent out to long-term tenants, you should target expatriates, young professionals, couples, and families who are looking for a convenient and affordable place to live in Kuala Lumpur. On the other hand, if you're looking to rent out to short-term tenants, you should target business travelers, digital nomads, and tourists who are looking for a comfortable and convenient place to stay while in Kuala Lumpur.

Here is a little summary table we've made for you.

Rental yields

Nowadays, rental yields in Kuala Lumpur are usually below 5%. It's not much. A good rental yield is usually around 7% or higher. Maybe, you knew it already.

Properties located in the city centre of Kuala Lumpur tend to have the highest rental yields, as they are most sought after by tenants due to their close proximity to amenities and public transport links. Additionally, properties located in more affordable areas on the outskirts of the city also tend to have high rental yields due to the high demand for rental accommodation in these areas.

For further explanation and a more detailed breakdown, you can check the reports and analyses we have made.

Finally, be aware that rental incomes in Kuala Lumpur are taxed at 30%, which is relatively high.

Short-term

You could also decide to rent short-term to business travelers, visitors, or expats living in Kuala Lumpur. Additionally, tourists and students studying in the city could be potential tenants for short-term rental in Kuala Lumpur.

If you decide to go with that option, look for properties in the Bukit Bintang, KLCC and Ampang areas of Kuala Lumpur, as these are the most popular locations for short-term tenants. Additionally, look for properties in the Golden Triangle, Bangsar and Mont Kiara neighbourhoods for higher rental yields.

You will have some competition though - there are around 15,000 Airbnb listings in Kuala Lumpur. The average daily rate stands around $58.

You have the opportunity to generate a nice additional income stream then. According to online testimonials and analytics platform like AirDNA, Guesty and Inside Airbnb, people who offer short-term rentals in Kuala Lumpur can make around $600 per month. Also, the average occupancy rate is estimated at 52%.

Is it worth buying real estate in Kuala Lumpur then?

Buying a property in Kuala Lumpur can be a smart move if you're looking for long-term stability and an investment opportunity. Property prices in the city have a history of appreciating, and if you plan to stay in Kuala Lumpur for an extended period, owning a property can help you build equity instead of paying rent over many years.

The property price-to-rent ratio in Kuala Lumpur is also favorable, making buying more financially advantageous in the long run. Moreover, the positive economic outlook, with expected GDP growth and improving infrastructure, can contribute to property value appreciation. A growing economy often leads to increased demand for housing, potentially resulting in higher property prices.

Additionally, if you're interested in generating rental income, Kuala Lumpur offers opportunities to invest in properties that can provide steady cash flow, especially in areas with high rental demand.

However, buying a property might not be the best choice if you plan to stay in Kuala Lumpur for a short period. Property transactions involve various costs, including legal fees and taxes, which can erode potential gains over a short period.

If you're financially constrained or uncertain about your long-term plans or income stability, renting might be a more flexible option. Also, be mindful of non-citizen restrictions on property ownership and consider the tax implications of property ownership and rental income.

If you're thinking about short-term rental options, be prepared for competition in the market, as there are numerous Airbnb listings in Kuala Lumpur.

Make sure you understand the real estate market in Kuala Lumpur

Don't rush into buying the wrong property in Malaysia. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.

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The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.