Authored by the expert who managed and guided the team behind the Malaysia Property Pack
Yes, the analysis of Kuala Lumpur's property market is included in our pack
What will happen in Kuala Lumpur’s real estate market? Will prices go up or down? Is the city still a hotspot for foreign investors? How is Malaysia’s government impacting real estate policies and taxes in 2025?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with developers, real estate agents, and clients who buy properties in Kuala Lumpur, we’ve gained firsthand insights.
That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market predictions and forecasts.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
1) More foreign investors will focus on city center properties for investment purposes
Foreign buyers are eyeing properties in Kuala Lumpur's city center for investment.
One reason is the rising property prices in the area, which signal a strong market. For instance, the price per square foot for two-storey terraced houses in Kuala Lumpur hit RM622.87 in early 2024, up from RM578.51 in 2019. This upward trend suggests that investing in city center properties could be quite profitable over time.
Another factor is the favorable exchange rates, making Malaysian properties more appealing to foreign investors. In 2024, the exchange rate was US$1 to RM4.11, giving foreign buyers more bang for their buck. This financial edge is a big draw for those looking to invest in the city center.
The demand for luxury and high-end properties is also on the rise, especially among Chinese nationals. This interest is fueled by investment opportunities and the presence of international businesses and expatriates, making Kuala Lumpur's city center even more attractive.
With these factors in play, it's no wonder that foreign buyers are increasingly targeting city center properties for investment. The combination of rising prices, favorable exchange rates, and growing demand for luxury homes creates a compelling case for investing in Kuala Lumpur's city center.
Sources: MIDA, The Edge Malaysia, The Straits Times
2) Property prices in Setapak will fall because of too much supply and not enough demand
Setapak is currently experiencing an oversupply of new property developments.
In 2023, developers launched 12 new high-rise projects in Setapak, with prices ranging from RM500 to RM700 per square foot. This influx has led to a significant increase in available units, creating a situation where supply far exceeds demand.
Real estate agencies are voicing concerns about this oversupply, not just in Setapak but across Kuala Lumpur. It's reminiscent of the office sector's past struggles, where too much supply and not enough demand caused occupancy rates to drop. This imbalance is now putting downward pressure on property prices in Setapak.
Adding to the challenge, consumer interest in Setapak properties is waning. In 2023, buyers showed a preference for more expensive properties, leaving lower-tier options like those in Setapak less attractive. This shift in buyer interest is worsening the oversupply issue.
For potential buyers, this means that Setapak's property market might not be the best investment right now. The combination of high supply and low demand suggests that prices could continue to fall.
Understanding these dynamics is crucial for anyone considering a property purchase in the area. The current market conditions in Setapak are a clear example of how market forces can impact property values.
Sources: EdgeProp, Henry Butcher
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.
3) City center prices will rise as urbanization boosts demand for high-rise living
Property prices in Kuala Lumpur's city center are on the rise, and it's catching everyone's attention.
Since 2022, there's been a noticeable shift towards high-rise living, with transaction volumes for upscale high-rise homes jumping by 35%. This isn't just a trend; it's a clear sign that people are leaning towards this lifestyle.
Urbanization is playing a big role here. As Kuala Lumpur expands, more people are flocking to the city, drawn by its prime location and modern amenities. This influx naturally boosts the demand for homes, especially in the bustling city center where everything is within reach.
Land scarcity in the city center is another piece of the puzzle. With limited space for new projects, existing properties are becoming more valuable. This scarcity, coupled with a steady stream of expatriates and foreign investors, is driving prices up even further.
Government initiatives like the MM2H program are also making waves. By easing the process for foreigners to invest in real estate, the demand for city center properties is getting a significant boost.
With all these factors in play, it's no wonder that property prices in Kuala Lumpur's city center are expected to keep climbing as urbanization and the desire for high-rise living continue to grow.
Sources: Savills Asia, Juwai Asia, Real Estate Asia
4) Affordable housing prices will stay steady as government programs help first-time buyers
The Malaysian government is actively working to keep affordable housing prices stable for first-time buyers.
One major move is the Budget 2025 allocation of RM900 million for new housing projects like Residensi Rakyat and Rumah Mesra Rakyat. These initiatives aim to provide more housing options, potentially benefiting around 17,500 residents by the end of 2025. This is a big deal for those looking to settle down in Malaysia.
Another key effort is the Housing Credit Guarantee Scheme (SJKP), which has RM10 billion set aside to help up to 20,000 first-time homebuyers. This scheme is particularly helpful for people with lower or irregular incomes, as it reduces financial risks and makes it easier to get loans. By making financing more accessible, the government is ensuring more people can enter the housing market, which helps keep prices steady.
The Home Ownership Campaign 2.0 is also in play, offering stamp duty exemptions for homes valued up to RM500,000. This, along with the construction of more social housing and units priced below RM300,000, is expected to stabilize the market by increasing the supply of affordable homes.
These government initiatives are not just about numbers; they are about making homeownership a reality for more Malaysians. By focusing on affordability and accessibility, the government is working to ensure that the dream of owning a home is within reach for many.
Sources: Bernama, Property Genie, The Sun
5) Demand for affordable housing will rise as the middle class grows
The growing middle class in Kuala Lumpur is set to boost demand for affordable housing options.
With rising income levels, nearly 98.8% of Kuala Lumpur's population will earn as much as the top 40% of global earners by 2024. This means more people can afford homes, but they still want options that fit their budgets.
Urbanization is on the rise, with 78.72% of Malaysians living in urban areas by 2023. Kuala Lumpur, as the largest city, is at the heart of this shift. More people moving to cities means more demand for housing, especially affordable options for middle-class families.
In Kuala Lumpur, 35.4% of consumers are high-class, highlighting a significant middle-income group. This demographic is keen on affordable housing that balances quality and cost.
As the middle class grows, they are looking for homes that offer value without breaking the bank. This trend is shaping the housing market, making affordable options more crucial than ever.
Developers are taking note, focusing on creating homes that meet the needs of this expanding middle class. The demand for affordable housing is not just a trend; it's becoming a necessity in Kuala Lumpur's evolving landscape.
Sources: Statista, Statista, ULI Asia Pacific Home Attainability Index Report
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6) Luxury property prices will continue to rise as affluent buyers drive demand and supply remains limited
Luxury property prices in Kuala Lumpur are on the rise and here's why.
Malaysia is seeing a boom in wealthy individuals, with a projected 34.6% increase in ultra-high-net-worth individuals from 2023 to 2028. This means more people with deep pockets are eyeing luxury homes. The city is becoming a hotspot for affluent buyers, especially those looking for high-end living spaces.
Interest from international buyers is also heating up. In 2024, there was a 42% jump in inquiries from Chinese buyers for properties priced at RM1 million and above. This surge highlights Kuala Lumpur's appeal to foreign investors, particularly from China, who are keen on tapping into the city's luxury market.
On the flip side, getting land for new luxury developments isn't easy. With elevated inflation and potential hikes in the overnight policy rate, expanding the supply of luxury properties is challenging. This scarcity of new developments, paired with high demand, is a recipe for rising prices.
For those considering a purchase, it's crucial to understand that limited supply and high demand are driving these price increases. The market dynamics are such that affluent buyers are willing to pay a premium for the exclusivity and prestige that come with owning a luxury property in Kuala Lumpur.
So, if you're thinking about investing in Kuala Lumpur's luxury real estate, be prepared for a competitive market. The combination of growing wealth and international interest is setting the stage for continued price hikes.
Sources: Real Estate Asia, The Edge Malaysia, Weird Kaya, RP Realty Plus
7) Speculative buying will slow, stabilizing the market due to new property taxes
In 2023, Malaysia introduced a 4.0% stamp duty on property transfers for non-citizens and foreign-owned companies.
This tax aims to stabilize property prices, making it tougher for foreign investors to engage in speculative buying, which often drives up prices and makes homes less affordable for locals. By increasing costs for these investors, the government hopes to benefit local residents by keeping property prices in check.
Looking back, similar tax measures have worked well in curbing speculative buying. For instance, in 2019, increased stamp duties led to fewer property transactions, which helped stabilize the market. This shows that higher taxes can deter those looking for quick profits rather than long-term investments.
In early 2023, there was a slight dip in residential property transactions, hinting at a possible reduction in speculative buying. While Johor saw more transactions, Kuala Lumpur and Selangor experienced declines, indicating a shift in buyer behavior likely influenced by the new tax measures.
These changes suggest that the new taxes are making speculative buying less appealing, especially in major areas like Kuala Lumpur. The government's strategy seems to be working, as buyers are now more cautious and focused on long-term investments.
Sources: Knight Frank Malaysia, Global Property Guide
8) Demand for eco-friendly properties will grow due to government policies promoting green buildings
Government policies are boosting the demand for eco-friendly properties in Malaysia.
In recent years, Malaysia has rolled out initiatives like the Green Technology Master Plan (GTMP) to push green building practices. This plan is all about weaving green tech into developments, aligning with the National Green Technology Policy (NGTP), and focusing on energy, environment, economy, and social aspects. It's a big move to make properties more sustainable and appealing.
By 2023, Kuala Lumpur saw a notable rise in green certified Grade A office spaces, largely because multinational companies are keen on hitting sustainability targets. This shift shows a clear preference for eco-friendly properties, as businesses see the perks of embracing ESG principles, like better efficiency and a stronger reputation.
The Malaysian government is also eyeing net-zero carbon buildings by 2050, a goal tied to the World Green Building Council’s global climate action programme. This ambition is pushing the demand for sustainable urban living even further. Plus, the Energy Efficiency and Conservation Bill 2023 (EECB) is in play, aiming to cut energy use and promote green practices in the building sector.
For those looking to invest in property, these policies mean that eco-friendly buildings are not just a trend but a growing necessity. The push for sustainability is reshaping the real estate landscape, making green properties a smart choice for future-proofing investments.
As the demand for green buildings rises, it's not just about being eco-conscious; it's about staying ahead in a market that's increasingly valuing sustainability. This shift is creating opportunities for investors and developers who are ready to embrace green innovations.
Sources: JLL, Law Partnership, Real Estate Asia
We have made this infographic to give you a quick and clear snapshot of the property market in Malaysia. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
9) Demand for homes with office spaces will grow as remote work becomes more common
In Malaysia, remote work adoption has skyrocketed, especially in fields like software engineering and design.
With more people setting up home offices, sales of home office furniture are booming. The Malaysia Furniture Market is on track to grow significantly, fueled by the demand for modern and functional home office setups.
Homebuyers now prioritize properties with flexible layouts that can easily accommodate a home office. A dedicated workspace is no longer a luxury but a necessity for many.
In Kuala Lumpur, real estate trends show a clear preference for homes with office amenities. This is reflected in the rising occupancy rates and rents for properties that offer these features.
As remote work becomes more common, the demand for homes with office spaces is expected to rise. Buyers are increasingly seeking out properties that can support their work-from-home needs.
Sources: The Edge Malaysia, 6Wresearch, The McLemore Group, The Edge Malaysia
10) Demand for senior-friendly housing will grow as the population ages
In Malaysia, the elderly population is growing rapidly, with projections showing it could reach 14.5% by 2040.
Many public spaces aren't designed for seniors, with issues like steep wheelchair ramps and inaccessible toilets in older buildings. This highlights the need for homes that are more accommodating to the elderly.
Healthcare costs are rising fast, and medical inflation is outpacing general inflation. This makes it essential for seniors to live in homes that support their health, potentially reducing expensive medical treatments.
Older adults often prefer to stay in their communities rather than move to retirement homes. This preference indicates a strong demand for age-appropriate housing that lets them stay in familiar surroundings.
As the population ages, the demand for accessible and senior-friendly housing is expected to increase significantly. This trend is crucial for anyone considering investing in property in Malaysia.
Understanding these needs can help you make informed decisions about property investments, especially as the market for senior-friendly homes continues to grow.
Sources: UNDP Malaysia, The Sun, The Edge Malaysia
11) Interest in landed properties will drop as high-rise living gains popularity
In Kuala Lumpur, high-rise living is on the rise, especially in 2023 and 2024.
In the first half of 2023, 4,494 high-rise units worth RM3.52 billion were sold, showing a strong market shift. The Klang Valley added 17,946 new high-rise units, with many in Kuala Lumpur, highlighting the trend towards urban living.
Young professionals and expatriates are driving this change, as they prefer the convenience and amenities of city life. High-rise apartments are often located near business hubs and entertainment spots, making them a top choice for those seeking a vibrant lifestyle.
Affordability plays a big role too. High-rise units are generally more budget-friendly than landed properties, making them attractive to first-time buyers. This affordability, combined with better rental yields in prime areas, draws in investors looking for good returns.
Living in a high-rise means less time commuting, thanks to easy access to public transport. Government policies also support this trend, promoting urban density and sustainable planning over urban sprawl. This aligns with environmental goals, making high-rise living a smart choice for the future.
Sources: The Edge Malaysia, Property Genie, DWS
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12) Demand for luxury properties in Kuala Lumpur will rise as it becomes a global city
Foreign interest in luxury properties in Kuala Lumpur is booming, driven by several key factors.
In early 2024, there was a 42% jump in inquiries from Chinese buyers, highlighting Kuala Lumpur's appeal. This surge is fueled by the city's attractive investment and education opportunities, making it a hotspot for wealthy Chinese individuals. The city's international schools and amenities are a big draw for families looking to relocate, offering a comfortable lifestyle for expatriates.
Malaysia's economy is also seeing a boost with RM76.1 billion in potential foreign investments recently recorded. The real estate sector is a major beneficiary, showing that foreign investors are increasingly interested in the Malaysian property market. Government policies are generally supportive of foreign investment, although there are some restrictions like the 4% stamp duty for foreign buyers.
International businesses are setting up shop in Kuala Lumpur, attracted by the city's strong economy and political stability. This influx of businesses is driving demand for luxury properties, as executives and employees seek high-end accommodations. The presence of these businesses further cements Kuala Lumpur's status as a global city.
Moreover, Kuala Lumpur's growing reputation as a global city is enhanced by its expanding network of international schools and amenities. These facilities are crucial for expatriate families, making the city an even more attractive destination for foreign buyers. The combination of a stable economy, international business presence, and quality of life offerings makes Kuala Lumpur a prime location for luxury property investment.
Sources: RP Realty Plus, Juwai Asia, JLL Research
13) Property values in Cheras will rise as new public transport links boost accessibility
Cheras is becoming a hot spot for property buyers thanks to new public transportation links.
With the introduction of the Sungai Buloh-Kajang MRT line and highways like the SUKE, Cheras has become much more accessible, leading to a noticeable increase in property transactions. This boost in demand is a clear sign that people are eager to invest in areas with better connectivity.
Looking back, areas in Kuala Lumpur that improved their transportation links, like Mont Kiara and Sri Hartamas, experienced significant jumps in property values. These neighborhoods became more attractive to buyers once public transport made commuting easier.
Government reports have highlighted ongoing infrastructure projects, including MRT expansions, that are specifically aimed at enhancing connectivity in Cheras. This is part of a larger strategy to boost property values in areas that benefit from these improvements.
As these projects continue, property values in Cheras are expected to rise, making it a promising area for potential buyers. The increased accessibility is not just a convenience; it's a game-changer for the local real estate market.
For those considering buying property, now might be the perfect time to invest in Cheras before prices climb even higher. The area's transformation is already underway, and the benefits of improved transport links are becoming increasingly evident.
Sources: The Edge Malaysia, The Star
14) Virtual reality tours will transform property viewings, allowing buyers to explore homes remotely more easily
Virtual reality tours are changing how we view properties, making it easier to explore homes from anywhere.
By 2025, the value of VR in real estate is expected to hit $2.6 billion, up from $800 million in 2020. This shows how quickly the industry is embracing this tech. In 2023, VR tours grabbed a 43.9% market share, proving their popularity. Most buyers, about 77%, now prefer to check out homes using VR, highlighting a shift towards remote viewing.
It's not just about convenience; 67% of buyers want listings with virtual tours. This demand is reshaping real estate marketing. Thanks to advancements in VR, these tours are more immersive and affordable, with AI making them even better. Buyers love the personalized search tips and detailed property info that come with these tours.
Homes with VR tours can sell for up to 7.25% more. This is because buyers can really picture themselves living there, which boosts their confidence in making a purchase. The combination of AI and VR is enhancing the home-buying process, offering a richer experience.
Virtual reality is not just a trend; it's becoming a staple in real estate. As technology continues to improve, more buyers will likely turn to VR for their home searches. This shift is making the process more efficient and enjoyable for everyone involved.
Sources: EZ Real Estate Tools, Market.us, Numalis
We made this infographic to show you how property prices in Malaysia compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
15) Property values will rise in underserved areas as new MRT lines are introduced
New MRT lines in Kuala Lumpur are boosting property values in areas that were previously less accessible.
Take the MRT Sungai Buloh-Kajang Line and MRT2 Putrajaya Line, for example. These lines have expanded the city's rail network, making it easier for people to reach different parts of the city. As a result, properties near these lines have seen their values go up. Subang Jaya, for instance, experienced a 10% to 20% increase in rental rates after the LRT Kelana Jaya line was introduced.
This isn't just happening in Kuala Lumpur. Cities like Singapore and Hong Kong have also seen property values rise with the addition of new transit lines. It's a trend that shows how important public transport is to property markets. The Malaysian Institute of Estate Agents even pointed out that being close to public transport is a major selling point for both buyers and renters.
In 2024, Kuala Lumpur saw a noticeable jump in residential transactions, which suggests that more people are looking to buy homes near MRT stations. This growing demand is a clear sign that people value the convenience of living near public transport. It's not just about getting from point A to point B; it's about improving quality of life.
For those considering buying property in the city, it's worth noting that areas near new MRT lines are likely to continue appreciating in value. This is especially true as the city continues to develop and expand its public transport network. Investing in these areas could be a smart move for anyone looking to benefit from future growth.
Sources: The Star, The Edge Malaysia, KL Property
16) Kepong will attract more interest in affordable housing as urban sprawl expands
Kepong is quickly becoming a hotspot for affordable housing as urban sprawl continues.
With property prices soaring in central Kuala Lumpur, many are seeking more budget-friendly options in suburban areas like Kepong. The strategic location and improving infrastructure make Kepong an attractive choice for homebuyers. The completion of the MRT2 line, featuring five stations in Kepong, has significantly boosted accessibility, drawing more interest from potential buyers.
The Malaysian government has been actively promoting development in suburban areas, which has greatly benefited Kepong. Back in 2016, the announcement of the MRT Sungai Buloh-Serdang-Putrajaya Line 2 sparked a property development boom in the area. This strong government support for suburban growth has been a game-changer for Kepong.
Real estate market reports consistently highlight Kepong as an emerging area for property development. Significant investments in infrastructure and amenities, such as new highways and commercial hubs, have enhanced the area's livability, making it even more appealing to potential homeowners.
As urban sprawl continues, Kepong's blend of affordability and accessibility positions it as a prime location for those looking to invest in property. The area's transformation is evident with the influx of new developments and improved public transport options.
Sources: EdgeProp.my, Vodus, UEM Sunrise
17) Tech-savvy buyers will be drawn to new developments featuring standard smart home technology
Smart home technology is quickly becoming a must-have in new properties, especially in bustling cities like Kuala Lumpur.
In 2023, Malaysia had about 1.3 million smart home device users, and this number is set to more than double by 2028. This surge highlights a growing desire for homes equipped with the latest tech. People are increasingly drawn to the convenience and security these features offer.
Globally, consumer spending on smart home systems is projected to surpass $170 billion by 2025, with a big chunk of this growth coming from the Asia-Pacific region, including Malaysia. Buyers are willing to invest more in homes that integrate technology seamlessly into their daily lives.
Young, tech-savvy buyers are leading the charge, showing a strong preference for smart home features. This trend is shaping the real estate market, as developers in Kuala Lumpur are already incorporating these features into new projects to meet demand.
For these buyers, smart homes mean more than just gadgets; they represent a lifestyle of convenience and efficiency. Developers are keen to cater to this demographic, ensuring their projects stand out in a competitive market.
As smart home technology becomes more mainstream, it's clear that tech-savvy buyers are setting the pace for future developments. The integration of these features is not just a trend but a new standard in property development.
Sources: Research and Markets, Exploding Topics, Statista
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18) Properties near parks and green spaces will become more attractive due to green initiatives
In bustling cities like Kuala Lumpur, properties near parks and green spaces are becoming increasingly desirable.
Since 2023, green initiatives have been reshaping urban landscapes, not just by adding more trees but by promoting a sustainable lifestyle. These efforts are making areas around green spaces more appealing. For example, the Tun Razak Exchange (TRX) building, with its platinum GBI rating, is a beacon of green technology. Its energy-efficient design is expected to boost property values in the surrounding area, as people are willing to invest more in homes that promise a healthier lifestyle.
There's a noticeable trend where buyers are increasingly seeking eco-friendly properties. According to JLL, many in the Asia-Pacific region, including Kuala Lumpur, are pushing for their office spaces to be fully green certified by 2030. This shift highlights a growing preference for homes and offices that are not only close to nature but also built with sustainability in mind.
Government initiatives like the National Energy Transition Roadmap (NETR) are also pivotal. This roadmap is designed to cut down greenhouse gas emissions and encourage green urban planning. Such measures are making green spaces more attractive, as they contribute to a cleaner environment, which is a significant draw for potential buyers.
In Kuala Lumpur, the demand for sustainable living spaces is on the rise. People are increasingly drawn to areas that offer a blend of urban convenience and natural beauty. This trend is particularly evident in the growing interest in properties near parks, where the benefits of green initiatives are most tangible.
As these green initiatives continue to evolve, they are expected to further enhance the appeal of properties near parks and green spaces, making them a smart investment choice for those looking to embrace a sustainable lifestyle.
Sources: Real Estate Asia, Ekonomi Malaysia, JLL Malaysia, The Malaysian Reserve
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility.