Should you buy real estate in Malaysia now?

Get all the data you need about the real estate market in Malaysia

Why is buying property in Malaysia worth looking at again now?

Malaysia property is worth another look now because the economy is growing much faster than house prices.

Malaysia's economy grew 5.2% in 2025, according to the Department of Statistics Malaysia, while construction expanded 12.2%. Bank Negara Malaysia also cut the Overnight Policy Rate from 3.00% to 2.75%, making borrowing slightly cheaper.

Investment has been unusually strong. MIDA recorded RM426.7 billion of approved investment in 2025, the highest annual figure Malaysia has ever reported and 11% above 2024. Another RM92.8 billion was approved in the first quarter of 2026.

At the same time, Malaysian homes have stayed relatively calm. National house prices rose 2.6% in 2025 and only 1.7% year-on-year in the first quarter of 2026.

That gap is what makes the market interesting today. Business investment and economic growth have accelerated, while residential prices have moved much more slowly.

Indicator	Earlier level	Latest reading	What we see
GDP growth	5.1% in 2024	5.2% in 2025	Solid economy
OPR	3.00%	2.75%	Slightly cheaper borrowing
Approved investment	RM384.4bn in 2024	RM426.7bn in 2025	Record investment
House-price growth	—	2.6% in 2025	No national boom
Q1 house-price growth	—	1.7% YoY	Growth has slowed further

Are Malaysian property prices still going up now?

Malaysian property prices are still rising today, but the increase is slow enough that buyers should stop thinking of this as a rising-tide market.

NAPIC's Malaysian House Price Index put the average national home at RM507,533 in the first quarter of 2026, 1.7% higher than a year earlier.

The differences between property types are more useful than the national average. Terraced houses rose 3.3% in 2025, while high-rise homes gained just 0.6%. In the first quarter of 2026, terraced and semi-detached properties were up 2.2% year-on-year, high-rises increased 1.3%, and detached houses fell 0.7%.

So prices are holding up, but buyers cannot count on strong appreciation to fix a mediocre purchase.

These days, the individual property matters much more than the national direction.

Property type	2025 price growth	Q1 2026 YoY	What it looks like now
All homes	2.6%	1.7%	Slow appreciation
Terraced	3.3%	2.2%	Relatively strong
Semi-detached	2.8%	2.2%	Relatively strong
High-rise	0.6%	1.3%	Still weak
Detached	2.4%	-0.7%	Softening

If Malaysian home prices are rising, why are fewer properties selling?

Malaysia's property market has clearly lost transaction momentum even though prices have not fallen much.

NAPIC recorded 416,413 property transactions in 2025, down 1% from 2024. Residential transactions fell 1.5%, from 260,516 to 256,512.

The slowdown became sharper in the first quarter of 2026, when total transaction volume fell 8% year-on-year to 89,966 deals.

Yet total transaction value dropped only about 0.6%, to RM51.09 billion. Across all of 2025, transaction value actually rose 4.1% to RM241.87 billion despite fewer deals.

That suggests buyers are becoming more selective rather than disappearing altogether. Expensive and better-quality properties are still clearing, while weaker stock is taking longer to move.

For investors, the practical risk today is liquidity. A property can keep its asking price while becoming much harder to resell.

Is Malaysia's property oversupply getting serious again?

Malaysia's property oversupply has worsened enough that we would treat it as one of the biggest risks in the market today.

NAPIC recorded 23,149 completed unsold residential units at the end of 2024. By the end of 2025, that had jumped to 30,471, an increase of 31.6%.

The number climbed again to 32,801 in the first quarter of 2026. Compared with the same quarter a year earlier, the increase was close to 40%.

Serviced apartments add another layer. Malaysia had 19,263 completed unsold serviced apartments in the first quarter of 2026, worth RM16.52 billion.

Combined with ordinary residential overhang, more than 52,000 completed units were sitting unsold, with a total value close to RM33 billion.

Some of these properties will eventually sell at good prices. Others are unsold because developers built too much supply in locations where actual occupier demand is weaker than the marketing suggested.

That gives buyers negotiating power, but it also gives us a very clear warning about which projects deserve extra scrutiny.

Completed unsold property	Units	Value	Change
Residential, end-2024	23,149	RM13.94bn	—
Residential, end-2025	30,471	RM17.73bn	+31.6% units
Residential, Q1 2026	32,801	RM16.37bn	+7.6% QoQ
Serviced apartments, Q1 2026	19,263	RM16.52bn	—
Combined Q1 2026	52,064	RM32.89bn	Very large stock

Is Malaysian property actually cheap for local buyers?

Malaysia property still looks inexpensive beside Singapore or Hong Kong, but local affordability is much less impressive.

The average Malaysian home cost roughly RM507,500 in the first quarter of 2026. The latest Department of Statistics household survey puts median household income at RM7,017 per month, or about RM84,200 a year.

That puts the average Malaysian house at roughly six times annual median household income.

The state differences are meaningful. Johor's average home price was around RM473,000 in 2025 against median household income of RM7,712 a month. Selangor's average price was about RM568,000, but median household income exceeded RM10,700 a month.

Kuala Lumpur remains considerably more expensive. Average housing values are above RM800,000, even though household incomes are also higher.

These ratios are rough because the median household does not necessarily buy the average home. Still, they make one point quite clearly: Malaysia is no longer uniformly cheap for Malaysians.

Market	Approx. average house price	Median monthly household income	Price / annual income
Malaysia	RM507,533	RM7,017	~6.0x
Kuala Lumpur	~RM827,000	RM10,805	~6.4x
Selangor	~RM568,000	RM10,726	~4.4x
Johor	~RM473,000	RM7,712	~5.1x
Penang	~RM498,000	RM7,386	~5.6x

Are rental yields in Malaysia good enough to justify buying now?

Malaysian rental yields are decent now, but many ordinary condos stop looking attractive once we include financing and ownership costs.

Global Property Guide's early-2026 data put Malaysia's average gross residential yield at about 5.27%, slightly above the previous reading of 5.19%.

Johor Bahru averaged roughly 5.3%, while Iskandar Puteri was close to 5.8%. Kuala Lumpur came in around 4.9%. George Town was much lower at roughly 3.7%.

Gross yield can be deceptive. Maintenance charges, repairs, vacancy, agent commissions, insurance and local charges can easily remove one to two percentage points. A property advertised at a 5% gross yield may therefore end up producing only around 3%–4% net.

Financing narrows the return further. Bank Negara's reduction of the OPR from 3.00% to 2.75% helps borrowers, but a 25-basis-point cut does not transform a weak rental deal into a good one.

We currently find Johor and selected Klang Valley submarkets more interesting for income than expensive central Kuala Lumpur or prime Penang locations.

Market	Approx. gross yield	How it looks today	Main weakness
Malaysia	5.27%	Reasonable	Net yield is much lower
Iskandar Puteri	5.78%	Attractive selectively	Supply risk
Johor Bahru	5.31%	Attractive selectively	Condo competition
Kuala Lumpur	4.86%	Average	Higher entry prices
George Town	3.74%	Weak for income	Expensive relative to rent

Is Kuala Lumpur still a good place to buy property?

Kuala Lumpur is still worth buying in today, but only where the tenant demand is obvious and the price makes sense.

The average Kuala Lumpur home was worth roughly RM827,000 in the first quarter of 2026, around 1.7% more than a year earlier. Prices are moving, but slowly.

Kuala Lumpur still has Malaysia's deepest white-collar employment market, the largest concentration of corporate headquarters, mature rail infrastructure, universities, international schools and a broad tenant pool.

The city also continues to attract business investment. MIDA recorded RM16.9 billion of approved investment in Kuala Lumpur during the first quarter of 2026.

The problem is yield. Global Property Guide's latest data put the city average at roughly 4.9% gross, while some expensive KLCC apartments produce only around 2%–4%.

That makes us much more interested in buildings around established employment centres, universities and MRT or LRT stations than in prestige towers sold mainly on views, branding and foreign-buyer marketing.

Kuala Lumpur can still work very well, but the easy version of the KL condo trade is gone.

Is Johor the best place to buy property in Malaysia right now?

Johor currently has the strongest mix of growth, infrastructure and cross-border demand in Malaysia, although buyers are already paying more for that story.

Johor's economy grew 8.0% in 2025, faster than every other Malaysian state. MIDA recorded RM110 billion of approved investment there during the same year, the highest figure in the country.

The Johor-Singapore Special Economic Zone adds another long-term driver, while data-centre and industrial investment continues to pull capital into the state.

Then there is the RTS Link. The railway between Bukit Chagar and Woodlands North is approaching operation, with planned peak capacity of 10,000 passengers per hour in each direction and a rail journey of roughly five minutes.

Johor house prices have already reacted. NAPIC put the state's average home price near RM473,000 in 2025, up 6.9%, compared with 2.6% nationally.

So Johor looks stronger than most Malaysian markets today, but the obvious catalysts are no longer secret. Buyers still need to distinguish genuine rental demand from developments simply carrying an RTS or SEZ marketing label.

Has the Johor-Singapore RTS property opportunity already been priced in?

The Johor-Singapore RTS opportunity is already partly priced in, so simply buying near Bukit Chagar is no longer enough of an investment thesis.

Investors have known about the line for years. Construction progress, the Special Economic Zone and the approaching launch have already pushed attention toward central Johor Bahru.

Johor's 6.9% average house-price increase in 2025, versus 2.6% nationally, suggests some of that optimism is already inside current prices.

The bigger test comes after trains start carrying passengers.

A cross-border railway with five-minute travel time and capacity of up to 10,000 passengers per hour in each direction could make Johor a realistic home base for many more Singapore-linked workers. Co-located immigration facilities should also make the commute far easier than today's road crossing.

What we still do not know is which buildings those commuters will actually choose, what rents they will accept and how large the long-term tenant pool will become.

Today, we would rather pay for proven proximity and good existing demand than pay a large premium for an RTS-themed launch whose rent is still hypothetical.

Is Penang still worth buying for property investment?

Penang still makes sense for patient property buyers, but the rental return is weaker than the economic story.

Penang's economy grew 7.3% in 2025, second only to Johor among Malaysian states. GDP per capita reached roughly RM80,500, comfortably above the national average.

Its electronics and semiconductor industry gives Penang a real employment base, and MIDA recorded RM32.9 billion of approved investment in the state in 2025.

Transport should improve too. Construction of the Mutiara LRT is underway, with a planned route of almost 30 kilometres and about 20 stations.

The problem is price versus rent. Penang's average house price was already around RM498,000 in 2025, while Global Property Guide's George Town sample showed gross rental yields of only about 3.7%.

For investors who mainly want cash flow, Johor currently looks stronger.

For buyers who care more about long-term scarcity, a strong local economy and limited land on Penang island, Penang is still one of Malaysia's better long-horizon markets.

Should you buy a landed house or a condo in Malaysia now?

Landed property currently has the stronger case in Malaysia, while generic high-rise projects need much more scrutiny.

The national price data already show the gap. Terraced houses rose 3.3% in 2025, compared with only 0.6% for high-rise homes. In the first quarter of 2026, terraced properties were still up 2.2% year-on-year versus 1.3% for high-rises.

Scarcity explains part of it. Mature neighbourhoods in Kuala Lumpur, Petaling Jaya, Penang and central Johor cannot easily create more landed plots. Developers can add hundreds of new condo units much faster.

Completed unsold stock has also climbed sharply, and serviced apartments make the high-rise supply problem even harder to ignore.

That does not make every landed house attractive. Entry prices can be much higher, yields can be lower, and some peripheral landed developments have poor transport and weak rental demand.

Our rule today is simpler: the easier a property is for another developer to reproduce nearby, the stronger its location and rental economics need to be.

Is Malaysia's economic growth strong enough to push property prices higher?

Malaysia's economy is strong enough to support property demand, but we would not expect that growth to lift every neighbourhood equally.

The country grew 5.2% in 2025. Johor grew 8.0%, Penang 7.3% and Selangor 6.3%.

MIDA also recorded a record RM426.7 billion of approved investment in 2025. Johor received RM110 billion, Selangor RM83.9 billion, Kuala Lumpur RM63.3 billion and Penang RM32.9 billion.

Another RM92.8 billion was approved nationally in the first quarter of 2026, with those projects expected to create more than 50,000 jobs.

The useful part for property buyers is where those investments create actual workers, suppliers, offices and households.

Data centres are a good example. Malaysia is attracting huge amounts of capital from cloud and technology companies, but a multibillion-ringgit data centre does not create the same number of nearby residents as a labour-intensive manufacturing hub or large office cluster.

So the investment boom is real, but its housing effect will be highly local.

Location	2025 GDP growth	2025 approved investment	Q1 2026 approved investment	Housing impact
Malaysia	5.2%	RM426.7bn	RM92.8bn	Strong background
Johor	8.0%	RM110.0bn	RM16.9bn	Strongest catalyst mix
Selangor	6.3%	RM83.9bn	RM33.5bn	Large employment base
Kuala Lumpur	—	RM63.3bn	RM16.9bn	Mature but expensive
Penang	7.3%	RM32.9bn	RM6.2bn	Strong industrial demand

Is the stronger ringgit making Malaysian property less attractive to foreigners?

The stronger ringgit has made Malaysian property noticeably more expensive for new foreign buyers.

Bank Negara Malaysia reported that the ringgit appreciated 10.2% against the US dollar during 2025, making it the strongest-performing regional currency over that period. It had strengthened another 3.3% against the dollar on a year-to-date basis by mid-May 2026.

For a buyer holding dollars, euros or another foreign currency, a Malaysian property can therefore become more expensive even when its ringgit price barely changes.

The reverse was beneficial for foreigners who bought when the ringgit was weaker. They may have earned a currency gain on top of any property appreciation.

Malaysia can still look cheap compared with Singapore and other major Asian cities. But for a new foreign buyer today, the currency discount is much smaller than it was a few years ago.

Has Malaysia become a worse deal for foreign property buyers?

Malaysia has become materially less attractive for foreign residential investors because the upfront tax cost has jumped.

The biggest change is stamp duty. Under the Finance Act 2025, residential property transfers to non-citizens who are not permanent residents, and to foreign companies, are now charged a flat 8%.

On a RM1 million purchase, that means RM80,000 of stamp duty before legal fees, furnishing, renovation or financing.

Foreigners must also follow state-level minimum purchase prices, which vary depending on where they buy.

Selling quickly is expensive too. Malaysia's Real Property Gains Tax charges non-citizens and non-permanent residents 30% of taxable gains during the first five years and 10% from the sixth year onward.

MM2H adds another set of rules. Current programme categories require property purchases starting at RM600,000 for Silver, RM1 million for Gold and RM2 million for Platinum, with long holding requirements attached.

For foreigners, Malaysian property now works much better as a long-term lifestyle or investment purchase than as a short-term trade.

Foreign-buyer issue	Current treatment	What it means
Residential transfer stamp duty	8% flat	High upfront friction
RM1m property stamp duty	RM80,000	Much higher break-even point
RPGT, years 1–5	30% of taxable gain	Short flips are unattractive
RPGT, year 6 onward	10%	Exit tax remains relevant
MM2H property minimum	RM600k–RM2m	Limits the purchase range
MM2H resale	Generally long holding period	Low flexibility

Is a resale property better than a new launch in Malaysia now?

Resale property currently gives buyers a much cleaner way to judge value in Malaysia.

NAPIC recorded 256,512 residential transactions in 2025, and roughly 84.5% happened in the secondary market rather than through direct purchases from developers.

With a completed resale property, we can inspect the building, see how well it has aged, check real maintenance fees, compare actual rents and look at completed transactions in the same project.

A new launch asks buyers to estimate most of those things years in advance.

New projects can still be worth paying for when they offer something genuinely hard to copy, such as direct rail integration, a rare location or a very large early-phase discount.

But if a five-year-old building next door is cheaper, already occupied and produces a known rental yield, the resale unit has a big advantage these days.

In the current Malaysian market, we would make the new launch prove why it deserves a premium.

Does buying property in Malaysia make more sense if you plan to live there?

Buying property in Malaysia makes much more sense today when the buyer genuinely expects to live in it for many years.

Owner-occupiers get an economic benefit that landlords do not: they stop paying rent elsewhere.

That changes the numbers. A Kuala Lumpur apartment producing only a 4% gross yield may look average as an investment, but it can still make sense for someone who wants to live there for ten years and would otherwise pay rent every month.

The holding period matters because property comes with legal fees, taxes, financing costs and a slow resale process.

For Malaysian buyers who expect to stay seven to ten years, getting the neighbourhood, building and purchase price right matters more than trying to predict the next move in the national property index.

Foreign owner-occupiers need a higher hurdle because the 8% transfer duty makes buying and then changing plans much more expensive.

Which Malaysian properties would we avoid right now?

We would currently avoid Malaysian properties that need another investor to arrive later and pay a higher price for the story to work.

Generic serviced residences in already crowded areas are the clearest example. We would also be wary of luxury towers with weak rents, projects marketed mainly overseas, peripheral developments built around infrastructure that is still many years away, and launches priced well above comparable completed homes.

Malaysia already has a large stock of completed unsold residential and serviced-apartment units. High-rise price growth has also lagged landed housing, while overall transaction activity has softened.

That gives buyers one big advantage today: there is enough choice to walk away.

If the rent looks weak, the surrounding supply looks excessive or the developer's projected resale price is doing most of the work, we would skip it.

So should you buy real estate in Malaysia now?

Yes, selectively. Malaysia is a good place to buy the right property now, but the average investment deal is not strong enough to justify buying simply because the country is growing.

National house prices are still rising, but only slowly. Transaction activity has weakened. Rental yields around 5% gross look reasonable rather than exceptional, especially after costs.

At the same time, Malaysia's economic backdrop is genuinely strong. Approved investment reached RM426.7 billion in 2025, Johor and Penang are growing much faster than the national average, major transport projects are moving forward, and borrowing costs are a little lower than they were.

That combination rewards selective buyers.

For Malaysians, we currently like established landed homes where supply is genuinely limited, resale condos with proven occupancy and rents, transit-connected parts of the Klang Valley, and well-chosen Johor properties with real Singapore-linked demand.

Penang still looks good for patient buyers who care more about long-term scarcity than immediate yield.

Foreign buyers should be much pickier. The stronger ringgit, 8% residential transfer duty and less favourable exit costs mean the old “Malaysia is cheap” argument no longer carries enough weight on its own.

Our conclusion is quite clear: Malaysia is worth buying in now when the property already works on today's numbers. If the deal only looks attractive because of a future train line, a promised tenant boom or assumed price growth, we would leave it alone.

Who is the author of this content?

BAMBOOROUTES

A team specialized in real estate investing in APAC countries (Japan, Thailand, Indonesia, Australia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Malaysia. If you’d like to learn more about us, you can check our presentation page.