Authored by the expert who managed and guided the team behind the Malaysia Property Pack
Everything you need to know before buying real estate is included in our Malaysia Property Pack
Malaysia's property market is experiencing stable growth with moderate price increases as of September 2025.
Property prices nationwide rose 1.4% year-on-year in 2024, though regional differences are significant, with urban areas like Kuala Lumpur facing oversupply challenges while Johor Bahru and Penang show stronger performance and higher rental yields.
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.
Malaysia's property market shows stable growth with national prices rising 1.4% year-on-year in 2024, though a quarterly decline occurred in early 2025.
Regional performance varies significantly, with Johor Bahru achieving 6.22% rental yields while Kuala Lumpur faces ongoing oversupply issues.
| Market Indicator | Current Status (Sep 2025) | Trend |
|---|---|---|
| National Average House Price | RM483,879 | +1.4% year-on-year |
| Quarterly Price Change Q4 2024 | -2.01% | First decline since Q3 2021 |
| Johor Bahru Rental Yield | 6.22% | Strong performance |
| Transaction Volume H1 2025 | -6.2% deals, -8.9% value | Market adjustment |
| Kuala Lumpur Market | Oversupply concerns | Restrained growth |
| Interest Rate Environment | Recent cuts | Supporting demand |
| Foreign Investment | Active in luxury segment | Stable demand |
What is the current trend in property prices in Malaysia?
Malaysia's residential property market is showing stable growth with moderate price increases as of September 2025.
Property prices increased 1.4% year-on-year nationwide in 2024, with the national average house price reaching RM483,879. However, the most recent quarterly data shows a 2.01% decline for Q4 2024, marking the first real quarterly drop since Q3 2021.
This trend indicates the market is cooling after previous robust gains, with price increases remaining within the inflation rate of typically 0.7%-1.4% for urban terrace and high-rise units. The market is experiencing more price stability than aggressive growth, which suggests a healthy adjustment rather than a concerning downturn.
Regional variations are significant, with areas like Johor Bahru showing stronger performance while Kuala Lumpur faces more restrained growth due to oversupply concerns.
It's something we develop in our Malaysia property pack.
How has the real estate market performed over the past year?
The Malaysian real estate market demonstrated resilience over the past year despite facing some headwinds in early 2025.
Transaction volumes hit 10-year highs in 2024, indicating strong market activity and buyer confidence. However, this momentum faced adjustment in the first half of 2025, with a 6.2% dip in deal numbers and an 8.9% fall in deal value, reflecting a market correction after the prolonged surge.
The market showed strong fundamentals throughout 2024, with Malaysia's economic growth supporting sustained buyer demand. GDP grew 4.4% in Q1 2025, underpinning the property sector's stability. Infrastructure investment, particularly in regions like Johor and Penang, continued to drive regional development and property demand.
Developers remained cautious with new launches, responding tactically to demand and rising construction costs. This measured approach helped prevent oversupply in many areas, though some urban segments, particularly serviced apartments, still face inventory absorption challenges.
Overall, the market performed well with balanced growth, avoiding both speculative bubbles and significant downturns.
Are property prices falling in specific regions or nationwide?
Property price trends vary significantly across Malaysia's regions, with no uniform nationwide decline occurring.
Urban areas, especially Kuala Lumpur, are experiencing moderate upward price trends but face oversupply concerns, particularly with high-rise units. The capital shows restrained growth due to market saturation and abundant supply in certain segments.
Johor Bahru and Penang outperform the national average due to infrastructure investment and strong local demand. Johor Bahru achieved some of the highest rental yields at 6.22% and experienced a strong jump in residential transaction value, while Penang showed slight dips in high-rise unit prices but maintained overall stability.
Many rural and outlying regions see much more restrained price growth, limited by affordability constraints and slower demand. These areas haven't experienced significant price falls but show minimal appreciation compared to urban centers.
The affordable housing and mass-market segments drive the bulk of residential transactions nationwide, maintaining stable pricing across most regions.
What factors are influencing property price changes in Malaysia?
Several key factors are driving property price changes across Malaysia's residential market.
Major infrastructure projects significantly influence regional property values, including the RTS Link in Johor, new Penang connections, and the East Coast Rail Link (ECRL). These developments unlock new growth corridors and boost property demand in affected areas.
High construction costs push developers to raise sale prices for new builds, though price growth is capped by affordability constraints. This creates upward pressure on new property prices while existing stock remains more stable.
Stable financing conditions and strong demand from both local and foreign investors help balance new supply. The central bank's recent interest rate cuts support housing demand and improve financing accessibility for buyers.
Government policies through programs like PR1MA, Residensi Wilayah, and Rumah Selangorku incentivize affordable housing and support market activity, especially for first-time and middle-income buyers. These initiatives help maintain transaction volumes in the mass market segment.
Don't lose money on your property in Malaysia
100% of people who have lost money there have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.
How do the economic conditions in Malaysia impact property prices?
Malaysia's economic conditions provide a supportive foundation for the property market as of September 2025.
The country's GDP growth of 4.4% in Q1 2025 underpins sustained buyer demand and confidence in the property sector. This economic expansion creates employment opportunities and income growth, supporting homebuyer purchasing power.
The central bank's recent interest rate cuts help stimulate housing demand by improving financing accessibility and reducing borrowing costs for property buyers. This monetary policy stance supports transaction volumes and market liquidity.
Malaysia's economic stability attracts foreign investment, particularly in luxury and prime urban developments. International demand remains strong from Asia Pacific, Middle Eastern, and Chinese investors, contributing to price stability in premium segments.
However, inflation affects construction costs and development expenses, which developers pass on to buyers through higher sale prices. This creates a balance between economic growth supporting demand and cost pressures affecting supply pricing.
Is there a significant difference in property price trends between urban and rural areas?
| Area Type | Price Trend | Key Characteristics |
|---|---|---|
| Kuala Lumpur Urban | Restrained growth, oversupply concerns | High-rise and landed properties facing market saturation |
| Johor Bahru Urban | Strong performance, 6.22% rental yields | Infrastructure investment driving demand |
| Penang Urban | Slight dips in high-rise, overall stable | Good connectivity and local demand |
| Secondary Urban Centers | Moderate growth | Government housing programs supporting activity |
| Rural Areas | Minimal appreciation | Limited by affordability and slower demand |
| Outlying Regions | Restrained growth | Infrastructure dependency for future growth |
| Mass Market Nationwide | Stable pricing | Affordable housing driving bulk transactions |
Are there any government policies affecting the property market?
The Malaysian government implements several policies that significantly impact the property market dynamics.
Key affordable housing programs include PR1MA, Residensi Wilayah, and Rumah Selangorku, which incentivize homeownership and support market activity for first-time and middle-income buyers. These initiatives help maintain transaction volumes in the mass market segment and prevent excessive price appreciation in affordable housing categories.
Infrastructure improvement policies unlock new growth corridors and bolster property demand in strategic areas. The government's focus on connectivity projects like the RTS Link and ECRL creates development opportunities that drive regional property appreciation.
The New Industrial Master Plan 2030 supports broader economic development that indirectly benefits the property market by creating employment and income growth. This policy framework encourages industrial development that supports residential demand in surrounding areas.
Foreign investment policies continue to allow international buyers to participate in the market, particularly in luxury and prime developments, maintaining demand in higher-end segments. These policies balance local homebuyer needs with foreign investment benefits.
It's something we develop in our Malaysia property pack.
How does demand for property compare to supply in Malaysia right now?
Malaysia's property market shows a complex supply-demand dynamic with regional variations as of September 2025.
Transaction volumes hit 10-year highs in 2024, indicating strong underlying demand, though a 6.2% dip in deal numbers and 8.9% fall in deal value occurred in early 2025. This represents a market adjustment after a prolonged surge rather than fundamental demand weakness.
Developers remain cautious with new launches, responding tactically to demand and rising construction costs. This measured supply approach helps prevent oversupply in many areas, though some segments still face challenges.
Unsold residential unit overhang rates dropped since Covid peaks, but certain areas, especially serviced apartments and high-rise units in Kuala Lumpur, still face inventory absorption challenges. Urban areas show more supply pressure than rural regions.
Strong demand from both local and foreign investors helps balance new supply, particularly in well-located projects and infrastructure-connected areas. The affordable housing segment maintains healthy demand-supply balance due to government support and buyer affordability focus.
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 role does foreign investment play in the Malaysian property market?
Foreign investment plays a significant role in Malaysia's property market, particularly in premium segments.
Foreign buyers remain active, especially among luxury and prime urban developments, with international demand strong from Asia Pacific, Middle Eastern, and Chinese investors. This international interest provides price support and liquidity in higher-end market segments.
Foreign investment focuses on flagship projects and mid- to high-end urban units, driving demand and pricing in those specific segments. These investors often target properties in prime locations with strong rental potential and capital appreciation prospects.
International buyers contribute to market stability by providing a consistent demand base that helps absorb premium inventory. Their presence supports developer confidence in launching high-end projects and maintains price levels in luxury segments.
Foreign investment patterns show preference for areas with strong infrastructure connectivity and established expatriate communities, particularly in Kuala Lumpur's premium districts and resort areas like Langkawi and Penang.
Government policies continue to facilitate foreign property investment while ensuring local buyer protection, maintaining a balanced approach that supports market liquidity without displacing domestic demand.
Have property prices fallen in major cities like Kuala Lumpur?
Kuala Lumpur's property market shows mixed performance rather than outright price falls as of September 2025.
High-rise and landed properties in Kuala Lumpur demonstrate restrained growth with ongoing oversupply concerns. The market faces inventory absorption challenges, particularly in the serviced apartment segment and certain high-rise developments.
Price increases in Kuala Lumpur remain within the inflation rate of 0.7%-1.4% for urban terrace and high-rise units, indicating more price stability than significant growth or decline. This suggests a market correction rather than a crash.
Some segments within Kuala Lumpur show price stagnation or minor declines, especially in oversupplied areas or developments with weak location fundamentals. However, well-located properties continue to maintain value and show modest appreciation.
The capital's market reflects broader urban challenges with abundant supply meeting measured demand, creating a buyer's market in certain segments while prime locations retain their value proposition.
Foreign investment in Kuala Lumpur's luxury segment provides price support, preventing significant declines in premium properties while mass-market segments experience more pressure.
What is the outlook for property prices in Malaysia over the next 6 months?
Malaysia's property price outlook for the next six months points to continued moderate growth with regional variations.
Price growth is projected to be moderate at 2-5% annually, with regional outperformance expected where new infrastructure comes online. Areas benefiting from major connectivity projects will likely see stronger appreciation than the national average.
Well-located new projects may experience higher price increases while mass-market and oversupplied segments will remain stable or slightly subdued. This divergence reflects buyer selectivity and location premium importance.
No rapid price falls are expected nationwide, but price stagnation or minor declines may persist in saturated urban areas or specific segments with oversupply. Kuala Lumpur's high-rise market may continue facing headwinds.
Interest rate stability and government housing policies will support market activity and prevent significant downturns. The absence of imminent rate hikes aids buyer affordability and transaction volumes.
Infrastructure completion in key regions like Johor and Penang should drive localized price appreciation, while areas without connectivity improvements may lag behind national trends.
It's something we develop in our Malaysia property pack.
How do interest rates and financing options affect property prices in Malaysia?
Interest rates and financing conditions significantly influence Malaysia's property market dynamics and pricing trends.
Financing conditions remain stable as of September 2025, with no imminent rate hikes anticipated, which aids buyer affordability and supports transaction volumes. The central bank's recent interest rate cuts actively support housing demand by improving financing accessibility.
Lower borrowing costs increase buyer purchasing power, allowing them to afford higher-priced properties or larger loans. This monetary policy stance helps sustain demand even during market adjustment periods.
Incentive packages from developers and competitive mortgage rates further stimulate sales, especially in urban and luxury markets. Banks continue offering attractive financing terms to qualified borrowers, maintaining market liquidity.
Stable financing conditions help prevent significant price corrections by ensuring continued buyer access to credit. This supports property values by maintaining transaction activity and market confidence.
The combination of government housing programs and favorable financing creates supportive conditions for first-time buyers and middle-income segments, underpinning mass-market property demand and pricing stability.
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 property market demonstrates stability with moderate growth, making it an attractive option for both investors and homebuyers seeking value in Southeast Asia.
Regional opportunities in Johor Bahru and Penang offer stronger returns than saturated urban markets, while infrastructure development continues creating new investment corridors.
Sources
- BambooRoutes - Malaysia Property Market Outlook
- Bernama - Malaysia Property Market News
- PropertyGenie - Malaysia Property Market Q1 2025
- StarProperty - Property Market Adjustments 2025
- JLL - Kuala Lumpur Market Dynamics Report
- Trading Economics - Malaysia Residential Property Prices
- Raine & Horne - Mid-Year Property Market Review
- Asia Property Awards - Malaysia Property Market Foreign Interest
- Global Property Guide - Malaysia Price History
- CBRE - Malaysia Research Reports