Buying property in Malaysia: is it worth it?

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

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.

How this content was created 🔎📝

At BambooRoutes, we explore the Malaysian real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Kuala Lumpur, Penang, and Johor Bahru. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

How much do properties actually cost in Malaysia right now by type and by key cities or regions?

Property prices in Malaysia show significant variation across cities and property types, with Kuala Lumpur commanding premium prices compared to secondary cities.

Kuala Lumpur leads the market at MYR 794,467 average, followed by Selangor at MYR 553,693 and Penang at MYR 475,037. Johor averages MYR 437,280, driven largely by Johor Bahru's proximity to Singapore and ongoing infrastructure projects including the RTS Link.

More affordable options exist in Melaka at approximately MYR 240,655 and Perlis at MYR 245,031, offering entry points for budget-conscious buyers. These secondary cities provide good value but limited liquidity compared to major urban centers.

Property Type	National Average Price (MYR)	Annual Growth Rate
Terraced House	466,506	1-2%
Semi-Detached	730,851	1.5-2.5%
Condominium/High-rise	378,414	1.8%
Detached/Landed	648,403	2-3%
Commercial Properties	Location-dependent	Variable

Commercial properties command premium prices in central business districts, with yields highly location-dependent and strongest performance in major urban centers where demand from businesses and investors remains robust.

How have prices been moving in the short term, medium term, and long term?

Malaysia's property market demonstrates steady but moderate growth patterns across different timeframes, with infrastructure development driving regional variations.

Short-term price movements over the past 12 months show 2-5% nationwide growth, with hotspots near transit and infrastructure projects experiencing up to 10% increases. Areas benefiting from new MRT/LRT connections and the upcoming RTS Link to Singapore command premium growth rates.

Medium-term trends over 3-5 years reveal moderated growth compared to pre-pandemic levels, with average annual increases of just 1-4% compared to earlier boom periods. This represents a normalization after years of rapid expansion and reflects more sustainable market conditions.

Long-term data over 10 years shows Malaysia's house price index nearly doubling, with notable periods of rapid growth exceeding 14% annually in 2012, followed by much slower growth since 2016 as the market matured.

As of September 2025, the Malaysian residential market shows signs of stabilization with selective growth in well-connected urban corridors and ongoing challenges in oversupplied segments.

What are the average rental yields in different areas and for different property types?

Rental yields across Malaysia average 5.1% nationally, with performance varying significantly by location and property type.

Kuala Lumpur and Johor Bahru deliver 4-6% gross rental yields, with entry and mid-tier condominiums typically outperforming luxury high-rise developments. This reflects stronger demand from local professionals and expatriate workers compared to ultra-premium segments.

Secondary cities and tourist hotspots including Penang achieve similar or higher yields, particularly in districts where short-term rentals are permitted. Tourist-focused properties benefit from both long-term rental demand and seasonal short-term opportunities.

The strongest rental yields come from well-located smaller units near universities, hospitals, and business districts, where consistent demand from students, medical professionals, and working professionals maintains occupancy rates above 85%.

It's something we develop in our Malaysia property pack.

How strong is the rental demand today in major cities compared to secondary cities or tourist areas?

Rental demand remains strongest in Kuala Lumpur, Johor Bahru, and Penang, driven by employment opportunities, educational institutions, and business activities.

Kuala Lumpur maintains the highest rental demand due to its role as Malaysia's economic center, with consistent need from expatriate professionals, local workers, and students. Properties near LRT/MRT stations and business districts experience the shortest vacancy periods.

Johor Bahru benefits from cross-border employment with Singapore, creating steady demand for rental properties from Malaysian workers and some Singaporean residents seeking more affordable housing options. The upcoming RTS Link is expected to further strengthen this demand.

Secondary cities show softer and slower rental demand, particularly in oversupplied suburbs where new high-rise developments have created excess inventory. Tourist areas experience seasonal fluctuations but can achieve higher yields during peak periods.

Overall vacancy rates remain manageable in prime urban locations but increase significantly in peripheral areas and oversupplied segments, requiring careful location selection for rental investment strategies.

What are the transaction costs, taxes, and ongoing fees you need to plan for when buying and holding property?

Transaction costs in Malaysia typically range from 4-8% of the purchase price, with additional ongoing expenses for property maintenance and taxes.

Stamp duty follows a progressive structure from 1-4%, with higher rates above MYR 1 million. Legal fees add another 0.4-1% of the purchase price, while agent commissions reach up to 3% typically paid by the seller.

Foreign buyers face minimum investment thresholds of MYR 1 million nationally, rising to MYR 2 million in Selangor. This requirement significantly impacts entry-level options for international investors.

1. **Initial Purchase Costs:** - Stamp duty (1-4% progressive) - Legal fees (0.4-1%) - Agent commission (up to 3%) - Property valuation fees - Loan processing fees (if financing)2. **Ongoing Holding Costs:** - Quit rent (annual land tax) - Assessment tax (local council charges) - Service charges for condominiums - Maintenance fees and sinking fund contributions - Property management fees if renting out3. **Additional Foreign Buyer Considerations:** - Higher deposit requirements (20-30%) - Limited financing options - Potential currency conversion costs - Professional advisory fees for compliance

These costs significantly impact overall returns and require careful budgeting, particularly for foreign investors who face additional complexity and higher upfront requirements compared to local buyers.

How easy is it to resell a property, and how long does it typically take to find a buyer depending on the location and type?

Property liquidity in Malaysia varies dramatically by location and type, with urban high-demand areas offering the best resale prospects.

Urban high-demand areas including central Kuala Lumpur, established Petaling Jaya suburbs, and well-connected Penang locations typically require 3-6 months for successful transactions. Mid-priced condominiums near transit stations and good schools experience the shortest marketing periods.

Oversupplied segments and outlying districts face significant challenges, with luxury condominiums, distant suburbs, and secondary cities potentially taking 9-18 months or longer to find buyers. Premium-priced properties in these areas may require substantial price reductions to attract offers.

The most liquid properties include affordable to mid-range landed homes in established neighborhoods, well-managed condominiums with good facilities, and properties within walking distance of public transport. These segments consistently attract multiple viewing requests and competitive offers.

Market conditions as of September 2025 favor buyers, with sellers in many segments needing to be competitive on pricing and flexible on terms to achieve timely sales completion.

What are the main differences between foreigner-friendly zones and restricted areas, and how does this impact prices and liquidity?

Malaysia's property market includes distinct zones with different accessibility for foreign buyers, significantly affecting pricing and investment liquidity.

Foreigner-friendly zones include KLCC, KL city fringe areas, Iskandar Malaysia in Johor, select Penang and Johor coastal developments, and major resort/tourist destinations. These areas welcome international investment and maintain active secondary markets.

Restricted areas encompass Malay Reserve land, certain kampung areas, and properties subject to bumiputera quotas, which are not available to foreign buyers. These restrictions help preserve local housing affordability but limit foreign investment options.

Price premiums in foreigner-friendly zones typically range from 10-30% above comparable restricted areas, reflecting the broader buyer pool and international demand. However, some foreigner-focused developments experience oversupply issues that can suppress rental yields despite higher purchase prices.

Liquidity advantages in unrestricted zones include faster transaction times, broader financing options, and greater resale flexibility, making them preferred choices for foreign investors despite higher entry costs.

What budget ranges are considered entry-level, mid-range, and premium in the Malaysian market, and what do you actually get in each?

Malaysia's property market segments into clear budget tiers, each offering distinct property types and locations suited to different investment strategies.

Budget Tier	Price Range (MYR)	Property Options
Entry-Level	Under 500,000	Studios, small 2-bedroom condos in suburbs; landed homes in rural towns
Mid-Range	500,000 - 1,500,000	Family condos in central KL/Penang; landed homes in mature PJ suburbs
Premium/Luxury	1,500,000 - 5,000,000+	Large landed homes in elite suburbs; luxury condos; CBD commercial offices
Ultra-Premium	Above 5,000,000	Luxury landed properties; penthouse units; prime commercial assets

Entry-level properties under MYR 500,000 typically include studio apartments or small two-bedroom condominiums in secondary suburbs or city fringe areas. Rural towns occasionally offer landed homes at these prices, though with limited resale liquidity.

Mid-range properties from MYR 500,000 to MYR 1.5 million encompass family-sized condominiums in central Kuala Lumpur or Penang, plus landed homes in mature suburbs like Petaling Jaya. These properties offer good rental potential and reasonable appreciation prospects.

Premium segments above MYR 1.5 million include large landed homes in elite suburbs, luxury condominiums with full facilities, and commercial offices in central business districts, targeting affluent locals and expatriate professionals.

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.

Which areas or cities are expected to grow the fastest in the next few years, and which ones are stagnating or oversupplied?

Malaysia's property growth prospects concentrate in infrastructure-connected areas while several segments face oversupply challenges through 2025-2027.

Fastest-growing areas include Johor Bahru districts near the Singapore border, particularly those benefiting from the upcoming RTS Link completion. Kuala Lumpur sites along new MRT and LRT lines show strong appreciation potential, while Penang's technology corridor attracts continued investment.

Infrastructure developments drive growth patterns, with areas within walking distance of new transit stations experiencing 8-12% annual appreciation compared to 2-4% market averages. Government-backed projects including Bandar Malaysia and Forest City continue attracting development interest.

Stagnating segments include luxury condominiums in Johor Bahru CBD, outer Kuala Lumpur suburbs with excessive high-rise launches, and secondary cities with limited economic drivers. These areas show flat to negative growth and extended marketing periods.

1. **High Growth Potential Areas:** - Johor Bahru (RTS Link corridor) - KL areas near MRT/LRT extensions - Penang technology districts - Klang Valley integrated developments - Tourist zones with infrastructure upgrades2. **Oversupplied/Stagnating Areas:** - Luxury condo developments in secondary cities - Peripheral KL suburbs with mass launches - Tourist areas without transport connectivity - Industrial towns with declining employment - Remote landed developments without amenities

Smart buyers focus on locations with confirmed infrastructure projects and established economic drivers rather than speculative developments in unproven areas.

What are the financing options available to foreigners and residents, and how do mortgage terms compare to other countries in the region?

Malaysian property financing offers distinct advantages for residents while presenting limitations for foreign buyers compared to regional alternatives.

Resident financing includes loan-to-value ratios up to 90-100% for first-time homebuyers, competitive fixed and variable interest rates, and standard 30-35 year repayment terms. Major local banks compete aggressively for resident mortgage business.

Foreign buyer financing faces restrictions including LTV caps at 70-80%, higher minimum income and asset requirements, interest rates of 4-5.5%, and limited bank selection. Documentation requirements are extensive and processing times longer than resident applications.

Regional comparisons show Malaysia offering more favorable leverage and lower rates than Indonesia or Philippines for foreign buyers, but less attractive terms than Singapore or certain Thai banks that cater to international investors.

It's something we develop in our Malaysia property pack.

How does property ownership differ between freehold and leasehold in Malaysia, and what does that mean for long-term value?

Property tenure in Malaysia fundamentally impacts long-term value, financing options, and resale prospects, making freehold properties generally preferable for investment purposes.

Freehold ownership provides permanent property rights with no time limitations, easier financing approval from banks, and strongest long-term value retention. Banks readily approve mortgages for freehold properties and buyers show clear preference during resale.

Leasehold properties, typically with 99-year terms, offer lower entry costs but face value depreciation as remaining tenure decreases. Properties with less than 60 years remaining experience accelerated value decline, while those under 50 years become difficult to finance or resell.

Financing implications show banks requiring higher down payments and offering shorter loan terms for leasehold properties with limited remaining tenure. Some lenders refuse mortgages entirely for properties with less than 30 years remaining.

Investment strategy considerations favor freehold for long-term appreciation and rental stability, while short-term leasehold properties may offer value opportunities if purchased at significant discounts to comparable freehold alternatives.

If you were to buy today, what strategy makes the most sense depending on your goal: living, renting out, or reselling later?

Optimal property investment strategies in Malaysia depend heavily on individual goals, with different approaches for owner-occupation, rental income, and capital appreciation.

Owner-occupiers should prioritize freehold landed properties or well-managed mid-tier condominiums in areas with strong local amenities and public transport access. Focus on established neighborhoods with good schools, healthcare facilities, and shopping centers rather than newest developments.

Rental income strategies work best with smaller units near universities, hospitals, and business districts, or properties in secondary cities and tourist areas where yields exceed urban averages. Consider short-term rental potential in tourist zones where regulations permit.

Capital appreciation strategies should target freehold properties in infrastructure growth corridors, well-located landed homes with redevelopment potential, or transit-oriented condominiums in proven areas. Avoid oversupplied luxury segments unless available at significant discounts.

1. **For Owner-Occupation:** - Prioritize location over property size - Choose established neighborhoods - Focus on transport connectivity - Consider future family needs - Opt for freehold where possible2. **For Rental Income:** - Target smaller, manageable units - Choose areas with steady demand - Consider university/hospital proximity - Evaluate short-term rental potential - Factor ongoing management costs3. **For Capital Appreciation:** - Focus on infrastructure corridors - Choose proven over speculative areas - Prioritize freehold ownership - Avoid oversupplied segments - Consider redevelopment potential

It's something we develop in our Malaysia property pack.

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.

Sources

1. Global Property Guide - Malaysia Price History
2. BambooRoutes - Malaysia Price Forecasts
3. CEIC Data - Malaysia House Prices Growth
4. Trading Economics - Malaysia Residential Property Prices
5. Kaggle - House Prices in Malaysia 2025
6. NAPIC - Property Market Data Visualization
7. NAPIC - Q1 2025 Property Market Snapshots
8. Numbeo - Property Investment Rankings 2025