This article first appeared in City & Country, The Edge Malaysia Weekly on January 13, 2025 - January 19, 2025
The Malaysian property market had a good 2024, with notable increases in transaction volume and value in the first nine months (9M2024) across all segments, particularly in residential and industrial. This growth was driven by economic stability, investor confidence and a robust financial system, which collectively supported market momentum.
The general consensus among the consultants whom City & Country spoke to is that the market will remain positive heading into 2025. Key factors include rising minimum wages hence stronger spending power, lower unemployment rate, growing foreign direct investment (FDI) and more upcoming mega projects and policies that are set to benefit the industry. Read on for further insights from these experts.
CBRE | WTW
Group managing director
Tan Ka Leong
The property market performed reasonably well, with transaction volumes and values up 5.9% and 12.6% year on year (y-o-y) respectively as at 9M2024. The residential sector showed improvement, with reduced overhang properties and higher transactions, reflecting growing buyer confidence. Recent land-banking activities by developers also further signal optimism.
The southern region of Peninsular Malaysia recorded the highest transaction volumes, contributing 26.2% of Malaysia’s total transaction volumes.
The industrial sector remains strong in demand. While there is demand for high-quality properties in commercial office spaces, the older ones continue to face competition, with the overall occupancy rate dipping slightly. The retail sector is improving, especially premium and neighbourhood malls, though incoming supply may apply pressure. The hotel sector is [seeing occupancy rates] nearing pre-pandemic levels, supported by rising tourism. Overall, the market shows encouraging progress, with diverse opportunities across sectors.
The Malaysian property market in 2025 is expected to show steady growth, driven by favourable economic conditions, government initiatives and improving infrastructure and connectivity. While affordability and supply pressures remain challenging in some areas, increased tourism, cross-border activities and strategic developments such as special economic zones and infrastructure upgrades are set to support demand across various property segments.
Strong fundamentals, including demand for upgraded amenities, enhanced logistics infrastructure and the rise of flexible workspaces, will further bolster market performance. Growth will be supported by opportunities in tourism, industrial expansion and government-backed initiatives, positioning Malaysia for sustainable progress despite foreseeable sector-specific challenges.
The residential market in Malaysia is presenting significant opportunities, driven by trends towards sustainability, government initiatives and strategic development efforts. Growing demand is supported by tax relief, affordable housing schemes and the introduction of green-certified and tech-enabled residential projects that align with buyers’ preferences for environmentally friendly and modern living spaces.
To further strengthen Malaysia’s property market, it requires addressing the supply-demand imbalance through comprehensive market research for new developments. This will better align projects with actual demand, focusing on affordability and location to reduce oversupply and create a balanced market. Standardising processes across government agencies, as outlined in Budget 2025, can streamline approvals, simplify procedures and boost investor confidence.
Easing financing for first-time buyers and upgraders (for owner-occupation) as well as affordable-home buyers will make homeownership more accessible, while targeted incentives for affordable housing can drive sustainable growth and address critical needs. These measures will strengthen the market’s resilience and appeal to both buyers and investors.
CCO & Associates (KL) Sdn Bhd
Director
Chan Wai Seen
The overall property market recorded a positive performance in 2024. The industrial property market continued to record strong performance from 2023, while certain residential properties in established locations recorded strong demand. In addition, the number of properties put up for auction increased.
Popular shopping complexes in Malaysia recovered to pre-pandemic levels while poorly managed shopping complexes struggled to maintain occupancy and rental rates.
In some locations, high-rise residential projects and purpose-built offices continued to be affected by oversupply. To avoid worsening oversupply, the relevant authorities and industry players must undertake extensive research before developing property projects.
The property market is expected to improve, driven by increased civil servant wages, minimum wages and improved employment due to the commencement of FDI approved since 2022. At a projected growth of 4.5% to 5.5%, the Malaysian economy will continue to support growth in the property market.
Industrial properties, popular shopping complexes and hotels will record strong performances spurred by positive economic growth and increased spending power. The performance of Grade-A offices is expected to remain stable or improve marginally, attributed to the increasing investments.
Meanwhile, the property market in Johor Bahru will improve with the completion of the Johor Bahru–Singapore Rapid Transit System (RTS) Link and the implementation of the Johor-Singapore Special Economic Zone (SEZ), especially residential properties located near the RTS and the customs, immigration and quarantine (CIQ) complex as well as industrial properties supported by good infrastructure and amenities.
The government is expected to intensify tourism promotions and activities leading to “Visit Malaysia Year 2026”. Occupancy and room rates of hospitality properties, including serviced apartments used for short-term stays, will improve.
Although the country recorded sustainable economic growth in the last few years, the spending power of most Malaysians has been affected by high household debt, which, to a certain extent, restrained property market growth. The recent increase in civil servant wages and minimum wages is a positive measure to boost the spending power of Malaysians and reduce household debts.
As the government assumes the Asean chair in 2025, it will be in a good position to promote Malaysia as the main gateway to Asean markets, capitalising on the country’s political stability, strong economic fundamentals and low cost of doing business.
Henry Butcher Real Estate Sdn Bhd
Chief operating officer
Tang Chee Meng
Overall, the Malaysian property market continued to chart a positive y-o-y performance in 9M2024, with both volume and value of transactions registering increases. The residential market continued to contribute the largest share of transactions in terms of both volume and value while commercial property transactions registered double-digit increases in both volume (+16.5%) and value (+32.7%) of transactions. The industrial sector was also buoyant, recording a single-digit increase in volume (+6.5%) but a double-digit increase in value (+22.8%) of transactions. Shopping malls and purpose-built offices registered a slight decline in occupancy rates in the third quarter.
Barring any major negative global developments, we are confident that the residential property market will stay on course for another year of positive growth. Nevertheless, we have some concerns about the office and retail property sectors, as the Klang Valley market could see an oversupply of office and retail space in the coming years unless effective measures are taken to boost demand or government policies are introduced to curb approvals for new projects.
The industrial sector is expected to chalk up a good performance, owing to the government’s policies and initiatives to push the industrial sector and attract more FDI. A more protectionist US policy adopted by the Trump administration could see some rerouting of manufacturing activities from China to Malaysia, thus benefitting the industrial sector. On the flip side, the imposition of tariffs on imports by the Trump administration may have some negative impact on Malaysia’s exports.
As always, investors and homebuyers should do their homework thoroughly before investing. Areas that will see an improvement in accessibility and liveability — arising from the completion of new infrastructure and commercial projects or public amenities — are likely to see an increase in property value and rental potential. Established and popular areas with limited new supply will always be good long-term investment options. Landed properties will continue to attract more interest from owner-occupiers while strata developments in established areas with amenities will also be able to garner interest from investors and owner-occupiers.
To expedite recovery in the property market, the government could play a role in helping control construction and development costs through implementing the right policies, particularly for the building of affordable homes to encourage developers to build more of such homes for the B40 and M40 groups.
JLL (Malaysia)
Managing director
Jamie Tan
The Malaysian property market has demonstrated resilience and growth in the past few years. Despite the disruptions caused by the pandemic, the sector has not only rebounded by 2024 but also surpassed pre-pandemic transaction volumes and values. This robust recovery underscores the market’s strong fundamentals and renewed investor confidence across property segments.
The outlook for Malaysia’s property market in 2025 is cautiously optimistic, supported by encouraging statistics. FDI will continue to be instrumental in driving demand, especially in the industrial, data centre and commercial sectors.
As Malaysia positions itself as a hub for data centres, logistics and manufacturing under the China+1 strategy, sustained FDI inflows and domestic investments are expected to fuel further growth in these sub-sectors, further propelling the expansion of the overall property market. Nevertheless, the real estate market and general economy in 2025 and beyond will be highly influenced by external factors, including geopolitical tensions and economic uncertainties.
Data centres and industrial properties are leading the growth in the real estate market, fuelled by FDI and digital transformation. Businesses and governments increasingly require secure facilities for cloud storage, while the rise of e-commerce has driven demand for logistics and warehouse spaces. Malaysia’s strategic location in Southeast Asia and affordable real estate will continue to enhance its appeal to foreign investors.
Emerging opportunities include centralised labour quarters, which cater for the growing manufacturing sector. These regulated accommodations meet government standards and are crucial as demand for workers’ housing increases alongside industrial growth.
For the residential segment, transit-oriented development (TOD) is in high demand because of connectivity. Areas near thriving industrial hubs, data centres and logistics parks also offer residential investment potential, as large corporations and tech parks generate demand for nearby housing. Meanwhile, new township developments that focus on gated communities or lifestyle hubs are also gaining traction.
Nonetheless, the property market is among the most heavily taxed industries in Malaysia. Beyond the usual income tax, quit rent and assessments, property developers also face substantial statutory contributions. These costs have a heavy impact on property selling prices, with the increases ultimately passed on to consumers.
In addition to escalating construction costs, any price appreciation observed in the market is mainly cost-driven rather than reflecting real value growth. A more equitable system for imposing and quantifying statutory contributions by the local authorities is essential for better management of development costs. Excessive charges not only distort real property values but also create financial barriers, particularly for first-time homebuyers.
KGV International Property
Consultants Executive director
Anthony Chua
The Malaysian real estate market surged ahead in 2024, showing impressive momentum, with both transaction activity and property prices registering strong gains. The combination of economic stability, renewed investor confidence and a resilient financial system has created an optimistic environment for sustained growth in the market.
The overhang, a persistent challenge in the market, has notably improved, with the number of unsold units falling to 22,000, from more than 25,000 a year ago. This progress is largely attributed to the cautious approach adopted by developers, who have moderated the pace of new project launches, effectively curbing the accumulation of unsold inventory.
The standout theme in the real estate landscape for 2024 is undeniably the rise of data centres. Malaysia hosts nearly 100 data centres, both operational and in various stages of planning. Between 2021 and 2024, Malaysia approved RM162 billion in digital investments, with a remarkable 76% allocated to new data centres, reflecting the growing demand for digital infrastructure as the nation positions itself as a regional hub for data-driven industries.
This substantial investment is set to boost the construction sector. It is worth considering, however, whether data centres can generate significant economic benefits in the long term for their immediate localities, as real estate is a highly localised market. Unlike developments such as theme parks or university campuses, data centres as digital storage facilities offer limited spillover in terms of business growth, employment opportunities or housing demand. Cyberjaya, home to many existing data centres, exemplifies this challenge, having seen limited development since its inception. Nonetheless, we hope data centres can act as a springboard for Malaysia to establish itself in AI-related and other advanced digital industries in the coming years.
In the coming year, hospitality presents a promising opportunity as the tourism sector continues its strong recovery. Tourist arrivals have been encouraging, setting the stage for growth. With “Visit Malaysia Year 2026” on the horizon, 2025 offers an ideal window for industry players to make substantial preparations and capitalise on increased tourists.
Looking ahead, the property market appears well positioned for further expansion. In this evolving landscape, the importance of objective market research cannot be overstated. Thorough analysis and data-driven insights are essential for assessing the viability of new projects, enabling stakeholders to make informed decisions and contribute to a sustainable and thriving market while avoiding the overhang issues of the past.
Knight Frank Malaysia
Group managing director
Keith Ooi
The Malaysian property market in 2024 showed resilience amid global uncertainties. Economic growth accelerated, driven by higher household spending, stronger exports and infrastructure development. The residential market saw increased transaction volumes and values, especially in Johor, Kuala Lumpur and Selangor, supported by favourable policies such as housing guarantees, stamp duty exemptions and low interest rates. The industrial sector continued to thrive because of Malaysia’s role in regional trade, while the hospitality and retail sectors showed recovery through improved occupancy and stable rental levels. Sabah and Sarawak, benefitting from local policies and infrastructure investments, also recorded positive momentum, further diversifying the growth landscape.
The outlook for 2025 is cautiously optimistic, with gross domestic product (GDP) expected to grow between 4.5% and 5.5%. The residential market is likely to remain robust, driven by continued infrastructure projects and demand for affordable housing. The industrial sector is projected to sustain its growth, particularly in logistics and manufacturing hotspots such as Johor, Penang and the Klang Valley.
The office and retail segments may face challenges, however, owing to an oversupply of older stock and competition from new developments. Opportunities for adaptive reuse, particularly in repurposing ageing office spaces into data centres or co-living spaces, could address some of these challenges. Sarawak is expected to continue to benefit from strategic investment initiatives under the state-driven economic framework.
Investors can focus on industrial parks and logistics hubs in key regions such as Penang, Kedah and Johor, where demand remains high, owing to Malaysia’s growing role in global supply chains. The rise of suburban townships in the Klang Valley, offering affordable landed properties with modern amenities, provides attractive options for homebuyers. Properties near infrastructure developments such as the Johor Bahru-Singapore RTS Link and the Pan Borneo Highway hold strong potential for future capital appreciation. In East Malaysia, renewable energy projects and strategic government policies present opportunities for residential and industrial investments. It continues to attract interest because of stable political environments and ongoing development plans.
To expedite recovery, collaboration between federal and state governments is essential to streamline policies, incentives and approval processes. Expanding affordable housing programmes and fiscal incentives such as stamp duty exemptions would stimulate demand. Accelerating infrastructure developments such as the LRT Mutiara Line and the Penang International Airport expansion will enhance accessibility and encourage investment. Promoting sustainability by developing green-certified properties and repurposing underutilised assets, such as older office buildings, into alternative uses can help bridge gaps in supply-demand mismatches.
Landserve Sdn Bhd
Managing director
Chen King Hoaw
The Malaysian economy continued to grow in 2024, potentially reaching 5% or more in GDP growth. As a result, the Malaysian property market rebounded in 2024.
Recently, the Malaysian Institute of Economic Research indicated that the business outlook remained positive in 4Q2024. The Business Confidence Index reached 104.9 points, up from the 86.2 points recorded in 2Q2024. As such, we believe the Malaysian property market will continue to experience steady growth in 2025.
Under Budget 2025, the government has introduced tax incentives to attract FDIs in high-value activities. It will extend tax incentives to businesses exporting integrated circuits and offer incentives to multinational enterprises and their suppliers involved in joint ventures with local vendors.
Tax incentives will also be available to businesses in Smart Logistics Complexes to promote advanced logistics technologies, as well as to businesses in the manufacturing, services, agriculture and commodity sectors on automation-related capital expenditures. The Data Centre Planning Guidelines are also expected to drive growth. As such, industrial premises and development land in strategic locations in the Klang Valley, Johor and Penang are expected to remain in demand.
For homebuyers, TODs in the Klang Valley offer attractive options. Suburban and semi-urban areas will see stronger demand as people seek more affordable and spacious living. Distressed sales, available at steep discounts, are also an option.
Despite an optimistic national outlook, investors remain cautious due to risks from property oversupply and weak consumer sentiment. Government initiatives have mainly benefitted certain industries and property sub-sectors, with many yet to see tangible benefits. Rental yields are low amid oversupply, and capital appreciation is unlikely as new developments flood the market. To address these concerns, authorities should regulate and limit supply to tackle the oversupply and demand-supply mismatch.
Meanwhile, the government should reconsider the revised terms of the Malaysia My Second Home (MM2H) programme if it falls short in attracting foreign retirees and expatriates, to boost demand for high-end residential properties. As for the low and medium segments, affordability remains a concern. While the government supports first-time homebuyers, better coordination between government agencies and private developers is needed to prevent oversupply and demand/supply mismatch.
It is encouraging to note that the government is making efforts to attract tourists. With “Visit Malaysia Year 2026”, we hope hotels and businesses in the hospitality and retail sectors will see growth.
Above all, the government must initiate catalytic projects that benefit a broader range of sectors and consumers. With a balanced demand-supply dynamic and improved consumer sentiment, more investors are likely to return to the property market.
Laurelcap Sdn Bhd
Executive director
Stanley Toh
Overall, the domestic property market performed well in 2024, showing positive transaction volume and value trends and a reduction in the number of unsold units compared to 2023.
The property market was bolstered by various government initiatives and sustained favourable labour market conditions in 1H2024. Measures introduced in Budgets 2023 and 2024 played a significant role in stimulating activity in the property market.
In addition, interest rates have seen a gradual decrease globally and the strengthening of the ringgit has spurred confidence in the property market. Visa-free entry for Chinese travellers to Malaysia has also helped the tourism market and the hospitality industry.
2025 will continue the momentum of 2024. Industrial and residential sectors will remain dominant in the property sector, especially in the Klang Valley, Johor and Penang. In Penang, industrial properties in Batu Kawan will take the lead, as it is the hub for the semiconductor industry. Johor will continue to receive the same level of interest but may experience a slowdown in land acquisitions for data centres as interest reaches its saturation point. The Klang Valley will continue to receive interest in the residential, commercial and industrial sectors, as it provides employment opportunities, attracts migration from other states and investment destinations.
The property market in 2025 shows optimism due to strategic initiatives outlined in Budget 2025. Some key highlights are the RM10 billion allocation to provide government-backed financing for eligible first-time buyers that are purchasing homes up to RM500,000 under the Housing Credit Guarantee Scheme; tax deductions for residential properties priced below RM500,000 and RM750,000; RM500 million allocated for wakaf housing projects that emphasise eco-friendly developments and inclusivity; and a RM900 million allocation to build 48 People’s Residency Programmes and 14 Rumah Mesra Rakyat projects.
These initiatives suggest that the Malaysian property market in 2025 will focus on boosting affordability, improving infrastructure and fostering sustainable growth, making it a favourable time for buyers and investors alike.
Regarding opportunities, it is a good time to buy properties, as I foresee no interest rates rising soon. Projects with direct access to RTS in Johor Bahru will present an opportunity for good rental income, as staying in Johor and working in Singapore is an appealing value proposition. To expedite the property market’s recovery, the reintroduction of the Home Ownership Campaign, the lowering of the real property gains tax (RPGT) and stamp duty will be helpful.
Metro Homes Realty Bhd
Executive director
See Kok Loong
The domestic property market showed significant improvement in 2024 in selective areas and sectors. Johor Bahru saw a booming market, while Penang attracted considerable interest from buyers and investors. Government records indicated record highs, with emerging sectors such as data centres and semiconductors performing exceptionally well. The property overhang gradually reduced, signalling a healthier market. However, the high-end property segment remained largely dependent on foreign buyers. Overall, the market demonstrated a positive trajectory.
Looking ahead to 2025, the market is expected to maintain its upward trend. Johor Bahru is likely to continue its growth, though the anticipated supply of roughly 60,000 high-rise residential units warrants caution. The Klang Valley should improve further, driven by growing interest and the resumption of MM2H applications, expected by the second half of 2025. Foreign buyers, particularly from the Philippines, China, Cambodia, Taiwan and Singapore, target high-end properties priced between RM1 million and RM2 million. Local buyers remain focused on affordable homes in the RM300,000-to-RM500,000 range.
Malaysia’s Madani economy strategy has bolstered FDI inflows, diversifying the economy beyond palm oil and crude oil into sectors such as data centres, AI, semiconductors, EV manufacturing, and financial markets. Initiatives like the Special Financial Zone in Forest City, offering tax-free incentives for family offices, are attracting significant interest. Infrastructure developments, including the Penang LRT and proactive state government policies in Johor and Sarawak, foster growth alongside federal initiatives targeting Penang, Perak, Selangor and Negeri Sembilan. In addition, privatised projects leveraging China’s economic slowdown could elevate Malaysia’s infrastructure development to world-class standards.
Opportunities exist for local investors to seek stable yields of 4% to 5%, while foreign investors remain optimistic because of Malaysia’s political stability and strategic positioning. Hosting the Asean Summit in 2025 and “Visit Malaysia Year 2026” is expected to further boost confidence in the market. The proposed Kuala Lumpur–Singapore high-speed rail (HSR) could significantly enhance connectivity and narrow the rental gap between both cities. Kuala Lumpur’s office rental rates currently average RM7 psf per month, compared to S$10 to S$11 in Singapore. The HSR could catalyse office market growth over the next five to six years.
To expedite recovery, a focus on large-scale infrastructure projects such as the Circle Line MRT is essential. The RTS in Johor Bahru is a proven example of how infrastructure can rejuvenate markets and stimulate urban growth. Strategic planning, careful demand management and effective execution of key projects will be critical to sustaining recovery and driving long-term growth.
Nawawi Tie Leung Real Estate Consultants Sdn Bhd
Managing director
Eddy Wong
There were 192,484 transactions worth RM78.17 billion in 9M2024 versus 183,525 transactions worth RM73.14 billion in the previous corresponding period. This shows the market has continued on its recovery path since the pandemic in 2020. In fact, the total value of transactions has already surpassed the pre-pandemic transaction value achieved in 2019 by 48.1% (9M2019: RM52.78 billion).
For 2025, the residential property market is expected to remain cautiously optimistic, in line with the expected economic growth of between 4.5% and 5.5%. The re-election of Donald Trump as US president, however, will heighten uncertainties in the global markets. Interest rates are now expected to remain higher than initially projected, with the attendant strengthening of the US dollar.
Nevertheless, as property is traditionally seen as a hedge against inflation, there may be renewed interest in this asset class over the next couple of years if inflation remains elevated.
Johor Bahru is currently a property hotspot because of the Johor Bahru-Singapore RTS Link, which is expected to be completed by end-2026, and the establishment of the Johor-Singapore SEZ, which created a lot of excitement, stimulating the Johor property market. We expect the market in Johor Bahru to remain vibrant in 2025.
Generally, properties that have good access to amenities and are well connected, located in a great neighborhood and, if possible, close to a train station are always good choices for investors and homebuyers.
Some homebuyers may require additional assistance if they are currently renting, as they must cover their existing rental payments alongside their housing loan interest while awaiting the completion of their property, particularly if they purchase a property that is still under construction.
This is where the Developer Interest Bearing Scheme (DIBS) can come in useful, and it would be good if the government can consider reviving this scheme, if only for first-time homebuyers.
Finally, it would be good if the government could review and streamline the guidelines and policies for the acquisition of properties by foreign buyers and investors. While land matters fall under the purview of the state governments, it is only through clear and consistent policies throughout the country that Malaysia can attract foreign investments that will help reduce the property overhang and stimulate the property market.
Nawawi Tie Leung Property Consultants Sdn Bhd (Penang)
Executive director and regional head of research and consulting
Saleha Yusoff
Penang’s property market has demonstrated consistent recovery and growth, supported by the state’s economic performance. Property transactions have maintained positive momentum since 2022, although total transactions for 2024, based on 2Q data (8,243 units), are anticipated to slightly trail the 2023 figures of 19,031 units.
In the commercial sector, 2024 presented mixed trends. Office occupancy rates declined slightly, driven by the adoption of hybrid work arrangements. Retail properties are recovering but continue to face challenges from e-commerce competition, prompting malls to incorporate experiential and diversified offerings. Meanwhile, the industrial sector remains robust, supported by growing demand in Penang’s manufacturing and logistics industries.
The property market in Penang is expected to see a gradual improvement, driven by the completion of key infrastructure projects. However, challenges such as rising interest rates and inflation could impact affordability for buyers. Industrial and residential property demand in strategic locations like Batu Kawan and Kepala Batas is likely to stay strong, supported by industrial growth and enhanced logistics infrastructure.
Developers may scale back on new launches this year, focusing on clearing existing inventory. Major initiatives, including the Penang LRT, Penang Silicon Island (PSI) and expansion of the Penang International Airport (PIA), have bolstered investor confidence. These projects are poised to improve connectivity, boost tourism and enhance the state’s appeal to domestic and international investors. Areas near planned infrastructure like LRT stations or PSI, such as Bayan Lepas and Batu Maung, are likely to see growth in demand and property values.
The high-rise segment in Penang remains attractive. With the market correcting, buyers can find well-priced properties, especially for personal use or long-term investment. As for landed properties, residential units on the mainland are seen as strong options for capital investment, catering to families and those seeking larger spaces. We expect mixed-use projects to continue being attractive, offering convenience and lifestyle appeal.
Fast-tracking the completion of key initiatives like the LRT, PSI and PIA expansion will boost connectivity, improve logistics and attract domestic and international investors. Tourism initiatives should be boosted to stimulate demand for retail and hospitality-related properties.
Tax relief or subsidies should be offered to first-time homebuyers to stimulate demand in the mid-market segment. For upmarket developments, incentives can be introduced to encourage foreign buyers under programmes like MM2H. Approvals for projects that combine residential, retail and recreational spaces should be streamlined to enhance liveability and convenience in urban areas.
PA International Property Consultants Sdn Bhd
Group managing director
Subramaniam Arumugam
The property market witnessed a notable rebound in 2024, with positive developments across all key sectors.
The residential sector saw an increase in transaction volume, as well as a declining number of overhang units, signalling an improvement and heightened foreign interest in purchasing residential units, as well as renewed confidence among investors.
The industrial sector recorded strong performance led by the growth of managed industrial parks, rising demand for data centres and increased interest from the China market, all of which continue to attract investments.
The retail sector has seen improvements in the occupancy rates for shopping malls. This demonstrates recovery in the sector as it reflects a healthier consumer environment. Meanwhile, several real estate investment trusts (REITs) have expanded their portfolios through strategic acquisitions, signalling confidence in all sectors.
The momentum from 2024 is expected to sustain in 2025. The primary residential property market is anticipated to gain traction, supported by increased land acquisitions over the past two years.
The industrial property sector will continue to grow, particularly with government-backed initiatives emphasising environmental, social and governance (ESG) compliance. Managed industrial park developments are likely to expand. However, the developments of data centres may face scrutiny due to high infrastructure costs and limited contribution to local ecosystems, including the vendor network and job creation. A pivot towards managed industrial parks will yield more tangible benefits for the broader industrial sector.
Opportunities for investors and homebuyers exist in multiple regions and market segments, such as the Johor-Singapore SEZ, which offers lucrative incentives to catalyse growth in Johor’s property sector; the East Coast Rail Link (ECRL), which is expected to spur industrial growth around Kuantan Port and Gebeng, as new industrial developments have been planned near key stations; the construction of the LRT Mutiara Line in Penang, which presents significant investment opportunities along its corridors; the significant allocation under Budget 2025, which promises accelerated developments in Sabah and Sarawak, thereby creating new prospects for investments; and the introduction of tax relief on residential properties purchased between 2025 and 2027, which will provide substantial savings and stimulate sales.
A holistic approach is essential to accelerate the recovery of Malaysia’s property market. This could include encouraging significant FDI to generate employment and foster economic activities that will enhance household income and spending power.
Beside that, enabling easier access to financing through attractive loan terms and government-backed initiatives will increase purchasing power among investors and homebuyers. Lastly, continuous investments in infrastructure projects such as urban transit could stimulate demand in strategic areas.
PPC International Sdn Bhd
Managing director
Datuk Siders Sittampalam
The Malaysian property market in 2024 exhibited an adjustment phase, gradually moving towards a more stable and positive trajectory, influenced by evolving economic conditions and buyer preferences.
The residential property sector continued to dominate transactions, bolstered by demand in urban centres like Kuala Lumpur, Selangor, Johor and Penang. Demand for affordable homes, particularly those priced below RM500,000, was robust as they catered to first-time buyers and owner-occupiers.
Developers adopted a cautious approach, with new launches concentrating on smaller-scale phases. This strategy contributed to a slight improvement in the residential property overhang, reflecting healthier absorption rates. Landed homes are expected to remain a top preference for homebuyers, provided they are offered at an affordable and competitive price point while properties near public transport hubs attracted interest, particularly for rental purposes, given the growing demand from young professionals and working adults.
The industrial property market stood out as a resilient segment as it has been since the Covid-19 pandemic, driven by high-tech manufacturing, e-commerce and logistics. Strategic locations such as Johor and the Klang Valley gained traction due to initiatives like the Johor-Singapore SEZ and ongoing growth of high-quality industrial parks. Investors remained interested in niche products such as sustainable logistics spaces and integrated industrial developments, reinforcing this sector as a stable pillar of growth.
The outlook for 2025 remains cautiously optimistic. The affordable housing segment will likely continue to dominate, as first-time buyers benefit from government incentives and targeted financing programmes. Key opportunities include strategic infrastructure projects, such as the ECRL, which promises to rejuvenate previously overlooked areas and unlock new investment opportunities, as well as Johor’s international financial hub initiative in Forest City, which is anticipated to attract foreign investors and strengthen Malaysia’s position as a regional economic player.
While policy-based enablers such as adjustments to the MM2H programme could further stimulate the market to some extent, economic uncertainties and affordability concerns pose ongoing challenges.
To further enhance the moderate recovery, stakeholders must focus on enhancing policy frameworks, supporting affordable housing initiatives and leveraging strategic infrastructure projects to stimulate regional growth. With sustained demand in well-connected urban centres and industrial hotspots, Malaysia’s property market is poised for a gradual but stable recovery in the years ahead.
Rahim & Co International Property Consultants Sdn Bhd
Director of research
Sulaiman Saheh
The Malaysian property market sustained its growth momentum in 2024, continuing the trend from 2023. This was coupled with the country’s economic growth, driven by strong investment activities and improving exports, despite a decline in oil and gas output. These factors indicate encouraging signs for the property sector’s growth performance.
However, there are mixed market sentiments among buyers and they vary between locations, asset classes and pricing brackets. Concerns about living costs, purchasing power and global economic uncertainties persist, leading to some polarisation trends in the market.
Looking ahead to 2025, the overall market growth rate is expected to remain stable, progressing at a moderate pace with variations specific to different locations. There is continued optimism for owner-occupier-driven residential developments and niche tech-driven industrial properties that boast ESG-compliant features with strong infrastructure networks and proximity to labour pools and supply chains. On the commercial front, the office and retail markets, though still pressured by looming supply, have seen ‘flight-to-green’ and ‘flight-to-quality’ movements, creating a new narrative in the segment.
Despite the anticipated growth, addressing the gap between established upper-market areas and the more affordable mass-market segment remains crucial. This calls for accelerated inclusive urban development and planning strategies, as envisioned in the government’s policies. The affordable housing segment and price affordability, along with mechanisms to facilitate house purchases, will continue to be focal points, supported by various programmes and financial assistance targeting lower- and middle-income groups.
Further enhancements to existing policies and incentives are expected to sustain investor interest. Initiatives to attract foreign buyers, such as the MM2H programme and Malaysia Premium Visa Programme, should be welcomed without compromising the needs of the rakyat. High-impact public infrastructure projects, especially in public transport, and new incentives for special economic zones are expected to impact the market positively.
While confidence in the Malaysian property market is gradually improving, it is essential to address the unresolved challenges of the past. A continuous review of the concerted multi-stakeholder approach is still needed to nurture a more balanced and inclusive Malaysian property market that is vibrant, equitable and sustainable.
Olive Tree Property Consultants (Johor)
CEO
Samuel Tan
The property market fared well in 2024. In the southern region of Johor, Melaka and Negeri Sembilan, the property market in the first half of 2024 (1H2024) registered 48,885 transactions worth RM28.76 billion, up 5.3% and 31% y-o-y in terms of volume and value respectively. A similar upward trend was seen in transaction value during the period, with Johor increasing by 44.4% and Melaka by 28.3%, while Negeri Sembilan showed a slight decline of 10.7%.
The Johor property market is expected to be robust in 2025. The RTS project should be nearing completion and testing will begin. It is scheduled to be completed by December 2026 and operational by January 2027.
In January 2025, details of the Johor-Singapore SEZ will be announced. More details are expected from the Securities Commission Malaysia later in the year.
The Gemas-Johor Bahru electrified double-track rail is expected to be operational by April 2025. More news will emerge on the elevated automated rapid transit (ART), which will cover about 90% of the Johor Bahru district. Also, the increase in FDI, especially in the data centre and renewable energy sectors, will boost job creation and more downstream businesses, leading to higher disposable incomes that will spur the property market.
There will be opportunities for investors and homebuyers in the current climate, judging by the increased number of launches. They will be spoilt for choice. In larger cities, the selection will be mainly serviced apartments and condominiums. Good suburban areas will remain popular and landed residential properties can be found in these regions. One of the opportune areas to look into is TODs, where the rental and resale values are often better.
Although the property market is improving, there are still unsold units to be cleared. To spur the market, having the home ownership campaign is important. Stamp duty exemption for selected price ranges should continue. The Madani Deposit to assist those with shortfall in the initial capital is crucial. To encourage the resale market and later the purchase of new houses, the RPGT should be tweaked. After five years, individuals who gain from the sale of the property should not be taxed. Interest for loans should continue to be deducted on both the primary and secondary markets.
The local authorities should relook at some of the compliance costs which inevitably push up property prices. Among the areas to look into are the development charges and its mechanism, affordable housing policies and a more market-oriented bumiputera policy.
Savills Malaysia
Group managing director
Datuk Paul Khong
Last year got off to a good start with strong sentiments and promises. But 2024 did not end easily. Geopolitical tensions continued with two major disruptions — the Russia-Ukraine war and Israel-Palestine conflict — while the US-China rivalry went on. The new Trump administration is set to go live in January 2025, with some new headwinds ahead.
The Covid-19 pandemic was not kind to all and the property sector was not spared. Many developers have since rebounded, even though some are still licking their wounds.
Although we observed more bank distressed property auctions, Malaysia’s report card was good with the real estate sector seeing better performance in 9M2024 despite construction costs continuing to increase. The overnight policy rate (OPR) was stable at 3%, the EPF Account 3 was introduced and the rakyat had more money to spend. Petrol prices stayed down, but diesel prices skyrocketed, even though the Budi Madani cash subsidy was given out. The MM2H programme saw stronger traction and, as predicted earlier, the data centre and industrial property segments proceeded to take centre stage with many land deals being done.
In 2025, it will be a natural continuation with industrial properties and data centres in the lead.
Under Budget 2025, a 60% tax investment allowance will be given over a period of five years to boost smart logistics complexes under Industrial Revolution 4.0. But there were no goodies for the property sector, except for interest tax relief for properties priced below RM750,000. The property sector was left on the back burners again and all players are on their own to brave through 2025.
In terms of opportunities, we have observed active movements in the residential property market and transacted prices have already started to climb. With property auctions still flooding the local market, there are many bargains in the secondary market made available to buyers at different levels of offering.
In the primary market, developers are still pushing sales in many of their newer projects, offering good deals, ESG features plus lifestyle and concept living. Their offers are complemented by green financing packages as a total product.
We are confident of the property market in 2025 and some things to look out for are the HSR and Bandar Malaysia, which seems to have gained traction; the Johor-Singapore SEZ and the redesignation of Forest City; data centres that continue to take form; the industrial, logistics and manufacturing sectors that are all enjoying strong demand; and the retail and hospitality sectors are positive, even though the “revenge spending” has subsided. More foreign and local tourist spending is expected.
VPC Alliance (KL) Sdn Bhd
Director
James Wong
There are clear signs that the property market recovered in 2024, following the slump in 2020 due to the Covid-19 pandemic.
To start with, most housing developers’ launches to date have exceeded their sales target. Next, we see aggressive land acquisitions by developers. There are higher housing loan approvals. Up to October 2024, loans approved jumped to RM237.8 billion, or 6.9% higher y-o-y. Plus, the number of unsold residential properties was at its lowest in seven years, declining to 21,968 units in 3Q2024 from 22,642 units in 2Q2024.
With the strengthening economy, the property market is expected to fully recover and enjoy steady growth in 2025. Among the measures that will assist the recovery are the provision of incentives for first-time homebuyers, for developers to adopt modern construction methods such as the Industrialised Building System (IBS), and a further relaxation of the MM2H guidelines for foreigners’ home purchases.
The US-China trade tensions and the imposition of tariffs on China may benefit the Malaysian economy. Malaysia is expected to leverage its Asean chairmanship in 2025 to bring synergistic benefits between Asean countries and the other world trading blocs, which will spill over into the Malaysian property market.
In 2025, we expect further announcements on the MRT Circle Line, Penang LRT, MyDigital ID, 5G network and KL-Singapore HSR project, which will act as catalysts to spur the property market further. Southern Johor is experiencing a property market boom with its high concentration of data and cloud centres and the announcement of the Johor-Singapore SEZ.
Meanwhile, many factory owners are seeking land to build workers’ quarters with facilities as local authorities have served notice for them to vacate low-cost housing areas to comply with ESG requirements.
There are also opportunities to build student hostels, given that Malaysia is known as an education hub. Plus, let’s not forget about the ageing population. Senior housing and aged care can be the new economic drivers for the silver economy.
As the purchase of houses is beyond the means of average-income households and many between the ages of 25 and 35 are delaying house purchases, there are opportunities to build houses solely for rent or to introduce buy-and-rent schemes.
Zerin Properties
Founder and group CEO
Previndran Singhe
In 2024, Malaysia’s property market showed significant growth across multiple sectors, driven by a mix of domestic economic momentum, catalytic infrastructure projects and increasing international investments.
Data centres, particularly in Johor, were a key growth driver, driven by the region’s proximity to Singapore and cost advantages. The industrial property sector saw strong demand for high-tech industrial parks, warehouses and manufacturing facilities, supported by FDIs and the expansion of local businesses.
Demand for residential properties remained strong, with continued interest in landed homes, especially terraced houses in suburban areas with good connectivity like the Klang Valley, Johor and Seremban. Premium homes in established locations nationwide and mid-range high-rise residences near transit stations and employment/business centres experienced an uptick in demand.
Land acquisition activity surged as developers expanded their land bank for township and mixed-use projects, while investors sought land for data centre and industrial/warehouse developments.
The commercial subsector too experienced a positive momentum. The rebound in tourism and resurgence in visitor numbers restored investor confidence, boosting demand for hospitality assets in locations with high potential, while shopping malls with resilient tenant bases and strong yield potential, particularly in well-connected locations, garnered the interest of both local and international investors. Prime office spaces, especially green buildings, saw an uptick in demand.
This year will build on 2024’s progress, driven by strategic infrastructure projects and sustained foreign and domestic investments. Suburban markets are expected to gain prominence as infrastructure improves accessibility and affordability. The residential sector, particularly mid-range and premium properties, will likely sustain demand, supported by favourable economic policies and consumer confidence.
Active land acquisitions will continue, and the trend of mergers and acquisitions is likely to escalate. With the growing interest in industrial assets, particularly from REITs, more sale and leaseback transactions are expected.
Opportunities for investors include dated hotel properties in strategic locations, presenting opportunities for long-term yield generation; dated office buildings in prime locations, especially near LRT/MRT stations; and industrial assets with attractive yields on sale and leaseback arrangement.
For homebuyers, they can find opportunities in suburban neighbourhoods near transit nodes and emerging growth areas; landed homes, especially terraced houses with good connectivity and in a self-sufficient ecosystem such as Damansara Heights, Bangsar, Shah Alam, Klang, Sungai Buloh, Cheras, Seremban and Johor Bahru; and luxury properties in Kuala Lumpur (such as Mont’Kiara and Damansara Heights), Penang and Sabah.
Things that can expedite the property market recovery are clear and consistent policies that promote foreign ownership in selected growth areas, like Johor and the Klang Valley; collaboration between developers and the authorities to address affordability and property overhang issues with targeted incentives; and ensuring new affordable housing projects align with actual market demand, as well as being located in areas with strong growth potential to avoid unsustainable developments.
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