This article first appeared in City & Country, The Edge Malaysia Weekly on December 8, 2025 - December 14, 2025

The Klang Valley residential property market continued to stabilise in 3Q2025, with clearer opportunities concentrated in affordability-driven, transit-oriented and well-located mixed-use developments, according to Savills Malaysia director of research and consultancy Fong Kean Hwa.

Presenting The Edge Malaysia | Savills Klang Valley Residential Property Monitor 3Q2025, Fong says the residential sector is expected to gain momentum through the rest of the second half of 2025, which will partly offset the softer performance seen earlier in the year.

“A pickup in project launches is anticipated [in 2H2025] as sentiment gradually improves, supported by government measures such as the BUDI95 initiative, July’s OPR (overnight policy rate) cut to 2.75%, and the fiscal incentives outlined in Budget 2026. These initiatives are likely to support consumption and allow developers to phase their launches more strategically,” he notes.

In addition, Bank Negara Malaysia’s reduction of the Statutory Reserve Requirement (SRR) to 1% in May 2025 continued to bolster market liquidity, with an estimated RM19 billion entering the banking system in August 2025. This helped strengthen mortgage financing capacity and sustained overall housing demand.

Interestingly, Bank Negara’s data also showed that total loan approvals for the first eight months of 2025 declined marginally by 2% year on year to RM129.2 billion, with the approval ratio stabilising at 41%. Notably, middle-income households (M40) continued to record the highest rejection rates, particularly for homes priced between RM300,000 and RM500,000.

Fong believes this trend is probably the result of multiple factors, including affordability constraints within the target buyer segment, location-driven price pressures in the suburban markets of Greater Kuala Lumpur, and the tightening of household financial buffers amid rising living costs. Collectively, these elements have made loan approval increasingly challenging for the affordable range segment.

Fong foresees, however, an increase of new launches due to a favourable business environment and improving market sentiment, although most developers remain cautious about elevated construction costs and compressed margins persisted, mirroring the pressures highlighted in the previous quarters.

Having said that, major key industry players continued to expand their land bank, reflecting ongoing confidence in long-term industry prospects, particularly township developments and integrated, mixed-use developments rather than purely residential schemes.

For example, Mah Sing Group Bhd (KL:MAHSING) announced the acquisition of an additional 275 acres of freehold land in Semenyih for RM273 million to further enhance its existing township there with a combination of residential and commercial components.

Similarly, Gamuda Land acquired 336 acres in Kuala Langat to extend its Gamuda Cove township, which aligns with its plan to develop a mixed-use township development integrating residential, commercial and lifestyle components.

In 3Q2025, the serviced apartment and branded residences product segment performed well.

“Managed residential offerings, including serviced apartments and branded residences that combine home-style living with hotel-like services, continue to gain traction. This development format remains appealing to investors seeking professionally managed units with stable rental prospects, especially in established locations within the KL Golden Triangle,” Fong says.

He adds that the higher-end segment in established prime locations also showed a gradual improvement in absorption rate, while mixed-use concepts and green tech living continue to be well received.

“[Projects with] sustainability features, such as solar-ready infrastructure, smart AI and energy-efficient building systems, as well as broader green-tech township elements gained further traction, especially among tech-savvy younger and environmentally conscious buyers. While adoption remains gradual, these features are increasingly viewed as value differentiators and are expected to gain momentum as regulatory and consumer expectations evolve,” he notes.

According to Savills’ data, demand for properties in prime locations remains strong, with Bangsar and Mont’Kiara recording healthier price and rental growth compared to last year. In 3Q2025, average transaction prices rose 0.7%, 2.1% and 6.6% y-o-y in KLCC, Bangsar and Mont’Kiara, reaching RM1.46 million, RM992,000 and RM840,000 respectively for two-bedroom, high-rise units.

Rental rates grew across KLCC, Bangsar and Mont’Kiara, increasing 5%, 8.1% and 4.8% y-o-y respectively. Among these, Mont’Kiara continues to offer comparatively stronger rental yields.

“Across Greater KL, rental rates generally edged higher in 3Q2025 as landlords sought to adjust rents to reflect rising costs from property maintenance, service charges and taxes,” says Fong. “The upcoming LRT3 line [which links Damansara Uptown, Subang, Shah Alam and Klang] has also contributed to slightly firmer sentiment in several adjoining residential corridors, with some neighbourhoods seeing steadier enquiries and mild rent adjustments.

“The improved connectivity of the LRT3 line is expected to support demand gradually once operations commence, especially in areas within comfortable walking distance of key stations.”

He adds that Kuala Lumpur remains a key development hotspot among other areas in Greater KL, with real estate activity continuing to thrive.

Notable developments in the Kuala Lumpur city centre in 3Q2025 include a high-rise, mixed-use development with an estimated gross development value (GDV) of RM333 million in Bangsar South jointly developed by YNH Property Bhd (KL:YNHPROP) and Genland Sdn Bhd; the RM3 billion Armani Hallson KLCC development in Jalan Ampang by Armani Group; Conlay Signature Suites in KL jointly developed by Eastern & Oriental Bhd (KL:E&O) and Mitsui Fudosan; and Mah Sing’s acquisition of the Corus KLCC Hotel site in the KLCC area for RM260 million, for a premium serviced apartment project with a GDV of RM1.28 billion.

Meanwhile, the high-rise residential market in Selangor remains resilient, with steady growth in prices and rentals. Areas such as Bandar Sunway, Subang Jaya and Shah Alam experienced moderate increases, supporting stable rental yields, according to Fong.

He says: “The average transaction price in Bandar Sunway climbed 2.4% y-o-y to RM880,000 in 3Q2025. Concurrently, monthly rental rates remained unchanged at RM3,600, delivering a rental yield of 4.9%. Subang Jaya’s average transaction price remained at RM756,000, with monthly rents rising to RM3,000 y-o-y, yielding a 4.8% return quarterly.”

Petaling Jaya recorded a drop of 0.2% y-o-y in prices, with transaction values averaging RM1.06 million. Meanwhile, monthly rental rates rose 4.3% y-o-y to RM3,600, resulting in an annual yield of 4.1%. In Shah Alam, prices stayed at RM761,000, while monthly rents increased to RM2,750, from RM2,550, delivering a 4.3% rental yield.

Key property activities recorded in Selangor during the quarter include Selangor Dredging Bhd’s (KL:SDRED) launch of homes in a mid-rise residential development called DaMai in Taman Melawati; and OSK Holdings Bhd’s (KL:OSK) purchase of a 3.312-acre parcel in Subang Jaya for RM44.34 million to develop a serviced apartment project with a GDV of RM427 million.

In 3Q2025, the 2-storey terraced house market in Kuala Lumpur and Selangor showed varied performance, with price increases observed in areas such as Putra Heights and Bandar Bukit Raja, according to Fong.

He highlights that key areas in KL such as TTDI, OUG, Lucky Garden in Bangsar as well as Taman Midah in Cheras showed positive price appreciation trends in 3Q2025, with TTDI recording the highest growth.

According to Savills’ data, transaction prices in TTDI rose 5.1% y-o-y in 3Q2025, reaching RM1.65 million; and monthly rental rates rose 6.5% y-o-y to RM3,300, yielding a quarterly return of 2.4%.

In Lucky Garden, prices rose 2.4% y-o-y to RM1.7 million, and monthly rental rates increased to RM3,300, offering a rental yield of 2.3%.

In Taman Midah, prices increased to RM800,000, with monthly rental rates rising 8.6% y-o-y to RM1,900, yielding a 2.9% return.

OUG prices remained stable at RM890,000, and rental rates stayed at RM2,100 per month, resulting in a rental yield of 2.8%.

In Selangor, prices of 2-storey terraced homes in SS2, Petaling Jaya, rose 6.9% y-o-y to RM1.08 million, while rental rates remained unchanged at RM2,150 per month, yielding a return of 2.4%.

In Bandar Utama, 2-storey terraced homes saw a steady price increase of 11.1% y-o-y to RM1.4 million, while rental rates rose to RM2,800 per month, translating into a 2.4% rental yield.

The Puchong market demonstrated stable, yet positive, sentiment, with Bandar Kinrara and Bandar Bukit Puchong recording a 9.6% and 10.3% y-o-y price growth to RM800,000 and RM750,000 respectively. Rents increased 8.4% and 9.1% y-o-y, yielding 3.3% and 2.9% respectively.

In Shah Alam, the 2-storey terraced house market showed varied performances in price, with Bandar Setia Alam stable at RM715,000; Kota Kemuning rising 0.3% to RM720,000; Bandar Bukit Raja up marginally to RM650,000; and Bandar Bukit Tinggi up 7.7% to RM700,000. All areas recorded a y-o-y increased in rental rates, with yields of 2.9% to 3.1%.

In Putra Heights Fong says, 2-storey terraced house prices remained at roughly RM725,000, while monthly rentals rose 8.4% y-o-y to RM1,800, translating into a gross rental yield of 3% per year.

“Although rental demand appears stable for now, recovery efforts are still ongoing, following the gas pipe leak incident, and the longer-term implications for property values and buyer sentiment in the affected areas will need further observation,” he says.

Meanwhile, semi-detached homes in Selangor showed an overall positive trend in 3Q2025, with y-o-y price increases recorded in almost all areas monitored, including SS3, Petaling Jaya (up 6.1% to RM1.65 million, rental yield of 7.4%); Bandar Kinrara (up 7.1% to RM2.1 million, rental yield 2.6%); Tropicana Aman (up 1.6% to RM1.6 million, rental yield 2.8%); Glenmarie Cove (up 8.3% to RM1.11 million, rental yield 3.9%); Bandar Parkland in Klang (up 4.7% to RM1.35 million, rental yield 2.5%); Evergreen Garden Residence in Cyberjaya (up 3.5% to RM1.33 million, rental yield 3.4%); Taman Equine in Seri Kembangan (up 7.4% to RM1.6 million, rental yield 2.5%); and Setia Ecohill in Semenyih (up 3.6% to RM 1 million, rental yield 2.4%).

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