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Mass market launches and rental markets in key urban areas are expected to see strong demand in 2024.
By Khalil Adis
By Khalil Adis
Kuala Lumpur city skyline. Photo courtesy of Pok Rie via Pexels.
In 2023, the Malaysian property market saw significant trends and developments that have set the stage for the outlook and predictions for 2024.
The huge mismatch between what Malaysians can afford to buy versus what developers are building has become increasingly apparent, leading to a shift in consumer behaviour towards renting instead of buying.
With affordable housing in short supply, especially in highly urbanised areas like Kuala Lumpur, Johor, Penang, and Selangor, demand for rental properties surged in 2023.
This increased demand for rental properties has led to a notable shift in the market dynamics, with renters seeking affordable and well-maintained units in desirable locations.
In response to the changing market dynamics, developers in Johor, Selangor and Kuala Lumpur focused on catering to the mass market segment by launching new residential projects priced below RM300,000.
These mass-market homes aimed to address the growing demand for affordable housing options among Malaysian buyers.
On the other hand, the overhang market in Johor, Selangor, Kuala Lumpur and Penang was dominated by residential properties priced between RM500,000 to RM1 million.
This suggests that there is a surplus of mid-range properties in these areas, which may take longer to sell due to affordability constraints and oversupply issues.
Johor
The huge mismatch between what Malaysians can afford to buy versus what developers are building has become increasingly apparent, leading to a shift in consumer behaviour towards renting instead of buying.
With affordable housing in short supply, especially in highly urbanised areas like Kuala Lumpur, Johor, Penang, and Selangor, demand for rental properties surged in 2023.
This increased demand for rental properties has led to a notable shift in the market dynamics, with renters seeking affordable and well-maintained units in desirable locations.
In response to the changing market dynamics, developers in Johor, Selangor and Kuala Lumpur focused on catering to the mass market segment by launching new residential projects priced below RM300,000.
These mass-market homes aimed to address the growing demand for affordable housing options among Malaysian buyers.
On the other hand, the overhang market in Johor, Selangor, Kuala Lumpur and Penang was dominated by residential properties priced between RM500,000 to RM1 million.
This suggests that there is a surplus of mid-range properties in these areas, which may take longer to sell due to affordability constraints and oversupply issues.
Johor
Johor Bahru as seen from the Straits of Johor. Photo courtesy of Alix Lee via Pexels.
In Johor, the property market is expected to continue facing challenges in 2024, particularly in areas with a high concentration of oversupply.
The mass market segment, which saw an abundance of new launches priced below RM300,000 in 2023, may experience slower growth as developers adjust to the changing demand landscape.
However, growth areas such as within Iskandar Malaysia may still present opportunities for investors, especially in well-planned integrated developments that cater to both residential and commercial needs.
Selangor
The mass market segment, which saw an abundance of new launches priced below RM300,000 in 2023, may experience slower growth as developers adjust to the changing demand landscape.
However, growth areas such as within Iskandar Malaysia may still present opportunities for investors, especially in well-planned integrated developments that cater to both residential and commercial needs.
Selangor
Petaling Jaya in Selangor. Photo courtesy of Deva Darshan via Pexels.
Selangor, being one of Malaysia's most populous states and a major economic hub, is expected to maintain its position as a key player in the property market.
While the demand for affordable housing is likely to remain strong, developers may shift their focus towards more sustainable and inclusive development strategies.
Growth areas such as Cyberjaya, Shah Alam and Subang Jaya are expected to continue attracting interest from both buyers and developers, with a focus on mixed-use developments and transit-oriented projects.
Kuala Lumpur
While the demand for affordable housing is likely to remain strong, developers may shift their focus towards more sustainable and inclusive development strategies.
Growth areas such as Cyberjaya, Shah Alam and Subang Jaya are expected to continue attracting interest from both buyers and developers, with a focus on mixed-use developments and transit-oriented projects.
Kuala Lumpur
Merdeka 118 tower in Kuala Lumpur. Photo courtesy of Jackson Tee via Pexels.
In Kuala Lumpur, the property market is expected to see continued interest in high-density urban living, driven by factors such as urbanisation and lifestyle preferences.
However, affordability concerns may lead to a greater emphasis on the development of affordable housing and innovative financing solutions.
Growth areas within the city centre and its surrounding suburbs, such as KL Sentral, Bangsar and Mont Kiara, are expected to remain attractive to both investors and homebuyers.
Penang
However, affordability concerns may lead to a greater emphasis on the development of affordable housing and innovative financing solutions.
Growth areas within the city centre and its surrounding suburbs, such as KL Sentral, Bangsar and Mont Kiara, are expected to remain attractive to both investors and homebuyers.
Penang
George Town, Penang. Photo: Khalil Adis Consultancy.
Penang, known for its rich cultural heritage and vibrant lifestyle, is expected to continue experiencing steady demand for residential properties, particularly in sought-after areas such as George Town, Bayan Lepas, and Tanjung Tokong.
However, affordability concerns and oversupply in certain segments may lead to a slowdown in the high-end property market.
Developers may focus on niche markets and alternative housing options to cater to changing consumer preferences.
The growth areas to watch out for on the main island are mainly along the proposed Bayan Lepas LRT.
Growth areas
However, affordability concerns and oversupply in certain segments may lead to a slowdown in the high-end property market.
Developers may focus on niche markets and alternative housing options to cater to changing consumer preferences.
The growth areas to watch out for on the main island are mainly along the proposed Bayan Lepas LRT.
Growth areas
The growth areas in Malaysia are mainly those located near high-impact projects like MRT and transit-oriented developments. Photo: Khalil Adis Consultancy.
In addition to established urban centres, growth areas such as transit-oriented developments, industrial zones, and emerging satellite towns are expected to attract interest from investors and homebuyers alike.
These areas offer opportunities for sustainable development and investment diversification, while also addressing issues such as urban sprawl and congestion.
Johor
These areas offer opportunities for sustainable development and investment diversification, while also addressing issues such as urban sprawl and congestion.
Johor
Bukit Chagar will be located next to the Sultan Iskandar CIQ. Photo: Khalil Adis Consultancy.
In Johor, the growth areas are primarily located in Iskandar Malaysia, especially in well-planned integrated developments that cater to both residential and commercial needs.
One such area is Bukit Chagar which will serve as an interchange station Johor Bahru – Singapore Rapid Transit System (RTS) Link.
Slated to commence passenger service by end-2026, the RTS Link can serve up to 10,000 commuters during peak periods, for every hour and in each direction.
The RTS Link will also have a spillover impact in the nearby JB Sentral area which is home to malls, hotels and the upcoming Ibrahim International District.
Selangor
One such area is Bukit Chagar which will serve as an interchange station Johor Bahru – Singapore Rapid Transit System (RTS) Link.
Slated to commence passenger service by end-2026, the RTS Link can serve up to 10,000 commuters during peak periods, for every hour and in each direction.
The RTS Link will also have a spillover impact in the nearby JB Sentral area which is home to malls, hotels and the upcoming Ibrahim International District.
Selangor
Growth areas in Southern Kuala Lumpur. Infographics: Khalil Adis Consultancy.
In Selangor, the growth areas are in Southern Kuala Lumpur, particularly, those near high-impact projects and transit-oriented developments along the Putrajaya Line, Kuala Lumpur–Singapore high-speed rail (HSR) and the Malaysia Vision Valley.
Nilai and Seremban are areas to watch out for.
Nilai is poised for further growth as it is located within the Malaysia Vision Valley. Covering Nilai to Port Dickson, it will have a proposed area of 108,000 hectares.
The upcoming industries include high-tech, logistics, education, health, tourism and sports.
The Malaysia Vision Valley is expected to create some 1.35 million jobs by 2035 and investments of more than RM417.6 billion by 2045.
To support the Malaysia Vision Valley, the Seremban HSR station will be situated in Nilai within the Labu and Kirby estates.
Major townships in the vicinity include Bandar Enstek, Bandar Ainsdale Property and S2 Height.
Seremban will be an interchange station for the Seremban Komuter Line and KTM Electric Train Service.
Kuala Lumpur
Nilai and Seremban are areas to watch out for.
Nilai is poised for further growth as it is located within the Malaysia Vision Valley. Covering Nilai to Port Dickson, it will have a proposed area of 108,000 hectares.
The upcoming industries include high-tech, logistics, education, health, tourism and sports.
The Malaysia Vision Valley is expected to create some 1.35 million jobs by 2035 and investments of more than RM417.6 billion by 2045.
To support the Malaysia Vision Valley, the Seremban HSR station will be situated in Nilai within the Labu and Kirby estates.
Major townships in the vicinity include Bandar Enstek, Bandar Ainsdale Property and S2 Height.
Seremban will be an interchange station for the Seremban Komuter Line and KTM Electric Train Service.
Kuala Lumpur
Bangsar Shopping Centre. Bangsar is one of the growth areas once the Circle Line is completed. Photo: Khalil Adis Consultancy.
The growth areas in KL are along the MRT3 Circle Line, namely, Bukit Kiara Selatan, Bukit Kiara, Sri Hartamasa, Mont Kiara, Bukit Segambut, Taman Sri Sinar, Dutamas, Jalan Kuching, Titiwangsa, Kampung Puah, Jalan Langkawi, Danau Kota, Setapak, Rejang, Setiawangsa, AU2, Taman Hillview, Kuchai, Jalan Klang Lama, Pantai Dalam, Pantai Permai and Universiti.
Titiwangsa MRT station which will serve as an interchange station with the Ampang and Sri Petaling Line, KL Monorail Line and Putrajaya Line.
As the Circle Line is still under construction, this presents a good opportunity for genuine homebuyers to start looking in and around the station.
Homes in the secondary market will be the most ideal as they are priced cheaper than new launches.
Penang
Titiwangsa MRT station which will serve as an interchange station with the Ampang and Sri Petaling Line, KL Monorail Line and Putrajaya Line.
As the Circle Line is still under construction, this presents a good opportunity for genuine homebuyers to start looking in and around the station.
Homes in the secondary market will be the most ideal as they are priced cheaper than new launches.
Penang
Screen grab of the Bayan Lepas LRT line. Source: http://pgmasterplan.penang.gov.my
The growth areas in Penang remain unchanged in Batu Kawan and some parts of Seberang Perai.
Since the opening of the Second Penang Bridge, Batu Kawan has seen rapid developments from several renowned developers such as EcoWorld and Tropicana as well as the opening of IKEA.
While connectivity remains patchy at Batu Kawan, there is a planned Bus Rapid Transit (BRT) system for Batu Kawan as part of the Penang Transport Master Plan.
In Seberang Perai, the growth areas will be along the planned Raja Uda-Bukit Mertajam Line to connect the northwestern region to the southeastern region.
For those who can afford to buy a property on the main island, areas along the Bayan Lepas LRT line will be the new growth corridor.
What’s in store for buyers
Since the opening of the Second Penang Bridge, Batu Kawan has seen rapid developments from several renowned developers such as EcoWorld and Tropicana as well as the opening of IKEA.
While connectivity remains patchy at Batu Kawan, there is a planned Bus Rapid Transit (BRT) system for Batu Kawan as part of the Penang Transport Master Plan.
In Seberang Perai, the growth areas will be along the planned Raja Uda-Bukit Mertajam Line to connect the northwestern region to the southeastern region.
For those who can afford to buy a property on the main island, areas along the Bayan Lepas LRT line will be the new growth corridor.
What’s in store for buyers
Landed homes are popular among Malaysians. Photo: Khalil Adis Consultancy.
Buyers in 2024 can expect a more diverse range of options in the property market, with an emphasis on affordability, sustainability, and lifestyle amenities.
Innovative financing schemes and incentives may also be introduced to encourage homeownership and address affordability concerns.
What’s in store for sellers
Innovative financing schemes and incentives may also be introduced to encourage homeownership and address affordability concerns.
What’s in store for sellers
Aerial view of Medini and Iskandar Puteri. Photo: Khalil Adis Consultancy.
Sellers may need to adjust their expectations and pricing strategies to align with changing market conditions.
Those with properties in oversupplied segments may need to offer incentives or value-added services to attract buyers, while those in high-demand areas may continue to command premium prices.
What’s in store for tenants
Those with properties in oversupplied segments may need to offer incentives or value-added services to attract buyers, while those in high-demand areas may continue to command premium prices.
What’s in store for tenants
A mix of high-end and low cost residential homes in Kuala Lumpur. Photo: Khalil Adis Consultancy.
Tenants can expect a more competitive rental market in 2024, particularly in urban areas where demand for rental properties is high.
Affordability remains a key concern for tenants, and they may seek out properties with flexible lease terms and inclusive amenities.
What’s in store for landlords
Affordability remains a key concern for tenants, and they may seek out properties with flexible lease terms and inclusive amenities.
What’s in store for landlords
Bird's eye view of Kuala Lumpur. Photo: Khalil Adis Consultancy.
Landlords may need to be more proactive in managing their rental properties, offering competitive rental rates and investing in property maintenance and upgrades to attract and retain tenants.
Those with properties in growth areas may continue to enjoy strong rental yields and capital appreciation.
Conclusion
Those with properties in growth areas may continue to enjoy strong rental yields and capital appreciation.
Conclusion
Brickfields, Kuala Lumpur. Photo: Khalil Adis Consultancy.
Overall, the Malaysian property market is expected to continue evolving in 2024, with a focus on affordability, sustainability, and innovation.
While challenges such as oversupply and affordability concerns may persist, there are also opportunities for growth and investment in emerging sectors and growth areas.
By staying informed and adaptable, stakeholders in the property market can navigate these changes and capitalise on new opportunities in the year ahead.
While challenges such as oversupply and affordability concerns may persist, there are also opportunities for growth and investment in emerging sectors and growth areas.
By staying informed and adaptable, stakeholders in the property market can navigate these changes and capitalise on new opportunities in the year ahead.