Amanda Siddharta
Research expert covering Malaysia
Real estate in Malaysia - statistics & facts
Whether it’s a humble abode in a low-cost housing area or a luxury mansion on a scenic hill, the majority of Malaysians are intent on owning a property. The real estate market in the country saw a challenging time during the two-year COVID-19 pandemic, especially with the lockdown measures and an unprecedented disruption to most business activities. Nevertheless, the industry has been recovering since 2022, as shown by a significant increase in the gross domestic product (GDP) from the real estate sector in Malaysia in the past two years.
The value of approved loans for residential properties in Malaysia experienced an increase of more than five billion Malaysian ringgit in 2023. Meanwhile, the value of non-residential loans increased by around 14.5 percent within the same period. Nevertheless, the continuously increasing price of residential properties is the main hurdle for the average Malaysians to be able to afford a house. In 2023, the average price of a house was around 467,000 Malaysian ringgit, an increase of more than 14,500 Malaysian ringgit compared to last year. The current government, under Prime Minister Anwar Ibrahim, prioritized homeownership in the 2025 National Budget, with 900 million Malaysian ringgit allocated to affordable housing schemes and tax reliefs for lower-income group and first-time homeowners.
Despite the demand for physical retail spaces, the rise of e-commerce in Malaysia and consumers’ increased preference to buy things online mean that businesses can also operate solely online. This could lead to an oversupply of commercial properties. However, the market value of commercial real estate in Malaysia has been experiencing an increase in the past few years.
OPR remains at three percent
The overnight policy rate (OPR) is the benchmark rate set by Bank Negara Malaysia as a tool to manage the current economic situation. The OPR will affect the interest rate of long-term loans, including housing or commercial loans. As inflation rate continued to ease compared to last year, the Malaysian government decided to keep the OPR at three percent. The last OPR increase of 0.25 percent occurred in May 2023. The steady OPR will likely ensure the real estate market remains robust coming into 2025, as consumers will be able to apply for loans without a higher mortgage.The value of approved loans for residential properties in Malaysia experienced an increase of more than five billion Malaysian ringgit in 2023. Meanwhile, the value of non-residential loans increased by around 14.5 percent within the same period. Nevertheless, the continuously increasing price of residential properties is the main hurdle for the average Malaysians to be able to afford a house. In 2023, the average price of a house was around 467,000 Malaysian ringgit, an increase of more than 14,500 Malaysian ringgit compared to last year. The current government, under Prime Minister Anwar Ibrahim, prioritized homeownership in the 2025 National Budget, with 900 million Malaysian ringgit allocated to affordable housing schemes and tax reliefs for lower-income group and first-time homeowners.
More supply than demand in commercial sector
Although the residential sector makes up the majority of the real estate industry in Malaysia, the commercial sector is just as important. In 2023, several new shopping malls opened their doors to consumers, including lavish The Exchange TRX and Pavilion Damansara Heights in the capital, Kuala Lumpur. This will add more area to the existing shopping complex space, especially in big cities.Despite the demand for physical retail spaces, the rise of e-commerce in Malaysia and consumers’ increased preference to buy things online mean that businesses can also operate solely online. This could lead to an oversupply of commercial properties. However, the market value of commercial real estate in Malaysia has been experiencing an increase in the past few years.
