Property Market

House Price Index (HPI)

Preliminary data for Q2 2024 shows Malaysia's House Price Index (MHPI) at 218.7 points, reflecting modest annual growth of 0.9%—the lowest since the post-pandemic period and a decline from 4.3% in Q2 2023. All states reported slow growth between 0.1% and 4.6%, except Kuala Lumpur, which saw a decrease of -0.8%. Quarter-on-quarter, the MHPI dropped by -2.1%, reversing a 1.0% increase in Q1 2024. This downturn aligns with a weakening Consumer Sentiment Index, as consumer confidence and job prospects remain low, and inflation concerns deter long-term spending.

Regional house price trends revealed mixed performance. Kuala Lumpur led with the highest average price at RM780,728, followed by Selangor at RM535,390. Prices for terraced houses rose slightly, with annual growth at 1.1%, though the index fell -1.7% quarter-on-quarter. Major regions like Segamat in Johor saw notable annual growth of 8.1% due to higher transaction values, while Selangor experienced its first downturn, impacting overall market performance. High-rise unit prices fell overall, but some regions in Johor, Pulau Pinang, and Sabah recorded increases up to 7.4%.

The semi-detached and detached house segments showed moderate performance. Semi-detached houses grew 2.6% annually, with Melaka, Terengganu, and Perlis seeing quarterly gains, while Kuala Lumpur and Johor saw declines. Detached houses recorded only slight annual growth (0.5%) with quarterly declines, although some states like Sarawak and Sabah saw gains. Average detached house prices remained highest in Kuala Lumpur at RM2.5 million, followed by Pulau Pinang and Selangor. Overall, Malaysia's housing market reflects a cautious consumer outlook with regional variances in price growth across housing types.

Residential Property Transactions

In 2023, Malaysia recorded 250,586 residential property transactions totaling RM100.93 billion, showing a slight increase of 3.0% in volume and 7.1% in value compared to 2022. This growth was mainly driven by Johor, Kuala Lumpur, Pulau Pinang, Terengganu, Negeri Sembilan, and Kedah, with these states contributing around 48% of total transactions. Selangor led the market with 22% of transactions (55,035) and 30% of total value (RM30.26 billion), followed by Johor with 16.2% of volume and 18% of value.

Terraced houses remained the most in-demand, making up 43.6% of transactions, with high-rise units, vacant plots, and low-cost flats following. Affordable homes (priced at RM300,000 and below) dominated the market, accounting for 52.8% of transactions, while properties priced from RM300,001 to RM500,000 made up 24.9%. Higher price ranges, from RM500,001 to over RM1 million, comprised a smaller share.

Most transactions (78.5%) were in the secondary market, while primary market transactions (direct from developers) represented 21.5%. This trend highlights the strong focus on affordable housing and a preference for resale properties.

Overhang

What's "overhang"?: Starting January 1, 2003 “property overhang” has been defined as residential, commercial and industrial units that have been completed and issued with a Certificate of Completion and Compliance / Temporary Certificate of Fitness for Occupation but remained unsold for more than nine months after it was launched for sales on or after 1st January 1997.

The residential overhang in Malaysia showed improvement in Q4 2023, with 25,816 overhang units valued at RM17.68 billion—a reduction of 7.0% in volume and 4.0% in value compared to Q4 2022. Perak led with the highest overhang at 4,598 units (17.8% of the national total), followed by Johor, Kuala Lumpur, Selangor, and Pulau Pinang. In value, Kuala Lumpur and Selangor topped the list at RM3.63 billion each.

Condominiums/apartments made up the majority of overhang units at 60.5% (15,606 units), especially concentrated in areas like Johor Bahru, Gombak, and central Kuala Lumpur. Meanwhile, terraced houses in Perak, mostly in Hilir Perak and Manjung dominated the terraced houses overhang units formed the remaining 10.9% (2,806 units) of the national total.

Affordable homes (under RM300,000) comprised 29.4% of the overhang, up from 23.5% in 2022, while units priced between RM500,001 and RM1 million accounted for another 29.1%. Homes in the RM300,001 to RM500,000 range formed 25.3%, and those priced above RM1 million made up the remaining 16.2%. The unsold under-construction units also decreased by 11.3% to 51,132 units, while unsold units not yet constructed saw a sharper decline of 28.3%, totaling 7,926 units.