Overview of the Property Market in Malaysia
Overall, more than 389,000 transactions worth RM179.07 billion were recorded by Valuation and Property Services Department (JPPH), showing an increase of about 29.5% and 23.6% in volume and value, respectively, compared to last year’s record. The residential sector, the major contributor of the transactions, recorded some 243, 190 transactions worth RM94.28 billion (increased by 22.3% in volume and 22.6% in value y-o-y) whilst the commercial sector captured some 32, 809 transactions worth RM32.61 billion (increased by 46.3% in volume and 16.7% in value y-o-y).
Source: JPPH
Malaysia’s property prices remained more or less steady, as the positive impact of strong demand offset by massive oversupply in the market. According to JPPH, the Malaysian House Price Index (MHPI) stood at 208.4 points in 2022 (projected) with a low annual growth of 2.8%. Major states such as Selangor, Johor and Pulau Pinang saw mixed movements in its overall House Price Index up by 3.4%, 2.2% and 3.2%, respectively, while WP Kuala Lumpur was down marginally by 0.2%.
On overall market performance, the overhang situation of residential and service apartment has improved, down by 24.7% and 19.2% in volume and value respectively, and Johor retained the highest number and value of overhand in the country. Nonetheless, the overall performance of shopping complex and purpose-built office recorded a downward trend, with an occupancy rate of 75.4% and 78.5%, respectively.
Source: JPPH
The ROI in Property Market
Housing prices in Malaysia has been encouraging in the past 20 years, making it one of the preferred choices for investment due to the attractive return of investment (ROI). Notwithstanding, the ROI has been declining in the past years, no longer as attractive as before. From 2005-2025, the nationwide house prices have rose by 96.1% but the house prices only rose by an annual average of 5.2% from 2016-2018. The housing market has slowed in the recent years, due to government’s market cooling measures coupled with adverse impact from COVID-19 pandemic, the national house prices increased by just 2.3% from 2019-Q3 2022.
Is Property Still Worth Investing?
With a much lower ROI in property investment returns in the current market, is property still worth investing compared to other investment alternatives we have in the market nowadays i.e. private equity, cryptocurrency, unit trusts, to name a few? To answer to this million-dollar question, there are a few attributes we have to look at, including our financial goals, risk tolerance and market conditions.
Here are a few points to consider when comparing and deciding if property investment is still the right choice and worth putting money in:
The Takeaway
The worthiness of property as an investment compared to other alternatives relies heavily on each individual’s specific circumstances, risk tolerance, financial goals, and market conditions. It is advisable to carefully assess each investment option, conduct thorough research and consider seeking professional advice to make an informed decision that aligns with one’s objectives.