Malaysia’s Property Market Remains Largely Local
Despite ongoing conversations about foreign investment in Malaysian real estate, newly released government data confirms that the overwhelming majority of property transactions are still driven by locals. According to the Housing and Local Government Ministry, only 1,459 property purchases by foreigners were recorded last year—accounting for just 0.56% of total transactions nationwide.
This reinforces the notion that Malaysia’s property market, including the kl property sector, remains fundamentally domestic-led, with demand driven largely by citizens either upgrading, investing, or securing their first homes.
Foreign Ownership: Small Share, High Value
Although foreign purchases made up less than 1% of the total transaction count, they contributed RM3.05 billion in value—showcasing the tendency for foreign buyers to lean towards higher-end properties. These transactions form part of a larger RM103.9 billion worth of deals involving 259,058 properties acquired by Malaysian citizens in the same year.
This trend is in line with past patterns, where foreign buyers tend to target luxury condominiums, commercial suites, or city-centre units in locations such as Kuala Lumpur City Centre (KLCC), Mont Kiara, or Iskandar Puteri in Johor.
For property developers, this is a crucial distinction: while foreigners make up a small portion of overall transactions, they still play a role in supporting the premium property segment, particularly in urban zones with international appeal.
Housing for All: Policy Still Focused on Citizens
In a written parliamentary reply, Housing and Local Government Minister Nga Kor Ming emphasized that the government’s top priority is ensuring that Malaysians have access to housing, whether purchased or rented. This aligns with the objectives of the National Housing Policy (2018–2025), which promotes “housing as a place to live,” or shelter for all, rather than as a speculative asset.
This direction is evident in initiatives such as the People’s Housing Programme (PPR), various affordable housing schemes, and the Housing Credit Guarantee Scheme (SJKP), which has already approved RM20.9 billion in guaranteed home loans based on 88,507 applications.
Such measures aim to close the homeownership gap and support vulnerable groups who may not qualify for traditional mortgages. For the kl property market, these schemes continue to underpin demand for affordable and mid-range homes across the Klang Valley.
Homeownership Rates and Second-Property Data
According to the Basic Amenities Survey 2022 by the Department of Statistics, 76.5% of Malaysians are homeowners—a relatively high figure by global standards. However, the survey did not specify how many Malaysians own more than two properties, a question raised in Parliament by MP Ismail Muttalib.
The absence of this detail highlights a gap in publicly available data on multi-property ownership, which could help policymakers better understand investor behaviours and formulate targeted regulations for speculative activity, especially in oversupplied urban markets.
Rent-to-Own Expansion Under Consideration
In response to shifting buyer sentiment and economic uncertainty, the government is also considering expanding the rent-to-own (RTO) scheme under the PPR programme. This would offer low- to middle-income families an alternative pathway to homeownership, enabling them to build equity while renting, with the option to purchase after a fixed period.
Such a model may be particularly useful in high-demand urban areas like Kuala Lumpur, where property prices often exceed what younger or lower-income households can afford upfront. If implemented widely, an expanded RTO scheme could act as both a housing security net and market stabiliser—supporting occupancy in PPR units while allowing families to transition into ownership gradually.
Why Foreign Ownership Remains a Hot Topic
The conversation around foreign buyers often ignites strong public sentiment. Some fear that foreign ownership drives up prices and reduces availability for locals, while others argue it injects capital and supports high-end development.
However, based on actual transaction data, it’s clear that foreign ownership remains limited in scope and largely concentrated in specific property segments. The kl property market, for instance, sees most foreign interest in luxury apartments and branded residences—units already priced beyond the reach of most local buyers.
Rather than displacing locals, these transactions often help developers move high-end stock that may otherwise sit unsold. Still, it’s important that affordable housing and ownership access remain protected through policy, balanced supply planning, and strong regulatory oversight.
Final Thoughts: A Locally Anchored Market with Global Touchpoints
Malaysia’s housing market continues to reflect strong domestic fundamentals, with foreign buyers playing a minor but noticeable role in shaping the upper end of the market. Government focus remains fixed on housing accessibility, equity, and sustainability—goals that resonate with the aspirations of ordinary Malaysians.
As policies evolve to support a more inclusive and stable housing ecosystem—via guaranteed loan schemes, RTO options, and fair regulatory frameworks—homebuyers and investors alike can navigate the kl property landscape with greater confidence.
For developers and industry players, the message is clear: while international investors may add sparkle to the premium tier, local buyers are the backbone of Malaysia’s real estate market. Prioritising their needs will remain key to long-term growth and resilience.
