Malaysia Property Market 2024: Exceptional Performance Amid Mixed Sentiment
The Malaysian property market recorded an exceptional performance in 2024, with the total transaction value hitting RM232.3 billion and the volume of transactions reaching 420,545. This marked a significant 18% increase in value and 5.4% rise in volume compared to 2023, achieving levels not seen since 2011.
However, despite this record-breaking performance, industry sentiment appears mixed. Data from Napic (National Property Information Centre) and the Real Estate Housing Developers’ Association Malaysia (Rehda) reveal contrasting perspectives on the market’s current state.
Why Did the Malaysian Property Market Boom in 2024?
According to Napic, the property market growth was driven by robust activity across all sub-sectors, supported by:
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Economic Growth: Malaysia’s 5.1% economic expansion in 2024.
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Favourable Labour Market: Increased employment and improved income conditions.
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Financing Accessibility: Ongoing incentives like the RM10 billion Housing Credit Guarantee Scheme.
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Affordable Housing Initiatives: Implementation of 23 new affordable housing projects under the People’s Housing Programme (PPR).
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Government Policies: Easing of entry barriers for the Malaysia My Second Home (MM2H) programme.
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Industrial Development: Projects like the New Industrial Blueprint 2030 and the Forest City Financial District in Johor.
Diverging Sentiments: Napic vs. Rehda
Despite Napic’s data showing a positive outlook, Rehda’s Property Industry Sentiment Survey 2H2024 paints a more cautious picture.
1. Rehda’s Findings:
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Decline in Property Sales: Dropped from 47% in 1H2024 to 28% in 2H2024.
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Fewer New Launches: Decreased by 7%, from 14,653 units (1H2024) to 13,611 units (2H2024).
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Developer Hesitation: 56% of surveyed developers refrained from new launches due to market uncertainties.
Reasons for Caution:
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Financing Challenges: Tight lending criteria impacting buyers.
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Operational Constraints: Rising costs affecting developers’ launch plans.
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Market Fluctuations: Lower sales in the second half despite a strong start in early 2024.
Interpreting the Data: Why the Discrepancy?
Scope of Napic vs. Rehda Data:
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Napic: Broad coverage, including primary and secondary markets across all property sub-sectors (residential, commercial, industrial).
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Rehda: Focuses on the residential primary market, primarily reflecting the perspectives of private developers.
Why the Difference Matters:
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Napic’s data is more comprehensive but may not reflect short-term market sentiment.
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Rehda’s survey captures the business perspective of developers, focusing on the challenges of new launches.
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Timing and Frequency: Rehda’s biannual surveys capture short-term fluctuations, while Napic provides a long-term market view.
Analyzing Market Sentiment: Short-Term vs. Long-Term Perspectives
Annual View vs. Six-Month Trends:
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Despite the drop in sales during 2H2024, annual data shows improvement from 2023, with new launches increasing 11% from 25,424 (2023) to 28,264 (2024).
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Annual sales performance also grew from 34% (2023) to 37.9% (2024), indicating that the market is trending upwards on a year-over-year basis.
Key Insight:
Short-term drops in 2H2024 are not necessarily indicative of a decline in overall market health, but rather reflect cyclical business patterns influenced by economic cycles and seasonal factors.
Challenges of Data Accuracy and Relevance
1. Outdated Data:
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Napic’s records often face delays as they depend on officially registered transactions.
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Sub-sale/secondary market data is only recorded after stamp duty payment, causing lag in data representation.
2. Limited Developer Data:
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Rehda’s data may not represent the entire industry, as it only includes responses from 177 developers out of over 1,600 members.
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Selective representation could lead to a skewed perception of market dynamics.
Property Sector Insights for 2025
Residential Market:
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Landed Properties: Expected to remain in demand, particularly in urban centres and satellite cities.
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High-Rise Residential: Stabilisation expected with affordable unit launches gaining traction.
Commercial Market:
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Retail Properties: Slow recovery as consumer spending stabilizes post-pandemic.
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Office Space: Demand to remain modest amid remote work adoption.
Industrial Market:
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Positive Growth: Driven by the New Industrial Blueprint 2030 and regional development in northern Malaysia.
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Potential Oversupply: Risk in areas where developers are heavily focusing on industrial projects.
Key Trends to Watch:
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MM2H Reforms: Could drive foreign property investment.
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Affordable Housing Projects: Enhanced buyer interest due to government subsidies.
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Regional Development: Projects like Forest City Financial District to attract both local and international investors.
Conclusion: What to Expect in 2025
The Malaysian property market is poised for continued growth despite mixed sentiment from developers. While Napic’s data shows robust transaction value and volume, Rehda’s insights highlight challenges in the new residential launches.
Investment Insights:
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Balanced Viewpoint: Consider both long-term trends (Napic) and short-term business sentiments (Rehda).
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Focus on Growth Areas: Monitor regional developments and government policy impacts.
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Prepare for Fluctuations: Understand that half-yearly declines do not necessarily indicate a downturn, as annual growth metrics remain positive.
In navigating the property market in 2025, investors should consider comprehensive data sources and assess the broader economic context rather than relying on isolated metrics. Balancing long-term trends with short-term signals will be crucial for making informed investment decisions.
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