Malaysia’s Residential Property Market Sees Growth Surge in 2023, Reports Knight Frank

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Knight Frank Malaysia’s “Real Estate Highlights 2nd Half of 2023” report unveils an encouraging trend in Malaysia’s residential property market for the first nine months of 2023. The market experienced a growth in transaction volume and value by 1.3% and 3.5% respectively year-on-year.

This upswing is attributed in part to strategic promotional efforts by developers, including innovative collaborations with banks and a range of post-sale services like hassle-free fit-out, rental programmes, and home care services.

“Despite challenges such as inflationary pressures and a higher overnight policy rate, the residential property sector is showing signs of resilience and growth,” explained Judy Ong, senior executive director of research and consultancy at Knight Frank Malaysia. “This optimism is further buoyed by government initiatives promoting homeownership, and the easing of the Malaysia My Second Home (MM2H) Programme criteria, setting a cautiously optimistic tone as we head into 2024.”


During the same period, the industrial property market witnessed a 7.6% increase in sales value, despite a 4.6% decrease in transaction volume. This indicates a relative stability in the sector.

The office market in Kuala Lumpur City, however, faced challenges due to a supply-demand imbalance. In contrast, the office markets in KL Fringe and Selangor demonstrated resilience, with steady leasing activities, especially in prime locations with Grade A buildings.

The retail sector saw a downward revision in sales growth projection to 2.7% from an earlier 4.8%, impacted by reduced consumer spending power amid rising inflation. Yuen May Chee, director of property management at Knight Frank Malaysia, anticipates the sales and service tax (SST) rate hike and the introduction of a luxury tax may further impact retail market growth.

In Penang, the property market remained stable, with high-rise residential properties performing well. Retail malls in the state saw an improvement in occupancy rates, and selected privately owned purpose-built office buildings maintained stable rental and occupancy levels.

The Johor property market, particularly in Johor Bahru, observed consistent asking rental rates for office space and an uptick in transactions for high-rise residential properties, especially in areas close to the Johor Bahru–Singapore Rapid Transit System (RTS) Link project.

In Sabah, the housing sector remains a buyer’s market, with condominiums and apartments making up the majority of existing stock. Alexel Chen, executive director of Sabah branch at Knight Frank Malaysia, noted the popularity of retail components in mixed-use developments in the city center, particularly in the F&B sector, and the entry of notable retailers into the Kota Kinabalu market, signaling a positive outlook for the state’s retail segment.

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