Melaka Property Market 2025: Rising Prices and Strategic Investment Opportunities
Melaka’s property market continues to thrive, recording steady growth in both residential prices and transaction volume. According to Rahim & Co International Property Consultants Sdn Bhd, the average transacted price of residential properties in Melaka rose to RM340,000 in 2024, compared to RM214,000 in 2015. This upward trend reflects the state’s robust economic activities and increasing demand for residential properties.
Why Are Property Prices Rising in Melaka?
Despite the price surge, Melaka remains one of the most affordable states in Malaysia when considering the income-to-price ratio. According to Sulaiman Saheh, Director of Research at Rahim & Co, the state’s proactive control over housing prices has played a crucial role in maintaining affordability.
Key Factors Driving Price Growth:
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Economic Expansion: Increased investment and development activities in key regions.
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Growing Demand: Higher demand for both landed and high-rise residential units.
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Affordability Maintenance: Proactive measures to prevent price hikes from outpacing income levels.
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High Transaction Volume: In 2024, Melaka recorded 20,321 property transactions worth RM6.7 billion, a significant increase from 16,869 transactions worth RM5.8 billion in 2023.
Residential Market: Landed Properties on the Rise
Positive Growth for Landed Properties
According to Fiqri Rohaizad, Senior Manager of Valuation Services at Rahim & Co, landed properties in Melaka continue to show strong performance with significant potential for capital appreciation. This segment remains popular due to its long-term investment appeal and resale value stability.
High-Rise Properties: Signs of Stabilisation
The high-rise residential sector is showing signs of stabilisation, with both demand and supply balancing out. Prices in this segment have also started to adjust, reflecting the market’s effort to maintain affordability while meeting urban housing needs.
Industrial Sector: Growth Amid Oversupply Concerns
Government Support for Industrial Growth
Melaka’s industrial sector is anticipated to grow, driven by government initiatives and incentives. However, there is a growing concern about potential oversupply, as developers increasingly focus on industrial projects.
Absorption Challenges:
While industrial properties are being developed rapidly, occupancy rates in some areas remain low, suggesting the need for more strategic planning. As noted by Fiqri, the trend of overbuilding in the industrial sector mirrors what previously happened with the retail sector, where rapid growth outpaced market demand.
Commercial Sector: Steady Recovery and New Entrants
The commercial property market in Melaka appears to be stabilising after a challenging period. Occupancy rates are improving, particularly in urban and strategically located areas. Notably, popular retail brands from the Klang Valley, such as Jaya Grocer, Uniqlo, and Padini, are expanding into Melaka, reflecting renewed commercial confidence.
Key Commercial Trends:
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Retail Revival: Major brands setting up new outlets.
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Increased Footfall: As tourism rebounds, retail and hospitality sectors gain momentum.
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Mixed-Use Developments: Combining residential and commercial spaces to maximize utility.
Promising Investment Areas in Melaka
Northern Region:
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Masjid Tanah Perdana: Growing residential and commercial hub.
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Krubong Heights and Scientex Durian Tunggal: Strong residential development.
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Anjung Sungei Petai and Anjung Ayer Paabas: Emerging as residential hotspots.
Central Region:
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German Technology Park: Industrial development hub.
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Impiana Kesang and Molek Residence: Attractive for both residential and commercial investments.
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Gapam Perdana and I-Molek: Residential projects with modern amenities.
Southern Region:
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Scientex Jasin Mutiara and Taman Merlimau Mutiara: Expected to see rapid growth due to increased development activity.
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Parkland and Bandar Jasin: Proximity to urban centres and improved infrastructure.
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Taman Muhibbah: Suitable for long-term residential investments.
Why the Southern Region is Gaining Attention:
The southern part of Melaka, particularly Jasin, is marked for significant development as former plantation lands are being transformed into residential and mixed-use projects. These areas offer great potential for future growth, particularly as they remain relatively close to the town centre.
Investment Outlook for 2025
Bright Spots:
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Landed Residential Properties: High demand and capital growth potential.
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Mixed-Use Developments: Integrating residential, commercial, and lifestyle amenities.
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Tourism and Retail: Boosted by new commercial entrants and increasing tourist footfall.
Challenges to Watch:
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Industrial Overbuild: Monitoring supply and demand to prevent vacancies.
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Economic Uncertainty: Global economic shifts affecting investment sentiments.
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Affordability Maintenance: Balancing rising prices with household income levels.
Why Invest in Melaka Now?
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Stable Price Growth: Maintained affordability despite rising prices.
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High Transaction Volume: Indicating continued market confidence.
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Strategic Locations: Investment hotspots across northern, central, and southern regions.
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Economic Support: Government initiatives enhancing industrial and residential sectors.
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Tourism Appeal: Increasing footfall from domestic and international visitors.
Conclusion: Melaka’s Property Market on the Rise
Melaka’s property market is evolving, driven by rising residential prices, steady commercial recovery, and promising industrial developments. While challenges like industrial oversupply exist, the overall outlook remains positive, especially for landed residential properties and strategically located mixed-use developments.
Investors looking to capitalize on Melaka’s growth should focus on areas with high potential for appreciation, particularly in Jasin and the central urban zones. As the market continues to expand, proactive strategies and long-term planning will be key to navigating Melaka’s dynamic real estate landscape.
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