Real Estate - Malaysia

Malaysia

The Real Estate market market in Malaysia is anticipated to achieve a value of US$0.87tn in 2024.
The dominant segment within this market is Residential Real Estate, which is expected to reach a projected market volume of US$0.65tn in the same year.
It is projected that this segment will exhibit an annual growth rate of 3.43% (CAGR 2024-2029), resulting in a market volume of US$1.03tn by 2029.
In comparison to other countries worldwide, United States is expected to generate the highest value in Real Estate market, reaching US$132.0tn in 2024.
The real estate market in Malaysia is experiencing a surge in demand for luxury condominiums in prime locations.

Key regions: United States, China, Japan, Germany, United Kingdom

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Analyst Opinion

The Real Estate market in Malaysia has been experiencing significant growth and development in recent years.

Customer preferences: One of the key customer preferences in the Malaysian Real Estate market is the demand for affordable housing. With a growing population and urbanization, there is a strong need for affordable homes, particularly among the middle-income group. Additionally, customers are also increasingly looking for properties that offer good amenities and are located in convenient locations, such as near transportation hubs and commercial centers.

Trends in the market: One of the major trends in the Malaysian Real Estate market is the rise of high-rise residential developments. Due to limited land availability in urban areas, developers are focusing on building vertical communities that offer a range of amenities within a single complex. These high-rise developments often include facilities such as swimming pools, gyms, and shopping centers, providing residents with a convenient and self-contained living environment. Another trend in the market is the increasing demand for properties in tourist destinations. Malaysia is known for its beautiful beaches, lush rainforests, and vibrant cities, attracting a large number of tourists each year. As a result, there is a growing demand for vacation homes and investment properties in popular tourist destinations, such as Penang, Langkawi, and Kuala Lumpur.

Local special circumstances: One of the unique aspects of the Malaysian Real Estate market is the availability of the Malaysia My Second Home (MM2H) program. This program allows foreigners to purchase properties in Malaysia and obtain a long-term visa, making it an attractive option for retirees and expatriates. The MM2H program has contributed to the growth of the luxury real estate segment, as foreign buyers are drawn to the country's favorable climate, affordable cost of living, and high-quality healthcare services.

Underlying macroeconomic factors: Several macroeconomic factors have contributed to the development of the Real Estate market in Malaysia. The country's strong economic growth, stable political environment, and favorable investment policies have attracted both local and foreign investors. Additionally, low interest rates and easy access to financing have made it easier for individuals to purchase properties, stimulating demand in the market. In conclusion, the Real Estate market in Malaysia is experiencing growth and development driven by customer preferences for affordable housing, high-rise residential developments, and properties in tourist destinations. The availability of the MM2H program for foreign buyers and favorable macroeconomic factors have also contributed to the market's expansion.

Methodology

Data coverage:

Figures are based on value of residential and commercial real estate, average real estate value, residential estate transactions and leases.

Modeling approach / Market size:

Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data from international organizations and industry associations. Next we use relevant key market indicators and data from country-specific associations such as GDP, price level index, household wealth, household size, number of renter and owner households, housing consumer spending per capita. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, exponential trend smoothing. The main drivers are GDP per capita, population, number of renter and owner households, price level index, housing consumer spending per capita.

Additional Notes:

The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.