How investors can capitalise on Malaysia’s prime residential market

This segment is expected to see strong growth in the near term.

According to a JLL report, Malaysia’s Ministry of Tourism, in collaboration with the Ministry of Home Affairs and the Immigration Department, is refining the Malaysian My Second Home (MM2H) programme’s requirements to enhance it. 

The goal is to attract more participants and encourage tourists and foreign investors to choose Malaysia as their destination, thereby boosting overseas investment potential.

Here’s more from JLL:

Investors and landlords should closely monitor these trends and capitalise on the projected growth in the Prime residential market. They should adapt their investment strategies and explore opportunities in the rental property sector to maximise returns. JLL predicts a rising demand for rental properties, which can potentially result in higher rental yields.

Strong demand for prime residential as the market improves

In 1Q24, the Central Bank of Malaysia maintained the interest rate at 3%. Some analysts anticipate a downward revision of the interest rate towards the end of the year.

The demand for residential properties remains robust as market conditions have significantly improved compared to a year ago, as evidenced by the increasing number of new prime and luxury property launches.

Five new residential projects are set to launch in the prime area

Two projects, Setia Sky Seputeh and Residensi Astrea, were completed in the quarter, adding a total of 530 units to the available stock. However, the completion of the other two projects has been delayed, which is hampering the optimisation of construction works. 

Five projects, Arte Solaris, Pavilion Mont Kiara, Bangsar Hill Park, Kyliez Suites and The Ashwood, were launched during the quarter, totalling 1,793 units.

MM2H favoured by expats; renting remains an alternative

The Prime segment of the investment market has seen a positive trend, largely driven by changes in the Malaysian My Second Home (MM2H) programme. Chinese citizens have the highest number of active MM2H passes. The government is currently refining and enhancing the programme to further boost potential overseas investments.

The rents in the Prime market have shown a further increase in 1Q24. The growth of the rental market is attributed to the influx of urban dwellers.

Note: Kuala Lumpur Residential refers to Kuala Lumpur's prime residential market.