Renters in Malaysia can continue to benefit from the Property Market in 2021

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iProperty.com.my 2020 Portal Demand Analytics (Rental Market) revealed its rental demand data publication in Malaysia for 2020. The findings revealed the demand for the top four rental property markets – KL, Selangor, Penang, and Johor.  Also, find out how the job market, industrial sector, and border closure impacted rental demand among home seekers. On top of that, check out the most in-demand areas for the major areas that are ranked according to consumers’ visits data compiled from January to December 2020.

malaysia rental market 2020

© Sanga Park/ gettyimages

Note: To ensure that the demand data is of the highest quality, proper due diligence was conducted. This is on top of the certain measures that were put in place during the preparation of The iProperty.com.my 2020 Portal Demand Analytics (Rental Market). Please refer to the Notes section at the end of this article for more details.

The 2020 Portal Demand Analytics (Rental Market) by iProperty.com.my provides the latest overview of the demand trends in the Malaysian rental market using the property portal’s user visits and property listings data. 

As Malaysia’s No.1 Property Site,  iProperty.com.my garners millions of visits each month. These real-time behaviours indicate where Malaysia’s residential rental demand (consumers’ visits to the site) is compared to property supply (residential property rental listings on the site). The analysis aims to provide an insight for policymakers and property developers on Malaysian residential property preferences. The report focuses on four main regions; Kuala Lumpur, Selangor, Penang, and Johor.

Check out the H1 2020 Portal Demand Analytics (Rental Market) here

Key takeaways 

Here are some key takeaways from the 2020 Portal Demand Analytics (Rental Market):

  • Visits figures for rental properties in 2020 grew faster than visits to properties for sale but the increase in rental property listings has outpaced the increase in visits, causing the national demand figure to decline to -12.6%.
  • At the end of 2020, the rental yield for terrace houses was at 3.3% from 3.4% in H1 2020.
  • The median asking rent for condominiums was RM1,800, from RM1,900 in H1 2020, while for serviced residences, the median asking rent was RM1,600 from RM1,700.
  • Demand for residential rental properties in Kuala Lumpur declined by -7.7% YoY with the apartments segment saw a double-digit decline in demand. 
  • Spacious accommodation in Selangor is still having demand despite residential rental properties dropped by -10.3% YoY.
  • Ulu Kelang is the area in Selangor with the highest growth in rental demand, growing +32% YoY.
  • In Penang, residential rental properties demand continued to see growth as the industrial sector remained open.
  • Rental demand in Johor remained subdued as incoming supply and border closure impacted the market. 

The report focuses on four main regions; Kuala Lumpur, Selangor, Penang, and Johor. In this article, we will share the following highlights from the report:

  1. National overview of the Malaysian Rental Market
  2. Factors affecting changes and shifts in demand for states and capital cities in Malaysia
  3. 20 Most in-demand areas in Kuala Lumpur and Selangor
  4. 15  Most in-demand areas Penang
  5. 10 Most in-demand areas in Johor

National Overview: National demand for rental houses decline in 2020 to -12.6% from -5.6% in H1 2020

rental market malaysia 2020

Note: National demand is based on all property types including semi-detached, bungalows, clusters, townhouses and flats. © iProperty.com.my

Overall, the 2020 national demand for rental property declined by -12.6% in 2020 due to the increase in rental property listings outpacing the increase in visits. At the end of 2020, the rental yield for terrace houses was at 3.3% from 3.4% in H1 2020. The median asking rent for condominiums was RM1,800, from RM1,900 in H1 2020, while for Serviced Residences, the median asking rent was RM1,600 from RM1,700.

One of the H1 2020 Portal Demand Analytics (Rental Market) highlights was of people opting to rent due to uncertainties brought about by the COVID-19 pandemic. This trend has continued for the rest of 2020, where the visits figure for rental properties in 2020 grew faster than visits to properties for sale. Judging by these visits figures, there is a trend towards renting as opposed to buying properties.

However, landlords who are currently renting out their units are facing challenges as some tenants are unable to pay their rents. This situation is further worsened by new residential properties entering the market as property investors would have to compete to attract a limited pool of financially stable tenants. The rental property sector is further impacted as a sizable portion of the tenant pool in major cities consisting of expatriates, foreign students and local students have returned to their home cities. 

This has been reflected in the number of user visits to areas around colleges in the Klang Valley, which has reduced by 7%, while property searches by users from foreign countries have dipped slightly by 9% in 2020. As the competition among landlords would be fierce, tenants are now in a better position to negotiate prices, and indeed, this translated into slight drops in asking prices and rental yields in 2020.

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The job market, industrial sector, and border closure impacted rental demand among home seekers

Drilling down into the top four rental residential property markets in Malaysia – KL, Selangor, Penang, and Johor, 2020 Portal Demand Analytics (Rental Market) revealed that the rental market in all four major cities declined in 2020. For Kuala Lumpur (KL), the demand for residential rental properties declined by -7.7% YoY. The weakening of the job market slowed down the demand for apartments as it was the main choice of blue-collar workers and daily wage earners, and these workers who are in the B40 segment were hit the hardest by the onslaught of the pandemic. For 2020, KL recorded a double-digit drop for its apartment segment, with -19.8% YoY. 

Selangor, particularly its suburban areas, has benefited the most from the pandemic’s population outflow. Ulu Kelang is the area in Selangor with the highest growth in rental demand, +32% YoY. Despite declining YoY rental demand, spacious accommodation still has positive rental demand. Terrace houses grew by +2.8% in 2020 while condominium and serviced residence segments further declined compared to the H1 2020. On the other hand, visits for apartments have remained unchanged with rental prices holding steady. Also, there is a high rental demand for terrace houses and apartments for rent in Rawang. Users were looking for double-storey units between 1,250 sq ft to 2,000 sq ft in size, incorporating four bedrooms and priced around RM1,000.

Meanwhile, in Penang, the rental demand figure for Penang in 2020 stood at -18.3%. Both visitorship and listings increased on a YoY basis with listings outpacing visits figures. Despite that, accommodations around the industrial area are still in demand. Visits for apartments and flats continued to grow as the industrial sector remained open, and areas such as Sungai Dua, Bayan Baru, Bukit Jambul, and Perai continued to provide workers accommodation. 

Incoming supply and border closure impacted rental demand in Johor. Visits for Johor rental properties have experienced a drop while listings increased. Not just that, newly completed units have entered the market and remained idle, resulting in a drop in demand figure by -27.8%. Before the Movement Control Order (MCO) more than 300,000 people would commute across the Causeway daily. Nevertheless, the closure of the border between Singapore and Malaysia has undoubtedly impacted the rental market in Johor Bahru as many were forced to seek temporary residences in Singapore.

Next, we will dive into the top 20 most in-demand areas in four major cities and the suburban areas that dominated the residential property market. 

20 Most in Demand Areas in 2020 – KL and Selangor

The areas below were ranked according to the area/property listings which garnered the highest number of unique visits from 1 January to 30 December 2020.

KUALA LUMPUR

  1. Taman Tun Dr Ismail (TTDI)
  2. Damansara Heights
  3. Wangsa Maju 
  4. Pantai
  5. Brickfields
  6. KL Sentral
  7. Bangsar
  8. Jalan Ipoh
  9. Sentul
  10. Setapak
  11. Bukit Jalil
  12. Cheras
  13. Seputeh
  14. Segambut
  15. Sungai Besi 
  16. Kepong
  17. Taman Desa
  18. Sri Hartamas
  19. Bandar Manjalara
  20.  Desa Parkcity

Taman Tun Dr Ismail (TTDI) tops the chart for the most in-demand area in KL for 2020. But in terms of the price range, Wangsa Maju garnered the most number of visits on iProperty.com.my, for units with asking rental below RM2,000 and with built-up sizes of around 1,000 sq ft. Many visitors to the site were looking for condominiums in the area.

SELANGOR

  1. Bangi
  2. Rawang
  3. Setia Alam
  4. Klang
  5. Shah Alam
  6. Semenyih
  7. Sunway
  8. Damansara Perdana
  9. Petaling Jaya
  10. Damansara Damai 
  11. Kajang 
  12. Cyberjaya
  13. Sungai Buloh
  14. Subang Jaya
  15. Selayang
  16. Tanjong Dua Belas
  17. Batu Caves
  18. Ulu Kelang
  19. Ampang
  20. Ara Damansara

Bangi took the crown as the most in-demand area in Selangor for rental houses in 2020. Many of iPorperty.com.my’s users were interested in the double-storey terrace houses that were priced between RM1,400 to RM2,000, with built-up sizes between 1,500 sq ft to 3,000 sq ft. These houses come with four bedrooms. 

Ulu Kelang is another notable area on the list at 18th place, and it also recorded the highest rental demand growth for Selangor at +32%. Many of its visitors were looking at condominiums priced below RM2,000 with built-up sizes ranging from 1,250 sq ft to 1,500 sq ft. These condominiums offer three bedrooms. 

Many users who visited Selangor properties for rent were looking for double-storey terrace houses between 1,500 to 2,500 sqft, with four bedrooms and priced between RM1,200 to RM2,000.

15 Most in-demand areas in 2020 – Penang 

Penang

  1. Sungai Dua
  2. Perai
  3. Bukti Mertajam
  4. Bukit Jambul 
  5. Simpang Ampang
  6. Ayer Itam
  7. Butterworth
  8. Georgetown 
  9. Bayan Baru
  10. Sungai Ara
  11. Jelutong
  12. Batu Ferringhi
  13. Bayan Lepas
  14. Tanjung Bungah 
  15. Gelugor

Sungai Dua is the most in-demand area for rent in Penang. Consumers are interested in properties priced below RM1,000. On the other hand, demand for rental properties in Bukit Jambul is still in the green zone, bolstered by a surge in demand for flats with two bedrooms that are 500 sq ft to 750 sq ft in size and priced below RM700.

10 Most in-demand areas in 2020 – Johor

Johor

  1. Pengerang
  2. Kulai
  3. Pasir Gudang
  4. Ulu Tiram
  5. Gelang Patah
  6. Masai
  7. Perling 
  8. Skudai 
  9. Johor Bahru (JB)
  10. Tampoi

Pengerang tops the list for Johor’s most in-demand area for rental properties, bolstered by a vibrant oil and gas sector that is still seeing plenty of job hires. Many users were looking for RM1,400 to RM1,700 double-storey terrace houses between 1,500 sq ft 2,000 sq ft in size, with four bedrooms. 

Not just that, Pasir Gudang saw a slight increase in visitors for terrace houses priced around RM900 with built-up sizes between 1,500 sq ft and 2,000 sq ft. These houses have three to four bedrooms. 

For more insights, you may check out the full report on our website. To download the full 2020 Portal Demand Analytics (Rental Market) publication, click here

NOTES

1) Considerations and measures put in place:

  • Only areas with more than 350 listings were selected to negate the effects of any spikes.
  • Unique visits were used to prevent a single user from distorting the demand figures through multiple visits.
  • In cases where a single user visits multiple areas, the visit is equally weighted across the various areas and building types to maintain the uniqueness of the user.
  • All visits used in this report are based on organic and direct traffic only.
  • The median rental yield was calculated by taking the median of all rental yields by projects in a given group.

2) Definitions

  • Unique Visit: Based on Google Analytics tracking of unique visitors, multiple visits by one visitor are counted as one unique visit.
  • Active Property Listing: Property listings in iProperty.com.my that were active for at least one day and had a minimum of 1 view.
  • Property Demand: The number of unique visits over the number of active property listings.
  • Organic / Direct Traffic: Based on Google Analytics tracking, organic and direct traffics are not obtained through paid services or other sites

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