What real estate negotiators say about Malaysia’s evolving property market

By Joseph Wong

The Malaysian property market in 2024 reflects diverse perspectives on the shifting trends between renting and buying. Industry experts and negotiators weigh in on this ongoing debate, sharing insights based on their experiences and observations.

For many Malaysians, renting has increasingly become a practical and viable choice for the younger generation, particularly in today’s challenging economic climate characterised by rising property prices, tightening loan regulations and the growing cost of living, which collectively make home ownership less accessible for a significant portion of the population.

"More people are choosing to rent rather than buy property in 2024, especially those in the low- to middle-income brackets. The unstable economy and high inflation play significant roles in this trend. Renting provides flexibility, allowing people to move when they feel bored with their current home,” said Jeon Lim of Knight World Realty notes, 

Lim Oi Lay, also from Knight World Realty, agrees, emphasising that renting is becoming an increasingly popular choice due to high property prices, stricter loan requirements and economic uncertainty. 

“Many young people and first-time buyers find home ownership out of reach, while renting provides flexibility without the heavy financial burden of a mortgage. Additionally, the rising cost of living and uncertainties in the job market make renting a more accessible and practical solution for a growing segment of the population," she said.

Vincent Chan of Foreward Realty added: “This shift is particularly driven by millennials and Gen Z, who prioritise lifestyle flexibility over committing to long-term mortgages. While this change reflects evolving preferences, it also presents opportunities for existing home owners and investors. With rising rental demand boosting occupancy rates and yields, now is an excellent time to consider property investments. For those with the means, this growing rental market offers significant potential for returns."

Others, like Heikey Teow from BPG Realty, point to factors such as job mobility and shifting generational attitudes, observing that the younger Malaysians no longer see home ownership as essential. 

“However, in cities with relatively affordable housing, buying a property may remain a mainstream choice, influenced by traditional values and the long-term benefits of home ownership," Teow said.

An amused Aien Yusoff of AFZ Realty quipped that as the payment for rental is lower than the bank installment for the same property, it is little wonder why youngsters opt for the former.

Why buying still holds appeal

Despite the appeal of renting, with its flexibility and lower immediate financial commitment, many negotiators continue to emphasise the enduring value of home ownership, highlighting its potential for long-term wealth building, stability and the opportunity to secure a tangible asset that often appreciates in value over time, providing financial security for future generations.

Rachel Chan of Foreward Realty highlighted the growing interest among younger buyers, stating: "The real estate market is experiencing a notable shift, with more young buyers in their mid-20s choosing to purchase property rather than rent. This trend is fueled by the availability of mid-range and affordable housing options, making home ownership more accessible. 

“For many, the long-term investment potential of real estate is a key attraction, as property values generally appreciate over time, especially in high-demand areas with consistent housing needs. Additionally, the sense of ownership and stability associated with owning a home motivates buyers to invest. 

“This growing interest in real estate reflects a broader movement among younger generations toward financial independence and strategic long-term planning. It marks a significant change in attitudes toward property ownership, highlighting the increasing appeal of real estate as both a practical and rewarding investment," she said.

Angelly Gan of Gplex Realty also pointed out that more and more younger buyers are opting to buy due rising property value and rent costs escalating, saying that more people see the advantage of owning a home sooner rather than later. 

Jackson Chan from Power Home Realty added: "I personally believe more people will opt to buy property due to its potential for long-term wealth building, as real estate typically appreciates over time. Home ownership offers stability and control over living conditions, unlike renting, where prices can fluctuate unpredictably. For many, owning property is an essential part of retirement planning and provides security for the next generation. 

“Additionally, it is relatively easier to own property in Malaysia compared to neighboring countries. With various government and developer incentives and campaigns, the upfront costs have become more accessible for the majority," he reasoned.

Moreover, improved public transportation within the Klang Valley has played a key role in encouraging property purchases, further fueled by the relentless marketing efforts from developers eager to showcase the convenience and connectivity their projects offer.

Aiman Shamsudin of AFZ Realty pointed out that the rapid development of new housing in rural areas, along with improved transportation routes and better connectivity between major cities and rural areas, is positively impacting property ownership in these regions, making it more accessible and competitive.

Jane Poh of BPG Realty added: “While properties in prime locations remain more expensive, ongoing improvements to Malaysia's transportation system have made it more convenient for buyers to consider living in areas farther from city centers. This has made investing in homes located at greater distances from central hubs a more viable and acceptable option for many."

Meanwhile, Cindy Lee of Foreward Realty looks ahead, predicting that by 2025, improving economic conditions and government support will encourage Malaysians to return to property buying despite current affordability challenges.

"These factors could make buying a house increasingly attractive for potential buyers, signaling renewed confidence in the market," said Lee.

While renting may dominate in the short term, many will continue to aspire to owning property as economic conditions stabilise and affordability improves over time, pointed out Power Home Realty’s James Yap.

Commercial property: A growing opportunity

On the commercial front, negotiators are also observing a growing interest in this property segment which is driven by factors such as its potential to generate steady rental income, its role as a long-term investment with significant appreciation prospects and the increasing demand for strategically located spaces to support businesses in thriving economic hubs.

Heng Weng Kheng of Knight World Realty stated: "More people will choose to buy commercial property because its availability is likely to decrease, creating limited stock in the future. This scarcity could drive up property values, making ownership a valuable long-term investment. Additionally, commercial properties generate positive passive income through rental returns, further enhancing their appeal over renting."

Balancing perspectives

The rental versus buying debate ultimately hinges on individual circumstances. While renting offers flexibility in uncertain times, owning property remains a goal for those seeking stability, long-term investment potential and generational security.

"The current property market reflects a roughly equal split between renting and buying, driven by financial realities across different income groups. Middle- to high-income clients (M40 to T20) tend to purchase properties, benefiting from financial stability. Conversely, the B40 group often rents out of necessity, hindered by challenges such as loan rejections, depleted EPF savings post-MCO and insufficient income levels for home ownership. With approximately 9 out of 10 B40 buyers struggling to secure financing, renting becomes the default option for this segment. This dynamic creates a balanced demand for renting and buying, shaped by financial disparities and access challenges across income brackets," said Knight World Realty’s Kelven Yap.

As Des Lim of Knight World Realty aptly puts it: "Although I often heard that the economy has not been good over the past two years, the properties I handled were all fully sold within a few months. I learned something significant from a colleague—that the rental value largely depends on how effectively an agent helps secure tenants. From this, I realised that as real estate agents, our role goes beyond negotiation. We create value. Regardless of whether the economy is booming or struggling, opportunities always belong to those who can create value."

Whether renting or buying, the Malaysian property market in the interim period continues to evolve, offering opportunities for all segments of society. From flexible rental options to strategic property investments, the market reflects a dynamic interplay of trends shaped by economic realities and individual aspirations.

Stay ahead of the crowd and enjoy fresh insights on real estate, property development and lifestyle trends when you subscribe to our newsletter and follow us on social media.