Property site, iProperty.com.my has highlighted in its Portal Demand Analytics (Rental Market) that the demand for residential rental properties in Selangor was at -10.3 percent Y-o-Y in 2020 for all building types. However, terraced houses recorded a demand growth of +2.8 percent making Selangor the only state in Malaysia with a positive growth in 2020.
This can be attributed to renters moving to suburban areas seeking spacious living spaces in Bangi, Rawang, Kajang, and Cyberjaya.
Many visitors were looking for double-storey terraced houses priced between RM1,200 to RM2,000 and between 1,500 to 2,500 sqft in size. Ulu Klang is the area in Selangor with the highest growth in demand, growing +32 percent Y-o-Y.
A large number of visits were for condominiums priced below RM 2,000 and between 1,250 to 1500 sqft in size.
The rental demand figure for Penang in 2020 stood at -18.3 percent. As a tourist state, Penang’s economy was affected by the pandemic although the situation improved during the year-end holiday period, providing much-needed businesses for hotels and short-term accommodations.
One positive finding is the continued rental demand for apartments and flats in the industrial areas of the state including Sungai Dua, Bayan Baru, Bukit Jambul and Perai (mainland) as workers look for affordable accommodations. Sungai Dua is the most in-demand area in Penang with more than half of visitors interested in apartments below RM 1,000.
Demand for rental properties in Bukit Jambul is also encouraging due to visitors looking for flats priced below RM700 and between 500 to 750 sqft in size.
Being the state with the most unsold properties in Malaysia, the Johor residential rental property market remained sluggish as newly completed units remained idle, resulting in a drop-in demand figure by -27.8 percent Y-o-Y for all building types.
In addition, the closure of the border between Singapore and Malaysia has impacted the rental market in Johor Bahru. Nevertheless, the expected completion of the Rapid Transit System (RTS) project in 2026 looks to improve Johor’s residential rental property demand.
The industrial city of Pengerang is the most in-demand area in Johor thanks to its role as the southern oil and gas hub. Many visitors were looking for double-storey terraced houses priced between RM1,400 to RM1,700 with built up sizes of between 1,500 to 2,000 sqft.
Commenting on the release of iProperty.com.my 2020 Portal Demand Analytics (Rental Market), Shylendra Nathan, General Manager of iProperty.com.my said, “The entrance of newly-completed projects in an already crowded market has caused landlords to drive down their rental rates as they compete to attract a limited pool of financially stable tenants. Indeed, tenants are now in a better position to negotiate prices and this has been reflected in slight drops in median asking rent prices and rental yields. Although the lower Overnight Policy Rate (OPR) has reduced monthly loan instalments for property owners, the bigger drop in rental income is currently offsetting the lower financing cost advantage.”
“On a brighter note, the ongoing vaccination programme has provided much-needed optimism for the local property market. Although the recovery will not be as fast as many would expect, it will definitely boost the property market’s recovery in the first half of 2021. As our country begins the journey towards achieving herd immunity, we expect to see higher consumer confidence in the property market as a result.”