Kuala Lumpur: The average rent in Malaysia rose 3.9 per cent to RM1,995 in the second quarter (2Q 2024) compared to 1Q 2024, and 2.9 per cent from 2Q 2023, according to IQI Malaysia Home Rental Index report for 2Q 2024, released by Juwai IQI.
Juwai IQI co-founder and group chief executive officer Kashif Ansari said for the first time in a year, the annual growth rate has accelerated rather than slowed.
He said the Malaysia Home Rental Index moves with the flow of rental property supply and demand, seasonal shifts, the influx of international students, and investor activity.
“Our earlier forecast was that rental rates would climb moderately from zero per cent to three per cent, but the index has already increased by 3.9 per cent, more quickly than expected.
SPONSORED CONTENT Enjoy a taste of Malaysia, everyday with Ayam Brand™ local pastes SHAH ALAM: Fact: Every time Malaysians travel abroad, we almost immediately miss the taste of home. You don’t need to be homesick to celebrate Malaysia’s rich culinary heritage when you can savor the authentic taste of Malaysia in your own home with Ayam Brand™ cooking pastes. Read more “We now update our forecast and project the Home Rental Index to increase at an annual rate of 5.5 per cent by 1Q 2025,” he said in a statement.
In Kuala Lumpur, rents are 44 per cent higher than the national average, with a 51 per cent premium over Selangor’s average rent.
“Families seeking more affordable homes or to increase their disposable income can reduce their expenses by half by choosing areas with lower rents,” he said.
Kuala Lumpur not only has the highest average rent but also saw the strongest rental growth in the last quarter, rising by five per cent to RM2,863.
Meanwhile, Selangor's rents remained largely stable, increasing by just one per cent.
“The RM1,899 average rent in Selangor is five per cent higher than the two-year trend. Looking ahead, we expect rents in Selangor to moderate from its current pace to an approximately 3.0 per cent growth,” he said.
Citing data from Juwai IQI’s partner, Global Property Guide, he said the average gross rental yields for investors remained at 5.2 per cent in 2Q 2024.
“Gross rental yields also remained largely stable nationwide since the last quarter. We examined yields in eight locations: Johor Bahru, Iskandar Puteri, Petaling Jaya, Subang Jaya, Shah Alam, Ipoh, Kuala Lumpur, and Georgetown,” he said.
The IQI Malaysia Home Rental Index analyses over 70,000 residential rental transactions between 2018 and 2Q 2024.
Looking forward, he said economic growth or policy changes at home or abroad could impact yields in Malaysia.
“Our forecast is for stability or a gradual increase in gross rental yields as move towards 2025,” added Kashif.
* Follow us on Instagram and join our Telegram and/or WhatsApp channel(s) for the latest news you don't want to miss.
* Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available.