Property prices remain stagnant in Kuala Lumpur and Penang, Malaysia’s two largest cities, which both suffer from oversupply.

Meanwhile, the Malaysian Ringgit is hovering around its lowest level against the U.S. Dollar since the 1980s. Investors who bought property in Malaysia several years ago are now sitting on steep losses in terms of other currencies.

Casual observers would probably think they shouldn’t buy Malaysia real estate because of all this. Reaching that conclusion is easy among oversupply, a struggling currency, and strong competition throughout Southeast Asia.

With all that said, I think Malaysian property is now undervalued – especially in terms of most global currencies. Foreign buyers have a more enticing entry point than they’ve seen in awhile.

Malaysia certainly faces important challenges. Natural market forces should overcome a lot of them with time and patience though.


Population Growth & Urbanization

Oversupply is a huge problem in the Malaysia real estate market. There’s just too many expensive condos and housing projects. Meanwhile, both developers and resellers face difficulties finding buyers.

But this issue should eventually fix itself. Malaysia has a young, growing population which will increase by 20% before the year 2030.

Six million new citizens, many of them part of a rising middle class, will drive demand in central areas.


A greater number of people goes a long way toward soaking up excess supply. That’s especially true in desirable areas with limited space. Furthermore, locals moving from rural areas into the city will also increase demand.


Strong Economy

Ranked as Southeast Asia’s third wealthiest nation, Malaysia’s high living standards are close to a developed country’s. Yet their economy boasts better performance than most emerging markets.

Low oil prices and weak exports caused problems over the past few years. However, the Malaysian economy is diverse and looks like it already overcame a temporary stall in growth.

The World Bank predicts Malaysia will grow by 5.2% this year, which is the same pace as a far less developed Indonesia. Malaysia’s economy especially looks good compared to an expected rise of just 3.8% in neighboring Thailand.

Of course, economic growth means higher purchasing power. This translates to locals having more ability to afford real estate. In turn, that means stronger demand and rising home values.

Competitive Prices

As noted above, Malaysia is one of the richest countries in the region. Property values are still among Southeast Asia’s lowest though.

You can now purchase prime, city-center real estate in Kuala Lumpur for under RM8,000 (US$2,000) per square meter. That’s even cheaper than in Bangkok or Hanoi which are less developed cities.

It probably doesn’t matter if you’re a local buyer. But the Malaysian Ringgit is also near multi-decade lows with few places left to go except upwards. The Ringgit’s rise against other currencies would increase a foreign buyer’s gains even further.

Malaysia real estate is a less obvious choice than others in the region. Nonetheless, a robust economy, strong demographics, and rock-bottom prices make the country a solid option for investors.

Want to buy property in Malaysia? Our ultimate guide can help you with much more information.

About Reid Kirchenbauer

Reid Kirchenbauer is the Founder of InvestAsian. He's an international stock trader and property investor based in Thailand, Cambodia, and several other places. Reid manages the world's first and only frontier market real estate fund and has been featured in publications such as Forbes, Property Report, the South China Morning Post, and Seeking Alpha. You can download his free investment guide by clicking here.

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