Market Trends of Malaysia Real Estate Industry
Oversupply Causing Problems
After a decade-long house price boom, Malaysia's housing market has been cooling in the past two years due to massive oversupply. There was MYR 18.48 billion (USD 4.41 billion) worth of unsold apartments in Malaysia's major cities last year, the result of a serious overbuilding of top-end properties during the recent boom.
To combat this over-building, the government introduced multiple measures to control speculation and discourage developers from over-building. Stamp duty was increased from 3% to 4% on properties worth above MYR 1 million (USD 238,578).
The government also introduced an additional 5% in real property gains tax (RPGT) on sales of properties owned for 6 years and beyond. However, these measures were temporarily relaxed to deal with the impact of the pandemic on the property market.
Greater Kuala Lumpur Increases Office Space
Greater Kuala Lumpur's office market reached a cumulative supply of over 136 million sq ft at the end of Q3/2021, of which 67% is located in WP Kuala Lumpur (91.7 million sq ft). This represented a year-to-date growth of 2.1% and was expected to close the year at 4.4% growth as more offices were completed by the end of 2021.
Nine new office completions were witnessed in the first nine months of 2021 in the Greater KL. Six of the buildings are in WP Kuala Lumpur, namely Menara Legasi, Menara Permata Sapura KLCC, TSLaw Tower, The Five at Kompleks Pejabat Damansara, Plaza Conlay, and Menara Great Eastern 2, amounting to 2.06 million sq ft.
On the other hand, Outer KL recorded three new office buildings, namely Q Tower, Imazium at Damansara Uptown, and Quill 9 Annexe, accounting for 0.69 million sq ft. Expected new office completions in Greater KL will amount to 9.9 million sq ft by 2023, representing a further supply growth of 7% from existing levels, of which WP Kuala Lumpur accounts for 84% or approximately 8.3 million sq ft.
