Residential rental yields likely to grow 1.7%


MALAYSIAN real estate agents expect an average growth of 1.7% in residential rental yields through the end of 2020, according to a recent study.

The Juwai IQI’s first-quarter of 2020 Property Index and Survey for Malaysia revealed that Sarawak, Kuala Lumpur and Selangor have the strongest two-year forecast for rental rates.

In both sub-markets, agents forecast that rents will climb by 7.9% through the end of 2021, said the survey, which was answered by more than 340 real estate agents in the country.

Meanwhile, Penang has the weakest forecast with rental rates expected to climb 3.8% through next year.

Juwai IQI group ED Kashif Ansari said property agents are more confident about rental rates in the next two years.

“The findings showed that Sarawak has the highest forecast rental growth at 5.4% in 2020. Meanwhile, Penang has the most negative forecast, with rental rates there expected to fall by 5.8% in 2020.

“Nationwide, agents expect rental rates to climb by 7.1% by January 2022,” he said in a statement yesterday.

The survey also predicted that national residential property prices will stall this year with a 1.1% increase, before climbing again next year to 8.6% above current levels by 2021.

Kashif said the number of property transactions in the country is currently down due to the Movement Control Order which freezes prices in place.

Yet, the industry is optimistic about a post-pandemic recovery and expects residential prices to rise by 8.6% by 2021, he added.

Meanwhile, Malaysia’s real estate market remains attractive to foreign buyers due to its strategic location.

The country’s close proximity to nations including Japan, China, Hong Kong and Singapore, which are home to the world’s largest cross-border property buyers, makes it appealing.

“For investors and first time home buyers, now is definitely a good time to consider getting into the market, as there are attractive discounts offered by developers,” Kashif stated.