December 06, 2024 6:16AM
Top Property Hotspots in Malaysia for 2025 Development
As Malaysia looks ahead to 2025, the housing market is poised for transformation. Emerging trends and regional hotspots are reshaping the landscape, presenting fresh opportunities for developers, investors, and homebuyers alike. Our recent Vodus Housing Demand Research Survey 2024 has uncovered valuable insights into shifting buyer preferences, emerging growth areas, and demand drivers that are expected to redefine real estate development in the coming year.
Malaysia’s housing market is set for a major shift. Regions like Sabah and Penang are seeing strong demand, with home seekers facing critical gaps in housing supply. Is your business positioned to tap into these opportunities? Read on to discover which areas are expected to drive growth in 2025, the types of properties in demand, and where the greatest market potential lies.
The full market report offers a more in-depth analysis of buyer demographics, regional demand patterns, budget ranges, and buyer preferences—insights that can guide strategic decisions for developers and investors in 2025.
Key Regional Trends Shaping Malaysia's Housing Market in 2025
The Vodus Malaysia Housing Demand Report 2024 reveals several key regional trends that will shape Malaysia’s housing market in the coming year. Among the states with the highest proportion of homebuyers planning to purchase in the next 12 months, Sabah, Penang, and Terengganu lead the way. These areas show a strong intent to buy, signaling significant demand and offering valuable opportunities for developers to target. However, while Johor and Penang are experiencing strong buyer interest, both regions are also facing a housing overhang—indicating a great mismatch between supply and demand. This suggests that while there is interest, the available properties may not align with buyer expectations, particularly in terms of price, property types, or location. In contrast, the East Coast states of Terengganu and Kelantan are seeing high unmet demand, especially for affordable housing. The shortage of government-backed affordable housing projects in these states presents a potential gap that could be addressed by targeted development.
Sabah: A Growing Market for Young Families
Sabah is experiencing a surge in demand for landed properties, driven by young buyers, particularly from native East Malaysian communities such as the Kadazan and Bajau. Many of these first-time homebuyers are eager to settle down and invest in property, seeking larger homes with flexible layouts to accommodate their growing families and multi-generational living needs.
As urbanization and infrastructure improve, particularly in Kota Kinabalu, demand is also rising in suburban areas, presenting developers with opportunities outside the city center. In addition, Sabah’s growing tourism market offers potential for vacation homes and rental properties, making serviced apartments and resort-style developments increasingly attractive.
A rising preference for sustainable homes—with energy-efficient designs and eco-friendly features—reflects a shift toward more responsible living.
By catering to the growing trend of first-time homebuyers in both urban and suburban areas, developers can meet the demand for practical and accessible housing solutions that align with the needs of this emerging market.
Penang: A Hotspot for Homebuyers with Clear District Preferences
Penang remains one of the most attractive markets for homebuyers in Malaysia. The Timur Laut district (including George Town and Tanjung Bungah) stands out as the top choice for potential buyers, especially first-time buyers and young professionals. These buyers show no clear preference between landed homes, condominiums, and apartments, indicating flexibility in their choices as they look for both affordable and stylish options.
On the mainland (Seberang Perai), there is a stronger preference for landed properties, which suggests that more spacious homes are in demand, particularly among those looking for family-friendly living or greater privacy. Moreover, buyers in both Timur Laut and Seberang Perai Selatan tend to have higher budgets, indicating that there is strong demand for higher-end homes in these areas for the new high-tech factory workers.
In Penang, developers can capitalize on demand by offering a range of properties. In Timur Laut, focus on luxury apartments and condominiums, while in Seberang Perai, prioritize spacious, family-oriented landed homes. This approach will cater to both mid-range and high-end buyers, tapping into the diverse needs of the market.
Terengganu: A Promising Market for Young Malay Homebuyers
Terengganu's housing market is seeing strong growth, particularly among young buyers under 35, mostly from the M40 income group. This demographic is driving demand for landed homes that offer space, privacy, and the flexibility to accommodate growing families. With many looking to settle down and start families, terrace houses, semi-detached homes, and bungalows are especially popular for their larger floor plans and outdoor areas.
A key trend is the rise of multi-generational living, where families prefer homes that can accommodate extended family members, such as grandparents. This cultural preference is pushing demand for larger homes with more bedrooms and adaptable layouts.
While buyers are seeking affordable housing, there's also growing demand for mid-range properties as income levels increase. Government-backed initiatives, like affordable housing schemes and low-cost financing options, are helping to further drive homeownership.
With a limited supply of larger, family-oriented homes, Terengganu offers a strong opportunity for developers to provide affordable, spacious landed properties. By focusing on family-friendly options like terrace houses and semi-detached homes, developers can cater to the growing demand from young buyers seeking more space and flexible living arrangements.
Kelantan: A Growing Market for Established Family Living
In Kelantan, the housing market is largely driven by homebuyers mostly from the M40 group, who are looking for landed properties as land is more affordable in Kelantan as compared to other parts of Malaysia. There is a notable increase in demand for properties in suburban areas that combine comfort and convenience—ideal for family living. As this demographic looks for stability and long-term investment in their homes, Kelantan presents a market for developments focused on family-oriented housing solutions.
The high demand for family-oriented housing in Kelantan is also influenced by the insufficient government initiatives, including affordable housing schemes and subsidies aimed at supporting homeownership for middle-income families. This has provided additional access to properties for young families looking to settle down, making Kelantan an attractive option for those in search of affordable housing with a suburban lifestyle.
For developers, this emerging trend represents a promising opportunity. With relatively low competition in comparison to more urbanized regions like the Klang Valley or Penang, there is significant potential for targeted developments that meet the needs of family-oriented buyers. The market is ripe for the creation of homes that provide a sense of space, safety, and community—ideal for long-term investment and family living.
Johor: A Dynamic Market with Growing Demand in Key Urban Areas
Johor’s housing market is seeing strong demand, particularly in Johor Bahru, which attracts a significant portion of homebuyers to the state. Other areas like Iskandar Puteri, Pasir Gudang, Skudai, and Batu Pahat/Muar are also witnessing growing interest.
The market is predominantly driven by homebuyers aged 25-34, a group seeking more space and family-friendly living. In Iskandar Puteri, buyers show a clear preference for landed properties that offer larger floor plans and outdoor areas, catering to the demand for more privacy and flexibility. Meanwhile, in Pasir Gudang, there is a balanced interest in both landed homes and apartments, indicating a varied market with opportunities for both low-rise and high-rise developments.
As Johor continues to develop as a key economic and urban hub, especially with its proximity to Singapore, there is increasing demand for both affordable and mid-range housing options. Developers can capitalize on this by focusing on family-oriented developments, mixed-use projects, and affordable housing schemes to meet the needs of a diverse buyer pool. Additionally, sustainable housing options that emphasize energy efficiency and green living features are becoming more attractive to environmentally conscious buyers.
Despite strong demand, Johor faces a housing overhang, presenting a chance for developers to focus on aligning supply with buyer needs by offering the right property types at competitive prices in the most sought-after locations.
Klang Valley: A Key Market with High Demand and Extensive Development
As Malaysia’s economic hub and home to the nation’s capital, Klang Valley continues to experience high housing demand, despite the region having the highest population in the country. The area has seen a significant volume of housing developments, which has led to a proportionally lower level of unmet housing demand as compared to other states. However, demand remains robust in key urban centers, driven by both residential buyers and investors seeking to capitalize on the area’s growth.
The KL City Center emerges as the top choice for homebuyers, followed by Shah Alam, and Subang Jaya, all of which continue to attract significant buyer interest. Other sought-after locations within the Klang Valley include Kota Damansara, Cyberjaya/Putrajaya, and Bandar Utama—each offering a unique mix of residential options catering to a diverse demographic.
In Klang Valley, developers can capitalize on ongoing demand in key urban centers. Despite a high volume of housing developments, demand remains strong, driven by both residents and investors. Developers can focus on offering a range of properties, from high-end developments in prime locations to more affordable options in growing suburban areas, catering to the region's diverse demographic.
As Malaysia’s housing market heads into 2025, key regions like Sabah, Penang, and Johor are set to see significant demand driven by younger homebuyers and a rising need for family-friendly properties. Meanwhile, areas like Terengganu and Kelantan are poised for growth due to a lack of affordable housing options. With Klang Valley’s ongoing development and robust demand, these emerging and established markets are all ripe for strategic investment.
For developers, investors, and homebuyers looking to navigate the evolving landscape of Malaysia’s housing market, Vodus Malaysia Housing Demand Report 2024 provides a comprehensive analysis of housing demand across all states, including key buyer preferences, property types, budget ranges, and regional trends. Download the full Market Report now to gain a deeper understanding of these market dynamics and make informed decisions for 2025.