Malaysian property: Kuala Lumpur's weakness offsets regional hot spots

Is economic uncertainty stemming from an unsettled global trade environment starting to hit the Malaysian property market, at least in the nation's biggest city? Year-on-year house-price growth slowed sharply to a 0.7% pace in August -- a four-year low. Meanwhile, the number of unsold residential units continues to rise; the last year-on-year inventory drawdown took place in March 2024.

A closer look reveals regional differences, which we can explore in granular detail with CEIC's ASEAN Premium Database.

The aggregate price movement is mainly driven by the slide in Kuala Lumpur. (The capital's falling prices have actually helped reduce the number of unsold units, as our first chart shows.)

We can make a link to investment flows, which have shifted notably toward areas outside the capital. The state of Kedah, perhaps best known for the resort island area of Langkawi, has seen the strongest investment and residential price growth. Investment flows are also notable supports to housing prices in Johor and Pinang.

We can also examine related sectors. In tandem with the fall in residential property prices, shopping centers in the Klang Valley (roughly, the broader Kuala Lumpur agglomeration) have seen rent growth trend lower.

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