While Malaysian renters and investors saw a welcome period of stability in the first quarter of 2025 as residential condominium rents held steady across most budget tiers, Kuala Lumpur continued to command the highest average rents in the country.

According to Juwai IQI co-founder and group chief executive officer Kashif Ansari, the average monthly rents in Malaysia showed little fluctuation year-on-year, signalling a balanced market. This finding is based on an analysis of over 4,500 IQI rental transactions across the country per quarter.

“Across Malaysia, average monthly rents in all four price brackets (affordable, mid-market, premium and luxury) moved in either direction by no more than 1.5% compared to a year earlier.

“That signals a balanced market without sharp swings. It is a relief to both investors and renters,” Ansari said.

Despite relative rent stability, Kuala Lumpur (KL) remains Malaysia’s most expensive rental market across all price categories. While its premium over national averages is modest in most tiers, it stands out more significantly in the affordable segment.

Average monthly rents nationwide by price bracket are:

> Luxury (RM7,501 and above): RM10,172.

> Premium (RM5,001–RM7,500): RM6,338.

> Mid-market (RM2,501–RM5,000): RM3,409.

> Affordable (below RM2,500): RM1,674.

KL’s average rent in the affordable segment was RM1,808, 8% higher than the national average. This suggests even budget-conscious renters in the capital city face steeper costs than their peers elsewhere.

A market defined by stability

Across the board, rental prices have proven resilient, reflecting both supply-demand equilibrium and confidence among landlords and tenants.

Premium homes, those renting for RM5,001 to RM7,500, posted minor increases to a new national average of RM6,344.

In KL, premium rents inched up 0.5% , while Selangor saw a slightly higher increase of 1.1%.

According to Ansari, the figures reflect enduring demand from professionals and affluent renters who continue to prioritise lifestyle conveniences, space and location.

At the entry level, affordable rentals below RM2,500 remained largely unchanged nationwide.

Notably, Selangor bucked the trend with a 3.2% increase in this segment, underscoring growing rental demand from cost-conscious households and new job seekers entering urban areas.

Meanwhile, the mid-market bracket, covering rents from RM2,501 to RM5,000, saw a slight dip of 1.4% nationally.

This minor correction opens a window for upgraders seeking larger or better-located homes without hurting overall yields for landlords.

“While Malaysia has an extensive rental market at the higher price range, it is the entry-level affordable tier of properties that accounts for the greatest number of leases. That is as it should be and suggests the rental market is responding to demand.

“Sub-RM2,500 leases accounted for nearly nine out of 10 transactions in our data set. That underscores Malaysia’s attractiveness to young households and working families,” said Ansari.

Future outlook

Looking ahead, the rental market is forecasted to continue its gentle gains trajectory over the next 12 months, supported by monetary policy stability and consistent demand in key regions.

Given that Bank Negara has lowered its overnight policy rate to 2.75%, financing costs will be slightly lower, too, which is expected to boost home buyers and investor confidence.

This could lead to a more competitive rental market with an increased supply of properties, but also potentially drive up rental prices due to heightened demand.

Nevertheless, KL is expected to lead rental growth in the coming quarters, buoyed by urbanisation, economic activity and limited supply in certain submarkets.

Selangor, in contrast, is expected to hold flat, stabilised by its deeper rental base and steady commuter demand.

In Johor, growing integration with Singapore, especially through the under-construction RTS Link and the Johor-Singapore Special Economic Zone initiatives, is expected to attract new residents and yield-seeking investors.

These cross-border developments could help push rental yields upward, particularly in Johor Baru’s newer high-rise developments.

Nationally, rental growth is projected to remain within a 1% to 3% range over the next three quarters.

What to expect

By rental price tier, different segments are likely to perform at varying speeds:

> Affordable: Expected to remain broadly stable as incoming supply matches demand. This tier continues to dominate the market in volume.

> Mid-market: Poised for a moderate increase, supported by wage growth and population migration into urban hubs like the Klang Valley and Johor Baru.

> Premium: Forecasted to grow by 2% to 4% due to a return of expatriates and restricted new supply.

> Luxury: Anticipated to stay steady, buoyed by limited stock and affluent tenant profiles.

KL’s resilient core

KL’s continued reign as the most expensive rental market is underpinned by strong fundamentals: high employment concentration, international connectivity, lifestyle offerings, and a maturing high-rise residential market.

The capital’s pricing reflects not just real estate values but its status as the epicentre of commerce, culture and convenience in Malaysia.

Importantly, the city’s rental advantage appears sustainable.

Even where KL’s rent premiums seem narrow, only 1% above national averages in most tiers, the sheer density of activity, demand for proximity and scarcity of central locations keep prices elevated.

This dynamic also highlights the capital’s nuanced rental landscape. While luxury units in KL do not drastically outprice those in other major global cities, affordability becomes relatively harder to access, with budget-tier tenants facing notably higher base costs.

KL’s position at the top of the rent ladder serves as a reminder of the city’s central role in the nation’s residential economy and a barometer for how urban demand, migration and affordability trends will shape Malaysia’s property sector in the quarters ahead.