First of all, the location itself is the main factor that will affect property values ​​in Malaysia. If a property is near a school, shopping mall, bank, transportation hub, hospital, restaurant, church, temple, airport, or any other place that can provide comfort for people staying in that area, that particular property will definitely have a tall property. value that will attract more people than any property.

When it comes to real estate, the principle of supply and demand refers to people’s ability to pay for real estate along with the relative scarcity of real estate. The property value will be boosted by the high demand condition along with a certain purchasing power and a shortage of supply due to the scarcity of land. Conversely, property values ​​will drop as people demand less as more supply enters the market.

Take, for example, Penang, being the second smallest state in Malaysia just after Perlis in terms of geographic coverage, but it is the eighth most populous with 1.56 million residents according to the 2010 Malaysian Population and Housing Census, which it is done every ten years. Penang, which has an average of 1,490 people per square kilometer, is the second most densely populated state after Kuala Lumpur. This high level of population density puts competitive pressure on land use, resulting in an increase in property prices, as developers will place more expensive price tags on their projects due to high costs of the earth. In addition, the attractiveness as a tourist destination and second home for foreign retirees is also one of the factors that translates into increased demand for properties in Penang. As a result, shortage due to land shortage and high demand from foreign and local buyers is the main reason why property prices in Penang are high compared to, say, Kelantan.

Apart from supply and demand, Feng Shui and Vasthu Sastra, which is known as the “science of construction”, also have to do with property values ​​in Malaysia. Regardless of what you believe or not, many recent studies have shown that property prices will continue to be affected by Feng Shui. A property located near a body of water can offer you an attractive price compared to a property that is not. A property facing a road junction or built on a cul-de-sac may be priced lower compared to another property in the same area that is not. Many people trust Feng Shui because they believe that keeping things related to Feng Shui will bring constant growth, prosperity, good luck, good health, happiness, and positive energy to the home, office, or being. In this way, people will carefully consider the position and location of the property, which in turn makes a well-located or well-designed property more attractive and favorable.

Then inflation also has an impact on property values ​​in Malaysia. At its most basic level, inflation is simply a rise in prices and a fall in the purchasing power of money. Let’s take an example; again using Penang, where the latest news was announced that “the sale price of properties in Penang will soon increase by 5% to 10% after the recent move by Lafarge Malayan Cement to increase cement prices by approximately one 6% “according to the House of Penang developers. An increase in the price of cement simply means that the price of concrete shingles, cement and sand bricks and all other cement-related products will increase. On average, 50% of building materials used in property development, including cement and cement-related products. Therefore, such inflation will lead to an increase in construction costs and the buyers are the ones who ultimately bear the cost. In addition, inflation has also been caused by increased transportation and labor costs at the national level. The rising cost of labor is particularly due to labor shortages, as many Indonesians have returned to Indonesia and face strict laws and regulations when they want to return to Malaysia.

The government’s introduction and review of its property-related policies also played a key role in determining property values. The revision of the real estate income tax (RPGT) exemption has increased the interest of a small group of people in the real estate market. In addition, the Malaysian government is pushing through a series of incentives to make its real estate market more attractive to foreign investors that will eventually generate external cash flows. Both actions have improved property values. Additionally, the build and sell (BTS) concept has been revised. It has increased buyer confidence and created developers who are more conservative, leading to higher property values.

In addition, the existence of real estate agents and the Internet, such as auction websites and real estate agent websites, help to facilitate the process of selling properties today. It has made real estate investing easier, more convenient, and more favorable. In this way, there is an increase in interest in real estate investment, which further raises the value of the properties.

In addition, the mortgage rate, which also plays an important role in influencing the value of the property, should never be forgotten. A mortgage rate is commonly known as a Malaysian Basic Loan Rate (BLR). BLR is a term that refers to the minimum interest rate used by banks. It is defined by the central bank of Malaysia. The BLR will go down when the global money market is down and will rise when the money market is trending up. Whenever housing demand is weak, lower mortgage rates will help improve access to home financing and lower your monthly home loan payment. So these circumstances will help strengthen the demand for housing and then the property value will increase over time.

Last but not least, vacancy levels will also have a significant contribution to property values ​​in Malaysia. For example, when the unemployment rate is high, buyers and investors will not have enough capital to invest in a property, creating a situation of strong rental sales. On the contrary, the low unemployment rate will motivate buyers and investors to get involved in real estate investment activity, which will eventually lead to higher property values.

These are some of the factors that will affect property values ​​in Malaysia. However, there are still some other relevant and important factors worth looking at.