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This article is provided by IQI real estate negotiatorsJean Tay, 20 years of real estate investment experience and Nazry Nordin, trainee real estate agent with 6 years of industry experience. Currently serving as a team leader, he mainly focuses on the primary market, especially in the Melaka area.
Did you know that “Malacca” has been searched 300 million times on WeChat in China and becoming a trend recently?
The Melaka state government expects that this trend will attract 1 million Chinese tourists to Malaysia, boosting the local economy and tourism industry.
Since Melaka is being discussed internationally, is now a good time to invest in property there?
Everything about Malacca’s Property
- Overview of Melaka’s Property Market
- Melaka has the lowest average house price in Malaysia
- Affordable Housing Options in Melaka
- Flexible Airbnb Rules in Melaka
- Land Reclamation Drives Property Demand
- Infrastructure and Development in Melaka
- Ideal Retirement City for Foreigners
- Is Melaka a popular choice for local investments?
- What areas should investors consider?
Overview of Melaka’s Property Market
Introduction to the Market Dynamics and Trends
Melaka’s property market has experienced steady growth in recent years, driven by increasing demand for housing and commercial spaces.
The average price of properties in Melaka has been steadily increasing, with a median price of RM 450,000 for apartments and condominiums. The market is expected to grow, driven by government initiatives to develop the state’s infrastructure and tourism industry.
Bukit Beruang, a popular area in Melaka, has seen a significant increase in property prices due to its proximity to the city center and amenities.
Properties in this area are highly sought after, with many interested buyers looking for apartments and condominiums with modern amenities.
Melaka has the lowest average house price in Malaysia
According to the latest data from the National Property Information Centre (NAPIC), the average housing price in Melaka is only RM207,600 as of Q3 2024.
This makes Melaka the state with the lowest housing prices in Malaysia over the past four years!
There are currently over 1,200 properties available for sale in Melaka, catering to potential buyers seeking a variety of options in the market.
Melaka’s housing prices are not only lower than most affordable condos in the Klang Valley, but they are also cheaper than homes in nearby towns like Muar and Seremban.
The national average house price during the same period was RM458,751, so Melaka’s homes cost just 45% of that.
Think about it, you could own TWO houses in Melaka for the price of ONE elsewhere.
Additionally, landed property in Melaka has significantly risen over the past five years, jumping from RM399,000 in 2019 to RM550,000 in 2024.
If you were a savvy investor who purchased a landed property in 2019, you would have already seen an increase of RM150,000 in value. For those who missed the opportunity, property values in Malacca are still increasing, so it is not too late to begin investing in Malacca’s real estate!
Affordable Housing Options in Melaka
Exploring Budget-Friendly Properties
For those looking for affordable housing options in Melaka, there are several areas to consider. Taman Bukit Cheng, Taman Paya Rumput Perdana, and Taman Krubong Jaya offer a range of budget-friendly properties, including apartments and condominiums, with prices starting from RM 200,000.
Studio apartments are also a popular option for first-time buyers, with prices starting from RM 150,000. These apartments are often located in newer launches and offer modern amenities, making them an attractive option for those looking for affordable housing.
Flexible Airbnb Rules in Melaka
With the arrival of tourists, both local and international, the Airbnbmarket in Melaka has experienced steady growth.
Unlike in some other states in Malaysia where running Airbnb services is illegal, Melaka has more relaxed rules for Airbnb.
For example,in Penang, property owners can only run Airbnb services if their properties have a commercial title under the Housing Development Act (HDA).
However, residential titles don’t qualify.
In Melaka, whether your property is residential or commercial under the HDA, you can rent it out on Airbnb.
Just remember, before starting your Airbnb business, you’ll need permission from your neighbors on both sides.
This straightforward process encourages property investors to list their properties on Airbnb.
It is a fantastic opportunity to earn significant short-term rental income during peak tourist seasons.
So, which property attracts Melaka investors the most?
In Melaka, a wide range of properties are available for Airbnb, including condominiums, service apartments, terrace houses, semi-detached houses, and bungalows. There are currently over 200 properties available for sale that are suitable for Airbnb in Melaka.
But which type of property do tourists prefer the most, and consequently attracts Melaka investors?
Bungalows with swimming pools are highly favored because renters who come with large families enjoy having this facility.
Undoubtedly, a swimming pool is a key attraction for Airbnb guests.
Spacious properties that can accommodate up to 20 people is definitely ideal for family gatherings or team-building events.
Land Reclamation Drives Property Demand
The Melaka reclamation project is currently underway at the Straits of Melaka.
This ambitious project will add around 1,300 hectares of new land for development.
One major initiative is the Melaka Waterfront Economic Zone (MWEZ), which covers 25,000 acres of reclaimed coastal land.
MWEZ plans to turn this area into a vibrant hub that combines business, tourism, education, and residential life.
Meanwhile, it also creates numerous job opportunities for locals and foreigners and enhances rental stability in the area.
As a result, land reclamation has significantly increased demand for both commercial and residential properties in the region. New properties will be listed for sale in Melaka as the project progresses.
If you’re considering investing in Melaka, now is undoubtedly the best time!
Infrastructure and Development in Melaka
Impact on Property Values and Demand
Melaka’s infrastructure and development have a significant impact on property values and demand. The state government has invested heavily in developing the state’s infrastructure, including the construction of new roads, highways, and public transportation systems.
These developments have made Melaka a more attractive place to live and work, driving up demand for properties in the area. The average price of properties in Melaka has increased by 10% in the past year, with some areas seeing even higher growth.
The development of new amenities, such as shopping malls and entertainment centers, has also contributed to the growth of the property market in Melaka. These amenities make the area more attractive to buyers and renters, driving up demand and prices.
Overall, Melaka’s property market is expected to continue growing, driven by government initiatives and infrastructure development. With a range of affordable housing options available, Melaka is an attractive option for those looking to buy or rent a property in Malaysia.
Ideal Retirement City for Foreigners
Many locals see Melaka as their ideal retirement city because of its laid-back lifestyle.
But did you know that Melaka is also attractive to foreigners seeking a peaceful retirement life?
There are currently numerous properties available for sale that are suitable for retirees in Melaka, offering a variety of options for potential buyers.
In addition to its relaxed pace of life, the cost of living in Melaka is relatively low compared to other states in Malaysia.
An example of a foreigner moving to Melaka is Saira Hayati, a TikToker from the United States.
She discovered Melaka’s relaxed lifestyle during a visit and fell in love with it.
Then, she approached Nazry to purchase property and settle down in Melaka.
MM2H Program (Updated in 2024)
Exciting news for foreign investors!
In June 2024, the Malaysian government revised the Malaysia My Second Home (MM2H) program requirements.
This program offers extended visas to foreign nationals, allowing them unrestricted entry and exit from Malaysia.
Source Jabatan Imigresen Malaysia
The updated requirements aim to attract wealthy individuals who can make positive economic contributions, particularly through property investment.
At the same time, it appeals to retirees seeking a cost-effective and tranquil place to enjoy their retirement.
Now, the application process for the MM2H program has also become simpler for foreigners!
Is Melaka a popular choice for local investments?
Foreigners see it as a good option, but are locals thinking the same?
Yes, locals also invest in property in Melaka! Many locals opt to purchase homes in Melaka for retirement, foreseeing that property prices in the region may become less affordable in the next 10-15 years.
Many locals opt to purchase homes in Malacca for retirement, foreseeing that property prices in the region may become less affordable in the next 10-15 years.
Local investors can stay updated on new properties listed for sale in Melaka by subscribing to notifications and market updates.
With relatively low prices, they can enjoy the amenities, relaxed lifestyle and scenic beauty that Melaka offers.
There’s simply no other retirement investment spot in Malaysia quite like Melaka, which is why both foreigners and locals love it!
What areas should investors consider?
You may have made the decision to invest in Melaka, but which parts of Malacca are suitable for investment?
Let me give you some ideas!
1. Tourist area
If you’ve visited Melaka, you’ll know that tourist spots in Malacca are always busy on weekends and holidays.
Investing in properties in tourist areas could attract many tourists looking for accommodations near attractions.
Walking also helps you avoid heavy traffic jams in town!
Plus, these areas have good amenities like transportation and stores.
There are currently over 200 properties available for sale in the tourist areas of Melaka, providing ample options for potential buyers.stores.
2. Industrial area
Other than tourist areas, properties in industrial area are also worth investing in.
Due to the ongoing expansion and construction of factories, property transaction volumes in Melaka’s industrial areas are high.
Each new factory brings a surge of job opportunities, so does the number of workers, driving up rental rates.
There are more than 150 properties available for sale in the industrial areas of Melaka, catering to the growing demand.
In industrial areas, the rent for an unfurnished three-bedroom property is about RM800 to RM1000, while a furnished one rents for RM1000 to RM1500.
An added bonus for investors is the high rental stability in these areas. Since industrial jobs are relatively stable, tenants tend to opt for long-term rentals.
This means that buying a house in an industrial area ensures strong rental demand and a steady rental income.
3. Properties near toll roads
Another area worth considering for investment is properties near toll roads.
This type of property offers significant transportation benefits, linking Melaka to major states like Kuala Lumpur, Johor, and Singapore.
Living near toll roads in Melaka makes travel easier and greatly reduces commuting time, which is ideal for frequent travelers between Melaka and other cities.
This advantage also enhances property value, making it a potentially successful investment!
Below locations are near to tolls roads:
- Ayer Keroh
- Krubong
- Cheng
With the strong support of the Melaka government, more people are expected to come to Malacca for investment, travel, and possibly to enjoy their retirement life.
Such good news for the Melaka property market!
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If you need advice on property investment, whether in Malacca or elsewhere, IQI real estate negotiator can assist you!
FAQ
1. Why invest in Melaka?
Melaka presents a compelling investment case due to its unique blend of historical significance, strategic location, and ongoing development. As a UNESCO World Heritage City, Melaka attracts a steady stream of tourists, fueling demand for various property types, from hotels and vacation rentals to residential properties. Its proximity to major transportation hubs and other key Malaysian cities enhances its accessibility and economic potential. Furthermore, government initiatives aimed at infrastructure improvement and economic diversification contribute to a positive investment climate, making Melaka an attractive prospect for those seeking long-term growth and potential rental income.
2. Can foreigners buy property in Melaka?
Foreigners can generally purchase property in Melaka, although certain regulations and restrictions may apply. While Malaysia welcomes foreign investment in its real estate sector, specific property types, such as Malay Reserve Land, are typically restricted to Malay citizens. Additionally, minimum purchase prices and other conditions may vary depending on the type of property and its location within Melaka. It is essential for foreign buyers to engage legal counsel specializing in Malaysian property law to navigate these regulations, ensure compliance, and facilitate a smooth and secure transaction.
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