Lower-priced high-rise properties recorded a higher rental yield of above four per cent in the first half of 2020 (H1 2020), compared to landed properties like terrace homes, which recorded a rental yield of 3.43 per cent.
Condominiums and serviced residences recorded rental yields of +4.17 per cent and +4.03 per cent respectively while terrace houses recorded a +3.43 per cent yield.
This is based on demand data analysis for residential property by iProperty.com.my.
Due to the unprecedented situation caused by Covid-19, more property seekers had considered rental options.
"This could explain the increasing number of both visits and listings for Kuala Lumpur's rental market compared to H1 2019, resulting in a more modest demand decline of -2.9 per cent in the capital city, said Premendran Pathmanathan, general manager of customer data solutions, REA Group Asia (iProperty.com.my)
Pathmanathan said due to the Covid-19 outbreak, the overall H1 2020 national rental demand declined by -5.6 per cent.
He said it should be noted that the transition from the Movement Control Order (MCO) to the Conditional MCO (CMCO) followed by the Recovery MCO (RMCO) has allowed for a gradual economic and social recovery from mid-May onwards.
"This observation is supported by the recovery in property interest during the CMCO phase when the government relaxed various mobility restrictions and property viewings were permitted again," he said.
Pathmanathan said property seekers were especially interested in rental properties with asking rental prices ranging between RM1,500 to RM2,000 per month.
"Due to the unfortunate circumstances caused by Covid-19, many Malaysians are more inclined to rent than buy. As a result, the need for rental demand data for residential property has never been more timely to gauge consumers' interest as they look for more affordable and flexible housing options.
"Real-time rental property data can be hard to come by for property investors, landlords, and industry professionals as there is currently no rental database in Malaysia. Rental data is extremely important for all stakeholders. Landlords use it to price their properties accordingly and to stay competitive, while tenants can leverage on it to help them determine the best place to live, based on their personal needs," Pathmanathan said.
In Kuala Lumpur, among the areas with the best rental yield in H1 2020 were Pantai, Brickfields, Taman Tun Dr Ismail, and Wangsa Maju.
Selangor's rental demand figures experienced a similar marginal decline of -1.2 per cent, due to the increasing number of listings surpassing the increase in visits. For H1 2020, Ulu Kelang was the fastest-growing area with an impressive +44.21 per cent increase in year-on-year (YoY) demand growth.
Pathmanathan said a large number of rental property seekers in Selangor were searching for condominiums with an asking rental price of RM2,000 per month and below.
"Rental demand in Selangor has shifted to suburban areas such as Ulu Kelang, Bangi, Klang, Rawang, and Semenyih due to their affordable prices. Within these areas, property seekers were mainly looking for high-rise residences with low-entry prices," he said.
Meanwhile in Penang, although there were higher user visits and listings in H1 2020, the overall rental market demand in the northern state declined by -13.7 per cent. This was due to the higher number of listings compared to the number of user visits. The MCO also contributed to the decline in rental demand as the closure of both state and international borders has affected the short-term rental accommodation market in Penang.
Bukit Mertajam and Ayer Itam are popular with local property seekers looking at rental options below RM1,000 per month.
In Bukit Mertajam, property seekers were looking for terrace houses and condominiums while in Ayer Itam top on the list were apartments and condominiums.
Johor's rental demand fell by -19.5 per cent in H1 2020 due to the number of listings that outweighed the number of user visits. Nevertheless, the median asking rent for Johor (RM1,400 per month) was still lower compared to other major states in the country.
Iskandar Puteri recorded the fastest growing YoY demand at +35 per cent mainly because its rental listings were reduced by half, especially for the condominium segment.
Many property seekers were looking for rental properties below RM2,500 per month in Iskandar Puteri. Johor's most in-demand rental area, Pasir Gudang, garnered the highest rental yield in the state with terrace houses being the top rental option, Pathmanathan said.
