Juwai IQI co-founder and group CEO Kashif Ansari said for the first time in a year, the annual growth rate has accelerated rather than slowed.

He said the Malaysia Home Rental Index moves with the flow of rental property supply and demand, seasonal shifts, the influx of international students, and investor activity.

“Our earlier forecast was that rental rates would climb moderately from 0% to 3%, but the index has already increased by 3.9%, more quickly than expected.

“We now update our forecast and project the Home Rental Index to increase at an annual rate of 5.5% by Q1 2025,” he said in a statement.

In Kuala Lumpur, rents are 44% higher than the national average, with a 51% premium over Selangor’s average rent.

“Families seeking more affordable homes or to increase their disposable income can reduce their expenses by half by choosing areas with lower rents,” he said.

Kuala Lumpur not only has the highest average rent but also saw the strongest rental growth in the last quarter, rising by 5% to RM2,863.

Meanwhile, Selangor’s rents remained largely stable, increasing by just 1%.

“The RM1,899 average rent in Selangor is 5% higher than the two-year trend.

“Looking ahead, we expect rents in Selangor to moderate from its current pace to an approximately 3% growth,” he said.

Citing data from Juwai IQI’s partner, Global Property Guide, he said the average gross rental yields for investors remained at 5.2% in Q2 2024.

“Gross rental yields also remained largely stable nationwide since the last quarter.

“We examined yields in eight locations: Johor Bahru, Iskandar Puteri, Petaling Jaya, Subang Jaya, Shah Alam, Ipoh, Kuala Lumpur, and George Town,” he said.

The IQI Malaysia Home Rental Index analysed over 70,000 residential rental transactions between 2018 and Q2 2024.

Looking forward, he said economic growth or policy changes at home or abroad could impact yields in Malaysia.

“Our forecast is for stability or a gradual increase in gross rental yields as we move towards 2025,” added Kashif.