This is because such properties are more affordable, the renters want more space, or they intend to work from home.

Conducted by iProperty.com, a leasing and buying website, the study found that demand for rental properties in key markets dropped 5.6% between January and June, following the initial movement control order (MCO) imposed in March.

Kuala Lumpur and Selangor fared reasonably well despite the pandemic reducing overall demand, dropping just 2.9% and 1.2%, respectively.

However, Penang and Johor saw bigger reductions in demand – 13.7% and 19.5% compared with last year – with Penang being particularly affected by travel restrictions which forced owners of serviced apartments to flood the rental market with units no longer attracting Airbnb customers.

For all property types in the four researched locations, rental yields remained encouraging despite falling demand, averaging from 3.01% at the bottom end for terrace houses in Penang to 4.76% for condominiums in Johor.

In presenting the findings, iProperty.com’s general manager for customer data solutions, Premendran Pathmanathan, said while overall demand has gone down, the areas that have seen improved demand show how the desires of renters are changing.

“If you look at the top 10 most in demand and the top 10 growth areas, the outskirts are doing very well. People are gravitating towards the outskirts because it’s a bit more affordable.

“People also want space, you’re not going to get space in the KL city centre. People working from home want more space,” he said.

Looking forward to 2021, Premendran does not see this shift towards the outskirts changing, as companies allow employees to work from home, thus removing the need to rent in an area convenient for commuting.