In a country where property is often seen as the ultimate status symbol, is buying a house really the smartest financial move? As Malaysians grapple with stagnant wages, high debt, and a volatile economy, the age-old belief in home ownership as a guaranteed asset is facing serious questions. We unpack both sides of the debate—and why it matters now more than ever.
For generations, Malaysians have been taught that buying a house is one of the most important milestones in life—a symbol of success, financial stability, and adulthood. Property ownership is deeply embedded in our cultural DNA, often seen as the cornerstone of “settling down.” Government campaigns, bank marketing, and family expectations have all reinforced this belief: owning is better than renting.
But in 2025, with the economy in flux, cost of living rising, and wages still relatively stagnant, this long-held assumption is being called into question. Is buying a home in Malaysia still a wise investment—or is it becoming a liability in disguise?
The Case for Ownership: Building Equity and Legacy
There’s no doubt that property can still be a powerful asset. For many Malaysians, especially those who purchased homes before the 2010s, real estate has delivered long-term capital appreciation and steady returns. According to the National Property Information Centre (NAPIC), Malaysia’s overall house price index rose by 27% over the past decade, despite occasional dips due to market cycles and the pandemic.
Home ownership also offers a level of emotional and financial security. Fixed monthly mortgage repayments—especially if locked in at low interest rates—can feel more predictable than rent, which is subject to market forces. And unlike renting, homeownership allows individuals to build equity over time, which can later be tapped into through refinancing or selling.
Moreover, there's the intergenerational aspect. Property remains one of the most common assets passed down to the next generation. For parents, buying a home isn’t just a financial decision—it’s a form of legacy planning.
The Flip Side: Depreciating Value, Debt Burden, and Liquidity Risks
But the dream of homeownership doesn’t always play out as planned. Many first-time buyers today are facing a very different reality. Property prices in urban centres—especially in Klang Valley, Penang, and Johor Bahru—have become increasingly detached from income levels. Bank Negara Malaysia estimates that the median house price is 4.7 times the median household income, well above the international affordability benchmark of 3.0.
This affordability gap is driving younger Malaysians into long-term debt traps. The average tenure for housing loans in Malaysia has increased to 35 years, the maximum limit allowed by regulators. While this may reduce monthly repayments, it significantly increases the total interest paid over time.
Then there’s the issue of overhang. As of Q3 2023, Malaysia had over 26,000 unsold completed residential units—many of which are in the high-rise segment. In some areas, particularly in KL and Iskandar, buyers who purchased new condos in the mid-2010s are now struggling to sell or rent them at prices even close to their original value. For these owners, property is no longer an appreciating asset—it’s an illiquid liability.
Unlike stocks or other financial assets, real estate isn’t easy to sell. Transactions can take months, and in a slow market, years. If a homeowner is faced with financial hardship—job loss, divorce, medical emergencies—the property may not provide the safety net it once promised.
Petrol Subsidies, EVs, and Suburban Migration: A Shifting Landscape
An interesting angle to consider is how infrastructure and lifestyle trends are reshaping the equation. Government fuel subsidies continue to make suburban or semi-rural living more viable for middle-class Malaysians who might otherwise feel priced out of major cities. Yet, if subsidy reforms take effect—as hinted in the 2024 Budget—this could make long commutes more costly and urban property more desirable again.
At the same time, new highways, digital infrastructure, and the expansion of public transportation corridors (like the MRT3 Circle Line) are altering the value dynamics of traditionally “fringe” areas. For those with foresight and patience, buying into developing townships along these corridors may still offer upside potential—but that requires both liquidity and a long-term view.
Should You Rent Instead? The Case for Flexibility
On the flip side of the conversation is a growing camp of urban professionals who argue that renting makes more sense in today’s economy. Renters enjoy flexibility—they can move cities or even countries in pursuit of better job opportunities without being tied down by property.
Moreover, the rental market in Malaysia remains relatively affordable. A young couple might pay RM2,200 a month to rent a condo in Mont Kiara worth RM800,000—far below what their monthly mortgage would be, factoring in interest, maintenance, quit rent, and sinking fund payments.
The idea of renting, saving the difference, and investing in diversified assets—stocks, ETFs, or even REITs—is gaining traction among Malaysia’s financially literate middle class. While it doesn’t offer the emotional fulfilment of home ownership, it does offer greater agility and arguably better returns, especially in a slow-moving property market.
Conclusion: It’s No Longer a One-Size-Fits-All Answer
So, is a home in Malaysia an asset or a liability? The truth is, it depends. For those who buy below their means, in the right location, with a long-term horizon and stable income, property can still be a reliable asset. But for others, especially those stretching finances to buy overpriced or poorly located homes, the risks may outweigh the rewards.
What’s clear is that the default advice of “just buy property—it will appreciate eventually” no longer holds water in every context. Malaysians—especially younger buyers—need to adopt a more analytical, data-driven, and personalised approach to property decisions. Whether you choose to buy or rent, the key is to be clear about your goals, risks, and financial flexibility.
In 2025, homeownership is no longer just a rite of passage—it’s a strategic choice. And like all investments, it demands more than just blind faith.
Kevin Wu is the editor and focuses on curating stories and articles relevant for the modern-day business owner and corporate leaders in the South-east Asia region. More about Kevin Wu.
