There are three main types of real estate categories in Malaysia: residential, commercial, and industrial.
Residential properties are those used for housing and non-commercial purposes such as condominiums and terrace houses. More than half (65.2%) of the real estate transactions in H1 2020 belong to this category, so out of all three categories, residential properties are the most sought after. At the same time, residential properties have the largest overhang of more than 31,000 units in H1 2020. This means that while it’s a buyer’s market, owning a residential property may not bring very lucrative returns in rental income or resale value at the moment, as there’s plenty of competition to keep prices down. One note to add is that if the property you're eyeing is Green Building Index-certified, you can get a preferential green residential property loan that’s lower than the usual rates.
Commercial properties are those used for business activities such as shop lots and office units. Locations in busy neighbourhoods are almost guaranteed a steady rental demand and yearly appreciation. The downside is that a brick and mortar space is becoming obsolete for many industries. Reselling or renting out a commercial property could become a challenge with the current preference for work-from-home arrangements.
Industrial properties are used for manufacturing or production purposes, such as factories and warehouses. These properties may have a smaller market, but once a tenant is secured, they usually stick around longer due to the more permanent nature of industrial businesses.