Property Investment 101: Only Landed Homes Will Increase in Price Lah?!

Categories: Basics - Property Investment, Kuala Lumpur / Selangor Props

Property Investment 101: Only Landed Homes Will Increase in Price Lah?!

Price of the most popular noodle stall versus the less popular ones

Imagine there is a favourite noodle stall in town. Everyone loves it. The queue is long, and people are willing to pay RM10 for a bowl.

There are other noodle stalls nearby, but perhaps their noodles are not as delicious. They sell at RM7 or RM8.

One day, the popular stall increases its price to RM12. Do you think the other stalls will continue selling at RM7 forever? Perhaps not. If customers accept RM12 for the popular noodles, the other stalls may also increase their prices to RM9 or RM10.

But what happens when a new stall comes along with even better noodles at RM7? Suddenly, customers have another choice, and the existing stalls may need to rethink their prices.

Property prices can work in a similar way. Demand, competition and what buyers are willing to pay all matter.

Prices of popular car brands versus less popular ones

Look at popular car brands in Malaysia. A market leader may be able to charge a premium because buyers trust the brand, like its design or believe it offers better value. That’s why a brand which has been selling the SAME model for close to 10 years can still price its cars at a premium versus a new model.

When the market leader launches a more expensive model, competing brands may also adjust their pricing. However, they cannot simply increase prices whenever they want. Buyers still compare features, quality, reliability and affordability.

Property is similar. A highly sought-after neighbourhood may command a premium because of its location, amenities, accessibility and reputation. Other neighbourhoods may benefit if buyers are priced out of the most popular locations and start looking nearby.

But remember, not every property can follow the market leader indefinitely. If buyers do not see the value, they may simply choose something else.

Property prices in the city centre versus the suburbs

Many people would love to live near their favourite shopping mall, workplace or popular lifestyle destination. When demand is strong and suitable land is limited, property prices in these locations may rise.

What happens when buyers can no longer afford to live right next to their favourite destination?

Perhaps they look for a home five minutes away by car. If that is still too expensive, they may consider somewhere ten or fifteen minutes away.

This is one way demand can spread to surrounding areas.

However, the nearby location must still offer something buyers value. Good roads, public transport, schools, employment opportunities and amenities can help. An area that is further away but has poor connectivity may not benefit in the same way.

What does the latest NAPIC data tell us?

According to the National Property Information Centre (NAPIC), Malaysia’s average house price reached RM506,317 in Q2 2026, based on preliminary data. Yet annual house-price growth slowed to just 0.9%, while prices fell 0.5% compared with the previous quarter. This tells us that the market was not rising as quickly as it had in earlier years.

The differences between states are also worth noting:

Johor: annual house-price growth of 3.6%.
Kuala Lumpur: annual growth of 2.7%.
Pulau Pinang: annual growth of 0.2%.
Selangor: annual decline of 1.1%.

The property market is not one single market. Even within a state, different locations and property types can perform differently.

What about landed homes versus high-rise properties? NAPIC’s Q2 2026 data showed that the national terraced-house price index increased by 1.1% year-on-year. High-rise prices, meanwhile, had their own varied performance across different locations. For example, the high-rise index in Kuala Lumpur fell 4.1% year-on-year, while Selangor recorded a 6.8% increase.

The lesson? It is not enough to say landed homes always increase in price while high-rise properties do not. The actual location, supply, demand and price paid matter.

Source: NAPIC — Malaysian House Price Index, Q1–Q2 2026.

What are the lessons?

#1 — Popular locations can command a premium.

Just as some people are willing to pay RM2 more for their favourite noodles, property buyers may pay more for a location they genuinely prefer. But there must be a limit to what they can afford and what the property is worth to them. This is why there’s no such thing as a never-ending price increase. There’s a ceiling up to a certain point and consolidation will happen prior to prices moving up again.

#2 — Look beyond the most expensive neighbourhood.

If a preferred area is beyond the budget, consider nearby locations with good access to jobs, amenities and transport. A property does not need to appreciate at exactly the same rate as the most popular neighbourhood to be a worthwhile purchase.

#3 — Do not assume every landed home will increase in price.

Landed homes in desirable, mature locations may benefit from limited land supply. But a landed property in the wrong location or purchased at an excessive price can still disappoint. High-rise homes can also perform well when demand is strong and supply is appropriate. If we do some research, we can also find landed homes where the prices have moved far less than another sought after condominium, despite it being landed versus condo.

#4 — Buy the right property at the right price.

NAPIC’s national figures describe broad market movements. They do not guarantee what will happen to a particular property. Buyers should examine comparable transactions, rental demand, competing supply, maintenance costs and their own ability to hold the property over time.

If we buy the wrong property, whether landed or high-rise, the outcome may not be good.

Even when the stock market rises, not every share performs well. Even when the economy grows, not every business benefits equally.

Property investment is no different.

There is no guarantee that every property will rise in value. Choosing not to invest also carries risks, but that does not mean we should rush into buying.

Understand the market, understand the property, and understand our own finances.

Happy managing and understanding, yeah!

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