Media Release: STRONG OUTLOOK FOR TERRACED HOUSES IN 2025: EXPERT
Kuala Lumpur, 13 November 2024 — Industry experts expect Terrace houses to perform well in 2025, according to new insights released today by Irhamy Ahmad MRICS, Chartered Valuation Surveyor and CEO and Founder of Irhamy Valuers International, a part of Juwai IQI.
“We expect up to 5% price growth in terraced houses by December 2025,” he said. “That would mean terraced houses outperform other house types in 2025, just as they did in 2023.
“Terrace housing is widespread in Malaysia, especially in Kuala Lumpur and the Klang Valley suburbs.”
Recent Strength
“Growth of 5% by the end of next year represents stronger performance than in the past year. In the 12 months through the second quarter of 20 24, the official terraced house price index from NAPIC climbed just 1.1%. However, in 2023 overall, terraced house prices jumped by 3.7%.
“Terraced houses are generally one of the better residential performers. In 2023, that 3.7% growth in terraced house prices was higher than for any other house types that year. High rises were the second-best performers in 2023 with 3.6% pride growth, followed by semi-detached houses at 2.3% and detached houses at 1.4%.
“Over the long term, the terraced house price index has significantly outperformed other residential types. Since 2010, the all house price index climbed by 118.7%. The index for high rise houses performed even better, climbing by 112.7%.
“But terraced house prices soared even higher, by 144.4 %. Semi-detached and detached houses had the slowest price growth, 191.8% and 168.3% respectively.
“All that growth has made the average price for a terraced house in Malaysia today is RM453,343. Despite racking up the best track record of growth, terraced houses are not the highest priced type of home.
“The most expensive house type today is semi-detached, with an average price of RM718,599, closely followed by detached houses, with an average price of RM643,387. High rises have the lowest average price, RM367,201.
Corner Houses Especially Prized
“Double-story corner terraced houses are the most desirable type of terraced house. They have a special place in the property market.
“A corner terraced house typically has extra land over and above the standard 22 x 75 feet lot (1,650 square feet). The standard corner lot has a total area of between 3,000 square feet and 3,500 square feet in size.
“Corners are especially popular because of the extra land and the fact that they have neighbours only on one side. That gives ample opportunities for renovation and a more expansive space for residents.
“The extra desirability means that the pricing for corner terraced lots sits between that of standard terraced houses and semi-detached houses, often at the higher end of this range.
“We increasingly see buyers of second-hand corner terraced houses adding a third floor to the typical two-story building, creating a total of more than 4,000 square feet of built-up area.
“The highest prices for corner lot terraces are in Taman Tun Dr Ismail and Bandar Utama. Corner lots will always be attractive as they are always in short supply.
The Economy Will Boost Terraced Houses
“Our forecast for up to 5% growth in terraced house prices in 2025 is based on perennial demand
for this type of home and on projections about Malaysia’s economic growth.
“The economy will grow steadily in 2025, with a GDP expansion of around 5%, supported by robust performance across key sectors such as manufacturing, trade, commodities, and construction. This growth, combined with Bank Negara Malaysia’s likely decision to maintain the policy rate at 3%, creates a favourable environment for real estate. The 3% rate, considered neutral, supports stable borrowing costs without fuelling inflation, expected to remain within a manageable range of 2% to 3%.
“For the residential real estate market, steady economic growth and stable interest rates mean good conditions for both buyers and renters. In 2025, two main trends are expected to shape the market: the rise of mixed-use developments and the government’s push for affordable housing. Mixed-use developments, which combine residential, commercial, and recreational spaces, appeal to buyers looking for convenience and integrated lifestyles. The focus on affordable housing will drive new construction of homes priced below RM300,000, making housing more accessible.
“In particular, terraced houses stand to benefit from these trends, as their affordability and appeal in integrated townships make them an attractive option in a growing, stable economy. Overall, 2025 looks strong for Malaysian residential real estate, with terraced houses poised for solid performance.
— end of media release —
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