Rahim & Co: Melaka’s residential property prices gradually rising, industrial sector may face oversupply

• Rahim & Co International Property Consultants Sdn Bhd director of research Sulaiman Saheh: “The market in Melaka is known to be very proactive in controlling the house price mechanism, which if you compare among all the states in Malaysia, the most affordable in terms of income to price ratio is actually Melaka.”

MELAKA (May 7): Residential property prices have been rising steadily in Melaka over the past years, recording an average transacted price of RM340,000 in 2024 compared to RM214,000 in 2015, according to Rahim & Co International Property Consultants Sdn Bhd director of research Sulaiman Saheh at the Rahim & Co Property Market Review 2024/2025 presentation on Wednesday.

“We can observe that the Melaka market is actually growing. With that growth, there is increasing demand and hence the [increase in] prices. But if the prices grow too fast, detaching itself from the affordability level, then it will lead to poor affordability, which is not the case here.

“The market in Melaka is known to be very proactive in controlling the house price mechanism, which if you compare among all the states in Malaysia, the most affordable in terms of income to price ratio is actually Melaka,” he said.

Sulaiman also highlighted that the state recorded an all-time high for volume and value of property transactions last year. Melaka recorded 20,321 in volume of transactions and RM6.7 billion in value in 2024 compared to 16,869 volume and RM5.8 billion in value in 2023. He said this translates to a growth of 20.5% for volume and 15.5% for value of transactions.

On his outlook for the Melaka residential sector this year, Rahim & Co senior manager of valuation services Fiqri Rohaizad said landed properties in particular have been performing well, demonstrating significant potential for capital appreciation.

“Concurrently, the high-rise residential market is showing signs of stabilisation in both demand and supply, with prices adjusting accordingly,” he added.

The industrial sector, on the other hand, is expected to grow due to government initiatives and incentives. However, Fiqri cautioned that there is a concern about oversupply.

“The question is how much absorption [of supply] can we take because a lot of developers nowadays are favouring industrial projects, and it has become the darling sector. In the past, we recognised the industrial sector as an economic generator...But when everybody does it, that could lead to an oversupply. This is exactly what happened to the retail sector, especially the cloud-based retail sector,” Fiqri said.

He also pointed out that due to the oversupply of industrial properties in Melaka, occupancy rates in some areas have yet to recover.

For the commercial sector, Fiqri said it appears more stable compared to previous years, with occupancy rates gradually beginning to improve. He added that popular brands in the Klang Valley such as Jaya Grocer, Uniqlo, Padini and fast food chains are starting to set up shop in Melaka.

Meanwhile, Fiqri provided some notable development areas in Melaka. In the northern region, he mentioned Masjid Tanah Perdana, Anjung Ayer Paabas, Desa Bertam, Bertam Heights, Anjung Sungei Petai, Krubong Heights and Scientex Durian Tunggal. In the central region, he listed the German Technology Park, Impiana Kesang, Gapam Perdana, Anjung Gapam, Serambi Gapam, I-Molek and Molek Residence.

For Melaka's southern region, he pointed to Scientex Jasin Mutiara Botani Parkland, Scientex Bandar Jasin, Taman Merlimau Mutiara and Taman Muhibbah. Fiqri added that the southern region of Melaka poses more potential for growth.

“In the map, the land heading towards Jasin is marked green, which might make it seem like there's no development potential. But actually, that land was previously owned by major plantation companies.

“Those plots of land have been sold, and now we can see that development is starting to happen. These future developments are also only a short drive away from town. That’s why I believe there’s strong potential, especially in this area,” he explained.

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