Kuala Lumpur Rental Market

Kuala Lumpur rental market
By The Hospitable Team

Thinking about investing in a short-term rental in Kuala Lumpur but aren't sure whether this city is good for Airbnb? To help you make an informed decision, in this article, we'll share some insights into Kuala Lumpur's dynamic vacation rental market that offers enticing opportunities for investors.

Why Kuala Lumpur?

The capital of Malaysia, Kuala Lumpur, is also the country's largest city, filled with gleaming skyscrapers and colonial architecture. It is also known for its cultural diversity, good food, and unique sights. It's also one of the fastest-growing metropolitan areas in Southeast Asia in terms of population and economic development. Moreover, Kuala Lumpur offers a higher standard of living at a more affordable cost than other major cities in Southeast Asian countries.

All these factors make Kuala Lumpur an attractive tourist destination for domestic travelers. For example, statistics show that in 2023, approximately 22.23 million domestic tourists visited the city.

As Malaysia's capital and major business hub, Kuala Lumpur also attracts many international tourists and business travelers, making it an excellent spot for Airbnb investments. Some of the best areas in Kuala Lumpur to buy an Airbnb property are KLCC (Kuala Lumpur City Center), Mont Kiara, Bangsar, and Damansara Heights.

With a relatively accessible housing market, Kuala Lumpur is a more affordable option for real estate investment than major cities in such countries as Hong Kong or Singapore. Still, you should remember that the investment threshold for foreign property ownership in Kuala Lumpur is MYR 1 million ($243,152).

As Malaysia's tourism sector recovers from the COVID-19 pandemic, buying a home in Kuala Lumpur for a holiday rental is a great way to generate extra income. The key to success is to find a property with a high earning potential and manage it effectively while focusing on providing an exceptional guest experience.

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Kuala Lumpur Short-Term Rental Market: Key Stats

As of October 2024, there are around 28K short-term rental properties in Kuala Lumpur listed on Airbnb, including 13K apartment rentals and 960 houses.

Stats from Key Data reveal that professional hosts dominate the Kuala Lumpur Airbnb rental market. Only 31% of Airbnb listings are managed by individual and small hosts with 5 or fewer properties. At the same time, 25% of units are managed by professional hosts with 6-20 properties, and 44% of listings are managed by business hosts with more than 20 properties.

The average daily rate (ADR) for Airbnb properties in Kuala Lumpur in 2023 (Jan 1 - Aug 18) was $51, which is 6% higher than it was in 2022 ($48). In 2024 (Jan 1 –Aug 18), the ADR was $53, 3% higher than in 2023. So, compared to 2022 (Jan 1 - Aug 18), we see a notable increase in average daily rates in 2024.

While 2022 presented some challenges regarding occupancy rates, we also saw significant growth over two years. In 2023 (Jan 1 - Aug 18), the paid occupancy rate in Kuala Lumpur was 33%, showing a 23% increase compared to paid occupancy rates in 2022 (27%). In 2024, the paid occupancy rate was 37%, 12% higher than in 2023.

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