Gross yield is the first number every property investor should calculate. It is also the number most investors calculate wrong — or worse, do not calculate at all. They buy based on "feel," agent enthusiasm, or the developer's projected returns (which are always optimistic). Then they discover their RM600,000 KL condo yields 3.2% while a RM300,000 Ipoh apartment yields 6.5%. Same country, double the return.
This guide provides state-by-state rental yield benchmarks for Malaysia, explains why yields vary so dramatically, and shows how to use this data to make better investment decisions.
The National Picture
Malaysia's residential rental yields are moderate by global standards. Average gross yields range from 3% to 7% depending on state, property type, and micro-location. The broad pattern:
- Higher yield states: Perak, Sarawak, Penang Mainland, Negeri Sembilan
- Moderate yield states: KL, Selangor, Johor, Sabah, Melaka
- Lower yield segments: Premium locations in any state (Bangsar, Mont Kiara, Penang Island prime)
Yield and price move inversely. Cheap properties in secondary markets yield more. Expensive properties in prime markets yield less. This is the fundamental tension in property investment — high yield areas often have lower appreciation, and high appreciation areas often have lower yield.
State-by-State Yield Reference
Kuala Lumpur
| Property Type | Typical Gross Yield | Price Range (RM) | Notes |
|---|---|---|---|
| Condos (city center) | 4.0-5.5% | 400,000-1,200,000 | KLCC, Bukit Bintang, TRX |
| Condos (mid-ring) | 4.5-5.5% | 300,000-700,000 | Cheras, Kepong, Setapak |
| Condos (premium) | 3.0-4.0% | 800,000-3,000,000+ | Bangsar, Mont Kiara, Desa ParkCity |
| Landed (terrace) | 2.0-3.0% | 600,000-1,500,000 | Taman Tun, Bangsar, Hartamas |
| Landed (semi-D/bungalow) | 1.5-2.5% | 1,500,000-5,000,000+ | Low yield, appreciation play |
KL is a tale of two markets. City center condos yield reasonably well (4-5.5%) because rental demand from professionals, expats, and students is strong. Premium landed properties yield poorly (2-3%) because prices are driven by capital appreciation expectations, not rental income.
Selangor
| Property Type | Typical Gross Yield | Price Range (RM) | Notes |
|---|---|---|---|
| Condos (PJ/Subang) | 4.0-5.0% | 300,000-800,000 | Mature areas, strong demand |
| Condos (Shah Alam/Setia Alam) | 4.5-5.5% | 250,000-500,000 | Growing townships |
| Condos (Cyberjaya) | 5.5-7.0% | 200,000-400,000 | Data center demand pushing rents |
| Landed (PJ/Subang) | 2.5-3.5% | 500,000-1,500,000 | |
| Landed (Shah Alam/Klang) | 3.0-4.0% | 350,000-800,000 | Higher yield in less premium areas |
Selangor offers the widest yield range in Malaysia. Premium PJ condos yield 4%. Cyberjaya condos yield 6.5%+. The difference is price, not rent — both areas command similar absolute rents, but Cyberjaya's lower prices produce higher percentage yields.
Johor
| Property Type | Typical Gross Yield | Price Range (RM) | Notes |
|---|---|---|---|
| Condos (JB city) | 4.0-5.5% | 250,000-600,000 | Demand from Singapore commuters |
| Condos (Iskandar Puteri) | 4.5-6.0% | 200,000-500,000 | RTS catalyst pending |
| Condos (Iskandar oversupply areas) | 3.0-4.5% | 200,000-400,000 | High vacancy depresses effective yield |
| Landed (JB) | 2.5-3.5% | 400,000-1,000,000 | |
| Landed (secondary towns) | 3.0-4.0% | 250,000-600,000 | Batu Pahat, Muar, Kluang |
Johor's condo market is bifurcated. Well-located units near JB Sentral and the upcoming RTS Link yield 5-6%. Oversupplied developments in Forest City, Danga Bay, and parts of Medini sit 30-50% vacant. Average yield means nothing in Johor — location within the state determines everything.
Penang
| Property Type | Typical Gross Yield | Price Range (RM) | Notes |
|---|---|---|---|
| Condos (Georgetown/island) | 3.5-5.0% | 400,000-1,200,000 | Tourism + expat demand |
| Condos (island mid-range) | 4.0-5.0% | 300,000-600,000 | Tanjung Tokong, Batu Ferringhi |
| Condos (mainland/Butterworth) | 4.5-5.5% | 200,000-400,000 | Lower prices, decent rents |
| Condos (Batu Kawan/mainland new) | 5.0-6.0% | 200,000-350,000 | Industrial zone demand |
| Landed (island) | 2.0-3.0% | 800,000-3,000,000+ | Land scarcity = appreciation play |
| Landed (mainland) | 3.0-4.0% | 300,000-800,000 |
Penang Island is supply-constrained (limited land). Prices are high, yields are compressed. The mainland, especially around Batu Kawan (new industrial zone near second bridge), offers materially better yields at 40-60% lower entry prices.
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Perak (Ipoh)
| Property Type | Typical Gross Yield | Price Range (RM) | Notes |
|---|---|---|---|
| Condos | 5.0-7.0% | 150,000-350,000 | Low entry, solid rental demand |
| Apartments | 5.5-7.5% | 100,000-250,000 | Highest yields in peninsular Malaysia |
| Landed (terrace) | 3.0-4.5% | 200,000-500,000 | |
| Shophouse | 4.0-6.0% | 300,000-800,000 | Old town tourism-driven |
Perak consistently delivers the highest residential yields in peninsular Malaysia. The reason is simple: property prices are 50-70% below KL/Selangor levels, but rents are only 30-40% lower. The price-to-rent ratio strongly favors investors.
The trade-off: capital appreciation in Perak is slower. You earn more monthly income but build equity more slowly.
Melaka
| Property Type | Typical Gross Yield | Price Range (RM) | Notes |
|---|---|---|---|
| Condos (Melaka Raya/city) | 4.0-5.5% | 200,000-500,000 | Tourism + local demand |
| Condos (Ayer Keroh) | 4.5-5.5% | 200,000-400,000 | |
| Landed | 3.0-4.0% | 250,000-600,000 |
Melaka is a small, stable market. Tourism drives short-term rental demand, while a growing local economy supports long-term tenancies. Yields are above the national average due to moderate pricing.
Sabah (Kota Kinabalu)
| Property Type | Typical Gross Yield | Price Range (RM) | Notes |
|---|---|---|---|
| Condos | 4.0-5.5% | 250,000-600,000 | Expat + oil and gas demand |
| Landed | 2.5-3.5% | 400,000-1,200,000 |
KK's rental market is driven by oil and gas workers, expats, and tourism operators. Yields are moderate but tenancy can be unstable — dependent on commodity cycles.
Sarawak (Kuching)
| Property Type | Typical Gross Yield | Price Range (RM) | Notes |
|---|---|---|---|
| Condos | 4.5-5.5% | 200,000-450,000 | Underappreciated market |
| Apartments | 5.0-6.0% | 150,000-300,000 | |
| Landed | 3.0-4.0% | 300,000-700,000 |
Kuching is one of the most underrated property markets in Malaysia. Low prices, stable government-sector rental demand (state capital), and minimal oversupply create consistent 5-6% yields. The downside: East Malaysia's property market is less liquid, and cross-state investment adds complexity (different land laws).
Negeri Sembilan (Seremban/Nilai)
| Property Type | Typical Gross Yield | Price Range (RM) | Notes |
|---|---|---|---|
| Condos | 4.5-6.0% | 150,000-350,000 | KLIA/university demand |
| Landed | 3.0-4.5% | 200,000-500,000 | Affordable alternative to KL |
Proximity to KLIA and several universities (USIM, INTI, Manipal) drives rental demand. Low entry prices create attractive yields.
Why Yield Varies by State
1. Supply and Demand Imbalance
States with property oversupply (parts of Johor, KL luxury segment) see compressed yields because prices stay high while rents fall. States with undersupply relative to demand (Ipoh, Kuching) see higher yields.
2. Price Levels
Yield is an inverse function of price. When prices run ahead of rents (which happens in speculative markets), yields fall. When prices stagnate but rental demand persists (Cyberjaya post-2015), yields rise.
3. Rental Market Depth
KL and Selangor have deep, liquid rental markets — millions of potential tenants. Vacancy risk is low. In smaller markets (Ipoh, Kuching, Melaka), the tenant pool is shallower. Higher headline yields may be offset by longer vacancy periods.
4. Economic Base
States with diversified economies (KL, Selangor, Penang) have more resilient rental demand. States dependent on a single industry (Terengganu — oil and gas, Pahang — tourism) face demand volatility.
Highest Yield vs Highest Appreciation: Often Inverse
| Category | Examples | Yield | Appreciation |
|---|---|---|---|
| High yield, low appreciation | Ipoh, Kuching, Cyberjaya | 5-7% | 1-3%/year |
| Moderate yield, moderate appreciation | Shah Alam, Cheras, Penang mainland | 4-5.5% | 3-5%/year |
| Low yield, high appreciation | Bangsar, Mont Kiara, Penang Island prime | 2.5-4% | 4-7%/year |
This is the classic yield-vs-growth trade-off:
- Yield investors (want cashflow now) should target Ipoh, Cyberjaya, Kuching, Penang mainland
- Growth investors (want appreciation) should target KL prime, Penang Island, mature Selangor
- Balanced investors should target mid-ring areas: Shah Alam, Cheras, Ara Damansara, Setia Alam
Neither approach is wrong. But buying a Bangsar condo and expecting cashflow is a mistake. And buying an Ipoh apartment expecting 6% annual appreciation is equally misguided.
How to Use This Data
Step 1: Know Your State's Benchmark
Before buying any property, know the state average yield for that property type. If your target property yields below the state average, it is overpriced for rental investment — you are paying an appreciation premium.
Step 2: Compare to the Benchmark
| Your Property's Yield vs State Average | Interpretation |
|---|---|
| +1% or more above average | Potentially undervalued — investigate why |
| Within 0.5% of average | Fairly priced |
| -0.5% to -1% below average | Appreciation premium priced in |
| -1% or more below average | Overpriced for rental investment |
Step 3: Investigate Outliers
If a property yields significantly above state average, ask why:
- Is the rent artificially high (above-market tenant who will leave)?
- Is the price artificially low (defects, legal issues, bad management)?
- Is it a genuinely undervalued asset (early stage of an area's development)?
If the fundamentals are sound, you have found a good deal. If the outlier is explained by risk, the yield premium is compensation for that risk — not a free lunch.
Step 4: Recalculate Every 2 Years
These benchmarks are not static. Yields shift as markets evolve. An area yielding 6% today may yield 4% in 3 years if prices rise faster than rents. Revisit your portfolio's yield annually and compare against current benchmarks.
State-by-State Summary Table
| State | Condo Yield Range | Landed Yield Range | Best Yield Area |
|---|---|---|---|
| Kuala Lumpur | 3.0-5.5% | 1.5-3.0% | City center mid-range |
| Selangor | 4.0-7.0% | 2.5-4.0% | Cyberjaya, Shah Alam |
| Johor | 3.0-6.0% | 2.5-3.5% | JB city near RTS |
| Penang (Island) | 3.5-5.0% | 2.0-3.0% | Mid-range Georgetown |
| Penang (Mainland) | 4.5-6.0% | 3.0-4.0% | Batu Kawan |
| Perak | 5.0-7.5% | 3.0-4.5% | Ipoh apartments |
| Melaka | 4.0-5.5% | 3.0-4.0% | Melaka Raya |
| Sabah | 4.0-5.5% | 2.5-3.5% | KK city |
| Sarawak | 4.5-6.0% | 3.0-4.0% | Kuching |
| N. Sembilan | 4.5-6.0% | 3.0-4.5% | Nilai/Seremban |
For the methodology behind yield calculations, read our rental yield calculation guide. For understanding the difference between gross yield and net cashflow, see gross yield vs net cashflow. For state-by-state mortgage breakeven analysis, check rent vs mortgage by state. And to calculate yield for any specific property, use the cashflow calculator.