Introduction
Due to the unaffordability to own a house, many would think that renting is a cheaper option for people to shelter themselves, especially in cities such as Kuala Lumpur, where renting is not uncommon.
Two main questions one should have thought about are what housing types are available to rent, and even if it is cheaper to rent compared to owning, would it be affordable?
Using salary data from the Department of Statistics Malaysia (DOSM) as well as rental price data from the National Property Information Centre (NAPIC), this article delves deeper to answer the questions above in the context of Kuala Lumpur housing market.
An Affordable Rental Expenditure
Based on the Housing Cost Burden (HCB) approach, the ideal and healthy housing expenditure must not be more than 30% of household income1. It is a rule of thumb to consider that housing costs are affordable when they are less than 30% of gross income, whether for owning or renting2. Adopting the HCB approach, let us see, what would be the income threshold to rent affordably in Kuala Lumpur?
First, what housing units are available for rent?
To analyse rental affordability in Kuala Lumpur, we examine the rental data for two housing categories: 1) Apartments/Condominiums and 2) Serviced Apartments. We assume these categories represent the predominant housing stocks in Kuala Lumpur's rental market, making it essential to assess the affordability of rental prices within them. The rationale behind this assumption is as follows3:
1. As of the third quarter of 2025, the two housing categories of apartments/condominiums and serviced apartments make up more than half of the existing housing stock in Kuala Lumpur, with 45% classified as apartments/condominiums and 20% as serviced apartments.
2. Although serviced apartments are categorised as commercial properties, it is well-known within the property industry that they are often used for residential purposes4. In fact, management bodies have been established by residents within this category, similar to those in typical strata-residential properties. Therefore, in Malaysia, serviced apartments should be included in any analysis of housing stock, especially in urban areas like Kuala Lumpur.
3. Over the past decade, in Kuala Lumpur, the number of condominiums and high-rise apartment units has increased by 103%, while the number of serviced apartments has surged by more than 400%.
4. Importantly, these two housing categories are the only ones that have consistently recorded an increase in existing supply each year for over a decade in Kuala Lumpur. In comparison, the third largest category—low-cost flats—accounts for 14% of the existing stock as of Q3 2025, but no additional units have been added since 2017. While low-cost housing is often considered “affordable,” the lack of new supply means there are limited units available for rent.
These indicate that both categories would play an important role in the residential transaction in Kuala Lumpur, including in the rental market. Most likely, the available units for renting in the rental market are from these two categories.
So, is it affordable to rent in KL?
Drawing on the latest 2024 salary/wage data from the Department of Statistics Malaysia (DOSM), we estimated the Housing Cost Burden (HCB) ratio for an individual earning the highest median monthly salary reported for that year to rent an apartment/condominium or a serviced apartment. An average-salaried individual in Kuala Lumpur is likely to encounter significant challenges in securing an affordable housing unit to rent .
An individual with a monthly salary of RM3,6875 is able to afford a unit in 45 out of the 420 housing projects from both apartment/condominium and serviced apartment types available for rent in Kuala Lumpur. Within the affordability range, rental prices span from RM700 to RM1,100, representing approximately 19% to 30% of the individual’s gross monthly income.
In terms of location, the 45 ‘affordable’ projects are almost equally scattered in four mukims, in Kuala Lumpur. The mukims are: 1) Batu with fourteen projects, 2) Mukim Kuala Lumpur with eleven projects, 3) Setapak with ten projects, and 4) Petaling with nine projects.
Overall, the apartment and condominium segment in Kuala Lumpur offers a higher proportion of affordable rental units compared to serviced apartments. Of the 109 serviced apartment projects surveyed, only five recorded a rental price at or below 30% of the maximum monthly median salary in 2024. In the serviced apartment category, the lowest rental price is RM1,000, recorded at the Kiara Designer Suite project, located in Mukim Batu. This amount constitutes approximately 9% of the maximum median monthly salary in Kuala Lumpur in 2024. To meet this rental cost without exceeding the 30% HCB benchmark, a tenant would need a disposable income of at least RM3,333.
In contrast, 40 out of 311 apartment/condominium projects fall within the same affordability threshold. The lowest rental price recorded is at Sentul Park in Mukim Batu, at RM 700. Such a price would require a tenant to have a minimum disposable income of approximately RM2,333 to ensure the HCB ratio is not above 30% at RM 700 costs.
Our analysis here is limited to rental data within apartment/condominium and serviced apartment projects as reported. In reality, households consider various factors when choosing a unit, such as size, number of rooms, and available facilities. Even if these factors were taken into account, it is highly likely that the actual rental burden would be even harsher than what the statistics indicate so far.
Conclusion
Many would have thought renting is a cheaper option than owning a house, especially in a big city like Kuala Lumpur. This article argues that the cost of renting an apartment/condominium and a serviced apartment, which are likely the most available units for rent, is generally not affordable.
Of course, renting decision will largely depend on a personal budget and individual preference. However, market data suggests it is time for policymakers to care about the rental sector's affordability and accessibility to available units. The bigger policy concern is that renting should be promoted as a functioning tenure6 in the housing market, along with ownership, not just because it is cheaper than owning a house. There will be a demand for rental stocks to fit an individual's needs, and both markets (renting and owning) should exist to create a viable housing market, especially in a city.
Thus, an affordable housing market, either for ownership or to rent, should be a targeted outcome in any housing policies.
