There are various residential options in Malaysia today, more so than ever compared to the past, from which investors and homebuyers can choose. However, as housing development evolves with the current market demands, new concepts of residential buildings emerge. In return, it may create some confusion for property buyers, especially for first-time homebuyers.
Essentially, residential properties are categorised into landed and strata properties, built on residential land whereby they are protected by the Housing Development Act (HDA) to safeguard the interests of buyers.
Nevertheless, there are some strata properties that are built on commercial land in which we will talk about later in the article.
What are the different types of high rise residential properties in Malaysia?
#1 Flat
In Malaysia, a flat is generally understood as low-cost residential property that is four to five stories tall with an average unit area of 700 sq ft. It is typically smaller in height and size as compared to an apartment and is lacking in leisure facilities.
Flats offer the most basic type of accommodation and typically do not come with any amenities or facilities. This means that there is no playground, gym, swimming pool, etc. whereby you would also have to go through the inconvenience of climbing five to six flights of stairs just to get to your unit.
In addition, flats are non-gated properties and do not have any guards to oversee the coming and going of visitors/strangers. The car parks are also outdoor, and are often inadequate, resulting in double parking within the compound and along surrounding roads. Hence, the risk of your vehicle being stolen or scratched.
So, if you are looking for a more secure property, then flats are definitely not for you. However, if you are someone that just wants to looks for a small cosy space and do not mind the drawbacks of flats, then this option might be the best for you since it is probably the cheapest high-rise building you can opt for.
#2 Apartment
Apartments are gated and guarded properties that are over five stories tall and have an average unit size of 550-1,200 sq ft. It is affordable housing with basic facilities such as a guardhouse, elevators, playgrounds, and maybe even a basketball court.
Apartments are one of the most common types of residential property nowadays, especially in high-density areas as it offers an opportunity for homeowners from diverse income groups. It is slightly more expensive than flats but is typically a lot affordable as compared to a condominium. Thus, the onsite facilities provided are also much more limited whereas it also lacks the extensive integrated public and social spaces of upscale condominiums.
Fun fact: Apartments are usually referred to as “flats” in the United Kingdom. *Clink!*
#3 Condominium
Condominiums are generally built on residential land. They have typical unit sizes of 1,110-4,700 sq ft. and are equipped with extensive recreational areas, multi-sport facilities, multi-tier security, an integrated design concept that is built for connectivity and associated with luxury.
In short, as we Malaysians would say, condominiums are the “atas version” of apartments.
With condos, the extensive facilities also come with higher monthly maintenance fees, sinking funds, and service charges. However, you’ll get to enjoy extra facilities such as a jacuzzi pool, sky deck, entertainment areas, various sports courts, and so on without even having to leave your residential compound. Furthermore, some upscale condos even offer extravagant facilities like a rock-climbing wall, boxing ring, skate park, etc.
#4 Serviced Apartments (aka Service Residence or Service Suites)
Generally, there is little difference between a condominium and a serviced apartment except for land type. Condominiums are built on residential land while service apartments are built on commercial properties. It is complete with extensive common facilities which are the same as condominiums.
Although they are built on commercial land, serviced apartments are governed under the HDA, just like any other residential development.
Serviced apartments are essentially residential properties built on commercial land, integrating commercial facilities with residential demands. Hence, most serviced apartments are either attached or built up on top of shop lots, shopping malls, or office units.
In some development, serviced apartments are equipped with unique services for their unit residents. For example, room service, housekeeping facilities, front desk concierge, etc. which is almost like a hotel. It also offers three-tier security and comes with indoor parking amenities.
These residential buildings seem like an ideal investment since they are typically located at strategic locations and are extremely convenient in terms of getting groceries/food. However, due to its location and services, the rental cost is usually higher. Residents are also required to pay higher utility bills, maintenance fees, and property assessment tax due to the associated commercial land title.
Do check out this article where we discuss the importance of HDA for residential properties built on commercial land.
In addition, purchasing a serviced apartment is probably not a wise choice if traffic triggers you. It is typically a higher-density building as compared to other residential buildings, resulting in more traffic. The sharing of building with commercial units also means that you would have less privacy and the cost to maintain common facilities becomes more expensive.
What is the difference between Flat, Apartment, Condominium and Service Apartments?
| Flat | Apartment | Condominium | Service Apartment | |
|---|---|---|---|---|
| Description | Very affordable, typically 4 to 5 storeys high, average size of 700 sq ft. | Broad price range, affordable middle-class property, average size of 550 to 1,200 sq ft. | High-end residential option, average size of 2,110 to 4,700 sq ft | Similar to condominiums, except built on commercial land |
| Pros | • Low-cost investment option • Low maintenance • Easy to manage | • Good starter homes • Lower maintenance fees than condominiums • Gated community • Basic facilities | • Gated community with 24-hour security • Indoor parking • Extensive facilities and integrated design • Affluent communities • More potential for appreciation | • Ideal for Airbnb • Extensive facilities • 3-tier security • Indoor parking • Convenient for grocery purchase and food hunting • Potential for good rental income |
| Cons | • Non-gated community • All outdoor parking • No recreational facilities | • Limited facilities • Less potential for appreciation • Some parkings are outdoors | • High starting price • High maintenance fees, sinking funds and service charges • Restricted by HOA rules | • High utility bills, maintenance fees • High quit rent and property assessment tax • High density, more traffic • Less privacy |
#5 Terrace, Link and Super Link House
Terrace, link, and super link houses are the same, landed properties built on residential land except for the differences in their built-up and land area. They are residential units built side by side in a row, in which its party walls are shared with the adjoining units.
These houses can be either one-, two- or even three stories high.
Terrace houses have the smallest built-up area (typically 750-1,600 sq ft) as compared to link and super link houses. It is considered to be one of the most affordable landed residential property types and tends to come with a lower price tag.
Hence, it is an ideal investment for buyers or for those who are planning to upgrade from high-rise to landed property. For investors, you would be happy to know that terrace houses appeal more to the general group of tenants due to their reasonable rental rate and ease of maintenance.
Link houses basically have the same structure as terrace houses other than the fact that they are bigger in terms of the built-up and land area. Likewise, super link houses have the biggest built-up size and are also the fanciest in contrast to the terrace and link houses.
It has a typical built-up area of 2,083-2,600 sq ft and normally comes with 5 to 6 bedrooms. In general, super link houses cost more than conventional terrace houses but are priced lower than semi-detached houses.
What is an end lot and corner lot of terrace developments?
An end lot is a house located at the end of a row of terraces and unlike corner lots, it does not have the benefit of additional land. Depending on the development and design, some end lots may have better ventilation and daylight thanks to the additional windows on the side of the house.
Nonetheless, end lots might be charged a premium over the usual intermediate lots due to the bigger land size.
I’ve also found that buyers tend to avoid purchasing end lots as many perceive them as the easiest units for break-ins since they are usually located next to a side alley and/or densely covered trees, shrubs, etc. which can aid robbers in their getaway. Moreover, there is not much to hope for in terms of privacy since the motorway or walkway beside the end lots results in a higher probability for peeping and glancing.
Corner lots are typically located at the corner of a row of terraces with additional land or a large garden. With these lots, you would not only have more daylight exposure and ventilation, but also the flexibility to upgrade, renovate and/or expand your house.
However, due to the benefits, corner lots usually have a higher asking price as compared to the other sub-types. It also requires more maintenance and upkeep for the landscaping.
#6 Semi-Detached House
A semi-detached house is a landed property that only shares 1 common wall with the adjoining units. Adjoining semi-detached units will typically mirror one another with the yard or free space being located at the side and back of the house.
Though they are not as glamorous or luxurious as a bungalow, Semi-Ds are considered high-end residential units due to their relatively spacious land and built-up area (2,300-5,600 sq ft). A Semi-D also offers a degree of privacy and space, making it suitable for a larger family or a family with pets.
#7 Bungalow and Zero-Lot Bungalow
Bungalows are standalone houses located on top of their own land and have no adjacent units, offering both privacy and luxury. Their built-up size usually varies from 2,000-12,500 sq ft, making it one of the biggest residential options.
They are said to be the crème de la crème when it comes to landed properties and is the dream of many homeowners. This is due to the huge garden that encircles the house, ample parking, spacious layout and the financial status attached to it.
Bungalows are commonly purchased by the wealthy whereby the prices differ depending on their land area and location. It is observed that many bungalow units are uniquely designed and built by the homeowners themselves on individual land. Nonetheless, there are also townships that offer bungalow units that are readily built.
A zero-lot bungalow has a similar concept as a bungalow except it is far smaller in terms of land size and the house is built to the side of the land as opposed to the center of the land to maximize the already limited space.
By doing so, it creates a compound with bigger space and provides more outdoor areas for the outdoor leisures.
#8 Cluster House
Essentially, cluster houses are a unique type of strata landed homes, structured in groups close to one another and can take on the form of terrace homes, semi-detached homes, or sometimes bungalows. These houses are built together in a gated community with common facilities for leisure.
In other words, the homes are built close together in a gated community with the remainder of the open land for shared facilities such as swimming pools, parks, and/or gymnasiums. In some cases, a clubhouse is introduced to tie the community together.
Cluster housing is a relatively new residential concept, However, it is growing in popularity among the younger generation due to the exclusivity, security, and facilities contained within the gated community. Generally, you are getting the services and amenities of a condominium but with a landed property.
The advantages of cluster houses include their 24/7 security systems. The low-density living also allows for more privacy since the facilities are divided among fewer people as compared to other high-rise strata properties. In addition, it is perfect for families with children as they are free to roam around in the open spaces and kid-friendly facilities without having to worry about their safety.
In regards to investment, cluster houses come with a higher price tag and usually targets the luxurious market segment. In addition, the monthly cost for maintenance is higher due to their strata title.
#9 Townhouse
A townhouse may look like a single house from the outside. In reality, it is two houses stacked on top of one another with separate entrances. It is sold as two separate units and is affordably priced as compared to the terrace or detached houses that are in the same neighbourhood.
Generally, the lower unit has a smaller built-up area but homeowners get to enjoy the convenience of entering the house from the ground level. Contrarily, homeowners of the upper unit own a bigger space but would have to enter their house through a side staircase.
Newer townhouses are typically part of the landed strata properties in Malaysia. This means that you, as an owner of a townhouse, are obligated to pay maintenance fees and sinking funds for the upkeep of the shared facilities such as the playground, security services, swimming pool, etc. Similarly, you are also required to adhere to the strict Homeowner’s Association (HOA) rules of what you can and cannot do in your townhouse.
However, unlike the high-rise residential buildings, you are not sharing a common entrance with other homeowners. Hence, you would still benefit from the same privacy one would get with landed property.
#10 Shophouse
Shophouses used to be popular back in the 19th to early 20th century, designed with architectural traits consisting of Southeast Asian characteristics during the colonial era.
Shophouses are generally two to three stories tall commercial properties built with a shop lot on the ground floor. The bottom floor is designed to accommodate commercial purposes while the upper floor(s) are used as residential areas.
Depending on the developer, the houses above may have residential titles but this is only if the developer has applied for it.
Though there are no longer many new shophouses being developed nowadays, business is still thriving for those who purchase run-down structures, refurbishing them into hotels, residential buildings, etc. Because of this, it is now popular saying that a redone shophouse can fetch a high price on the Southeast Asia real estate market.
What are the different types of units in high rise residential buildings?
Generally, high-rise residential units are marketed with various unit designs such as studio apartments, duplex, dual-key units, penthouse, SOHO, SOVO, and SOFO. These units can be constructed on any type of high-rise residential building and are more commonly found in condominiums and service apartments.
#1 Studio Apartment and Duplex (aka Loft)
Both studio apartments and duplexes are not ideal for families. Studio apartments and duplex have open layouts designed to be compact is more suitable for a single individual or a couple who enjoys complete privacy (free from housemates).
In Malaysia, these units are common in newer developments located in the city centre or at locations nearer to the city and/or major transportation links. The intention of these units is to maximize potential rental yield with single tenants or young couples.
A studio apartment is basically a self-sufficient single room residential unit with its bedroom, living room, dining room, kitchen, and bathroom being spread over a single floor. Everything is open plan except for the bathroom, which is the only ‘room’ that is closed off.
I personally love this concept since it makes housekeeping so much easier. Moreover, utility bills would also be cheaper as there are not many appliances to be kept running at the same time.
Side note: Studio apartment is one of the homes (but not limited to) that a dual key unit offers since its built-up size tends to be less than 1000 sq ft. on average.
A duplex or loft is similar in concept to the studio unit but is designed as a double-story unit with its bedroom located on the 2nd floor. It is slightly bigger than a studio apartment in which its built-up size ranges from 450-950 sq ft.
#2 Dual Key Unit
In general, a dual key unit gives access to 2 separate spaces under one title. It offers a studio apartment and a normal apartment, that are side by side and shares the same foyer area which leads to the main door.
Theoretically, it is like buying two houses for the price of one and can be rented out separately.
In Malaysia, there are various configurations for these units, depending on the developer. Some dual key units might share common areas such as the laundry area, kitchen, and living area while other units share only the main entrance. There are also multiple options regarding the unit size, e.g., a one-room dual key condo, a four-room dual key condo, or even a dual key penthouse.
These dual-key units are great if you’re thinking of owning a multigenerational home. Since it is a merge of two independent living spaces under one roof, you are still able to enjoy your freedom, privacy, and independence while living close by to family, literally just a door away.
Other than it being a multigenerational home, dual-key units can also be a great investment option. As the investor, you can choose to rent out the studio apartment while residing in the main apartment or vice versa. Contrarily, you can also opt to rent out both the studio and main apartment, allowing you to generate more income with just a single property.
#3 Penthouse
Penthouses are dubbed as a bungalow in the sky and are located on the top floor of condominiums or serviced apartments. The units are extravagantly designed with breathtaking views and usually occupy the entire floor or sometimes, two floors of the building.
It has an average built-up area of 1,000-5,000 sq ft. with its own private elevators (yay, no neighbours!) while more luxurious penthouses may even come with their own private swimming pools. Thus, they are considered the plushest high-rise residential properties. However, such luxury always comes with a price. Other than its hefty price tag, penthouses also charge one of the highest maintenance fees among other strata properties.
#4 SOHO, SOVO and SOFO
Small Office Home Office (SOHO), Small Office Versatile Office (SOVO), and Small Office Flexible Office (SOFO) are essentially referring to similar types of building units but with different names. They are small commercial units that integrate offices into residential homes.
As such, they are subjected to commercial assessments, quit rents, telephone and utility charges which are pricier than residential-titled properties as it is charged based on a commercial tariff. SOHOs also have standard Sale and Purchase Agreements (SPA) while SOVO and SOFO do not and your interest as the buyer is protected under the Housing Development Act (HDA)
SOHO is a one- or two-room unit that can be used as a home, an office, or both. It is a self-sufficient unit ranging from 500-1,200 sq ft. with all basic necessities and offers typical condominium facilities. Furthermore, it is protected by the HDA since it is a strata-titled property.
SOVO, on the other hand, is to be used only as an office or for commercial purposes. Thus, it is not covered by the HDA protection due to its commercial title. It also has a slightly smaller size than SOHOs and varies around 400-800 sq ft. Nonetheless, these units are extremely suitable for small companies or start-up companies since they are often equipped with business facilities.
Just like SOVOs, a SOFO is not regulated by the HDA but can be used as either an office, a home, or both. The only difference is that a SOFO provides the owners or tenants to have the flexibility to modify the units according to their preferences
Personally, I see these units are being stuck in limbo, undecided if it is a proper residential unit or a commercial/office unit. While I cannot appreciate how these units work out as an investment, there might be some of you who can make the best out of this property class.
What is Housing Development Act (HDA)?
HDA is enforced to control and provide licensing regarding the business of housing developments in Peninsular Malaysia. It is introduced to safeguard the interest of home buyers and is the mediator for development penalties and fines.
The standard Sales and Purchase agreement includes these clauses, but are not limited to:
- Provide assistance during disputes between buyers and developers;
- Protect a buyer’s interest when a development is abandoned;
- Set rules and regulations of when a developer may start charging buyers.
In essence, commercial titled properties are not covered under the HDA. Purchasers are required to practise caution when considering these properties and are at the mercy of the developers if a project fails to complete on time.
Conversely, if your property is individual titled or strata-titled, then you can rest assured since it is HDA protected.
If you want to know more about Housing Development Act and how it affects your purchases, do check out this article!
What is the difference between an individual title and strata title?
An individual title is a document used to prove your ownership of a building that is built on a piece of land which belongs solely to you. The maintenance of the property is your responsibility alone and is typically issued to landed properties only.
Strata-titled properties are developments where the building or land is carved out into different parcels or lots. The ownership is then issued to individual buyers within the development and have shared responsibility for the common facilities.
Due to the common areas being governed and managed by the Joint Management Body (JMB), owners of strata properties are therefore required to pay monthly maintenance fees and sinking funds. As you would have guessed by now, common strata residential properties are such as flats, apartments, service apartments, condominiums, townhouses, and cluster houses.
In case you did not know, the JMB or Management Committees are given authority under Strata Management Act to collect these maintenance fees.
If you want to know in-depth how the different land titles work in Malaysia, do check out this article!
Final Words
As always, it is important to research the property you are planning to purchase. Do not limit yourself in your consideration to the built-up size and facade, but also consider its location, potential for rental income as well as capital appreciation. The whole point of investing in a residential property is so that it can serve as an income-generating asset to you while providing others with a comfortable shelter over their heads.
Likewise, it is also crucial for you as a buyer, to know your investment limit and to have a game plan in this game of real estate investment. By doing so, you would have an easier time looking for a suitable property that caters to your needs without being sidetracked by the fancy-schmancy units that might do you no good.
Until the next article, take care.
