The Cost Of Living In Malaysia For Expats

The tropical country of Malaysia in Southeast Asia is fast becoming a hotspot for working expats. With a low cost of living and high quality of life, expats moving to Malaysia can enjoy a luxurious lifestyle complete with picturesque beaches, lively cities and endless islands to explore.

While international workers in Malaysia can expect a relatively low wage compared to the national average, the cost of living in Malaysia is much lower than most Western countries and other expat hotspots in Asia, such as Singapore and Hong Kong.

The cost of living in Malaysia

According to 2022 data, the cost of living in Malaysia is on average 43.47% lower than in the United Kingdom, and 51.74% lower than in the United states. It’s no wonder that four in five (78%) of expats living in the capital, Kuala Lumpur, are satisfied with the cost of living in Malaysia – compared with 43% globally.

It’s an exciting time to move to Malaysia – particularly if you’re thinking of moving for business. A second world country with a newly industrialised economy, Malaysia is the 12th most competitive country in the world when it comes to economic performance, owing to its fast-growing export-oriented economy, low national income tax and a highly affordable cost of living.

Here’s a closer look at the cost of living in Malaysia’s most popular expat destinations, excluding rent:

*Data correct as of December 2022, Numbeo

Kuala Lumpur is Malaysia’s most expensive city. However, it still ranks extremely low compared to the cost of living in other Asian capitals, and most of the Western world. In fact, only two of Malaysia’s cities even appear in Mercer’s 2022 Cost of Living Ranking – Kuala Lumpur coming 181st out of 227 countries, and Johor Bahru appearing at 211.

But what about daily expense? To get an idea, here’s a quick overview of how much basic groceries might cost as an expat in Malaysia:

*Data correct as of December 2022, Numbeo

Effects of the cost of living crisis in Malaysia

Malaysia is currently in a period of low and stable inflation. However, that doesn’t mean that cost of living in Malaysia comes without challenges – especially in the country’s more urban areas.

The cost of living in Malaysia has huge disparities between states, and between urban and rural areas. Everything from the price of food to the cost of housing is dependent on where you choose to settle.

Slow or stagnated income growth is widening income gaps between the bottom 40% and the top 20% of workers.

Malaysia has bounced back well in the aftermath of the COVID-19 pandemic and the economy was projected to expand by 5.5% in 2022. Malaysia’s labour market is also improving – unemployment rates have decreased from 4.3% in Q4 2021 to 4.1% in Q1 2022.

While not directly affected by the Russian-Ukrainian war, Malaysia is starting to feel some side effects, particularly the increase in food and fuel prices in the wake of supply chain disruption.

Cost of accommodation in Malaysia

Good news! The cost of accommodation in Malaysia is largely affordable compared with the global average – indeed, 75% of expats living in Kuala Lumpur find housing affordable, versus just 36% globally.

Let’s take a closer look at the cost of renting and buying property in Malaysia.

Cost of renting in Malaysia

Like most places, rent is likely to be one of your biggest outgoings as an expat in Malaysia. You should plan to set aside around a fifth (20.5%) of your monthly income to put toward the cost of rent.

That said, the cost of rent in Malaysia is, on average, 68.43% lower than in the United Kingdom. Even in the capital Kuala Lumpur, expats can expect rents to be 80% cheaper than London, and 87% lower than New York.

The cost of rent in Malaysia can vary dramatically depending on where you decide to settle. If you choose to live in a city centre, for example, you can expect to pay a more premium price than if you lived in a less central suburb.

Taking Kuala Lumpur as the top-end example, here’s an idea of how much rent might cost per month in different areas of the city:

*Data correct as of December 2022, Numbeo

Cost of buying property in Malaysia

It’s absolutely possible for expats to buy property in Malaysia. In fact, Malaysia is one of the easiest countries to do so and even has a government scheme, Malaysia My Second Home (MM2H), that incentivises foreigners to buy property in Malaysia.

The main requirement for an MM2H visa are:

• Proof of income (more than US$9,000 a year)
• To place a fixed deposit on a property (valued at more than US$250,000)
• Paying for immigration fees and a security bond

Don’t panic if you can’t meet these requirements. While the MM2H visa might make things easy, foreigners can still buy property in Malaysia without the MM2H.

General restrictions on foreigners buying Malaysian property are:

1. The property must be valued over US$250,000 (this is true in most states)
2. The property must NOT be built on Malay Reserved land
3. The property must NOT be part of a development project, as allocated to Bumiputera group by state authority
4. Low and medium cost residential units (as defined by state authority) can only be purchased by Malaysian citizens

And don’t forget, on top of the property price, you’ll also need to budget for legal fees, estate agent fees and stamp duty (0.5% as of 2022), just like you would if you were buying property in the UK.

See below for the average cost of bills in Kuala Lumpur (excluding rent). Remember, the cost of living in Malaysia’s more rural areas will likely fall below this average, while prices in the inner city may be a little higher.

*Data correct as of December 2022, Numbeo

Cost of education in Malaysia

In Malaysia, only Malaysian citizens can attend public schools. So, as an expat, you will need to enrol your children in a private or international school. Beware that private and international schools in Malaysia are infamous for their high costs.

If you choose to become a Malaysian citizen, you should know that only primary school education (7–13 years) is compulsory in Malaysia. After this, children with the required grades can enter secondary education, earning them a lower certificate of education in the first three years, then choose to specialise in either arts or science for their last two years.

In private and international schools though, the syllabus is different, following either the Cambridge IGCSE education syllabus or international education syllabus. These schools also benefit from a lower student-teacher ratio and far better facilities than government-funded schools.

Cost of primary and secondary education in Malaysia

There’s a good selection of both private and international schools in Malaysia with varying prices depending on the type of school, the area and the school’s reputation.

As an example, we’ve compared the cost of education in Kuala Lumpur, with the less competitive cities of Penang and Sitiawan:

*Based on 2022/23 fees

Cost of higher education in Malaysia

Malaysia is a vibrant place to study and is one of Asia’s emerging international study hubs becoming an increasingly popular choice for international students.

Having set themselves an ambitious goal of attracting 250,000 international students by 2025, Malaysian Universities are earning a respectable standing in global university rankings, with one university in the QS World University Rankings 2022 top 100 universities, and a further six in the top 200.

Malaysia’s highest-ranking university is also its most expensive. Universiti Malaya (UM) is a public research university based in Kuala Lumpur, ranked 70th in the global university rankings.

The cost of studying in Malaysia depends on your chosen degree and your period of study. At UM, prices start at US$11,800 for a standard 3 year Bachelors of Arts, up to US$160,300 for a five year medical degree.

Cost of transport in Malaysia

Public transport in Malaysia is reliable and cheap, with both intercity train and bus links providing comfortable travel options if you don’t own a car.

Here are the average costs of transport in Malaysia, including the cost of buying and running a car:

*Data correct as of December 2022, Numbeo

Cost of healthcare in Malaysia

The cost of healthcare in Malaysia will depend on whether you choose to rely on the universal healthcare system, or go private.

The Malaysia Ministry of Health runs an effective public healthcare system, based on the same model as the NHS in the United Kingdom. However, unlike the NHS, this system is not based on a national insurance program. Instead, the government heavily subsidises the cost of healthcare in Malaysia, allowing patients to access services with just a small fee.

A visit to the medical centre for minor incidents such as a cold or sinus infection can cost just US$10, while an overnight stay in hospital is around US$50 for a private room.

That said, Malaysia currently has one of the smallest public healthcare budgets among middle income countries, sitting at 2.58% of GDP. The government is hoping to increase this to 5% of GDP by 2030.

A good international health insurance policy will give you access to the best healthcare facilities in Malaysia, both public and private. The best hospitals and other facilities can be found in the main urban areas of Kuala Lumpur, Sungai Petani, Sandakan, and Bintulu.

How to budget as an expat in Malaysia

As an expat living in Malaysia, you should find you have no trouble living a comfortable lifestyle. However, the true cost of living in Malaysia comes down to many personal factors, including your income, where you live and your day-to-day lifestyle.

Here’s how to estimate your cost of living in Malaysia, and budget for your daily expenses and savings in four simple steps:

1/ Estimate your take-home pay

While living in Malaysia, it’s important to know how much of your salary you’ll need to pay your monthly expenses. That way, you’ll be able to use the excess to make the most of your new Malaysian lifestyle.

Personal Income Tax in Malaysia is 30% for non-residents, so remember to take this into account when you’re working out your take-home pay.

2/ Work out the cost of rent/mortgage payments

Rent or mortgage costs are likely to be your biggest expense living in Malaysia, making up about 20% of your monthly bills. And remember, if you’ve yet to make your move, you’ll also need to budget for one-off moving costs in your first month.

3/ Calculate your monthly bills

When working out your monthly bills, try to think about any money you pay out on a regular monthly basis. Things like utility bills, mobile phone contracts, internet and insurance – including international health insurance, so you can guarantee you and your family have access to the best possible medical care while living in Malaysia.

4/ Set your monthly budget

Now that you’ve got all your monthly costs mapped out, you’ll be able to calculate your personal cost of living in Malaysia. And the good news is, everything you have left can go straight in your pocket!

Looking for expat health insurance to live in Malaysia?

At William Russell, we have 30 years of helping expatriates settle into their new lives overseas by providing world-class international health insurance.

Making the move to another country can be challenging. But no matter where you go, you can take one thing off your mind. William Russell offers international health insurance that covers you for everything from minor injuries to long hospital stays, and we can even offer medical evacuations to patients who require treatment in other countries.

Speak to us today to find out more about how we could help you make the most of your new life as an expat in Malaysia.