With official data from DOSM, we look at the cost of living in the most affected states in Malaysia. 

Life hasn’t been easy in the past few years. The pandemic in 2020 was hard on Malaysians as jobs became hard to keep and even harder to get. Since then, the cost of living has been increasingly creeping up and is now a pressing concern.

In November 2024, the Department of Statistics (DOSM) released its first-ever publication, Cost of Living Indicators for 2023, to shed light on this situation. From the data, we will detail the six Malaysian states with the highest cost of living increase in 2023, which hopefully can help you understand where the higher costs are coming from and help you better budget for the future.

Our Data

The Cost of Living Indicators for 2023 compiles a cost of living index growth rate for each Malaysian state and even, districts. The index includes things that Malaysians spend on such as:

  1. Food & Beverage
  2. Alcoholic Beverages and Tobacco
  3. Clothing and Footwear
  4. Housing, Water, Electricity, Gas and Other Fuels
  5. Furnishings, Household Equipment, and Routine Household Maintenance
  6. Health
  7. Transport
  8. Information and Communication
  9. Recreation, Sports and Culture
  10. Education Services
  11. Restaurants and Accommodation Services
  12. Insurance and Financial Services
  13. Personal Care, Social Protection and Other Services

However, no man is an island, and so is data. Just knowing the cost of living index growth rate only tells you that you have a higher (or lower) cost of living from the previous year. We will supplement this with the inflation data (also published by DOSM) to give you more information on which areas of your spending are increasing the most, and also the household income and expenditure dataset to detail the differences across the different states.

#1: Putrajaya

This might come as a shock, but yes. Putrajaya, or officially the Federal Territory of Putrajaya, had the highest increase in cost of living in 2023 at 4.6%.

Putrajaya is after all the center of government for the whole of Malaysia. In 2023, Putrajaya’s population grew by 1.5% to 118,800 as more people opted to live here and travel to work in Klang Valley. Putrajaya is conveniently just 20 to 30 minutes away from Kuala Lumpur by the MEX highway and now has Mass Rapid Transit 2 (MRT2) stations also. Not forgetting the convenience for those working in neighboring Cyberjaya which is the base for many local and international technology companies. Average household income in Putrajaya is the highest in Malaysia at RM13,473 per month.

As more people move in and spend, things would get more expensive. Food and restaurant & hotel prices rose by a whopping 5.9% and 5.5% respectively in 2023. Meanwhile, housing and utilities prices also went up by 4.9%.

#2: Perlis

What? Our small gem Perlis had one of the highest increase in cost of living in Malaysia? In 2023, cost of living here increased by 3.9%.

Actually, it is not hard to see why. Perlis lies on the border with Thailand. With the opening of international borders and local travels after the pandemic, Perlis benefited from more local and international tourists from Thailand. Restaurants & hotel prices rose the most among all others, by 8.2% in 2023. Naturally, recreation services and culture prices also went up by 4.5% as tourists visited the various spots in Perlis.

With this sharp increase, people living in Perlis might be having it tough as average household income here is one of the lowest at only RM5,664 per month. Tourism could be a double-edged sword then. On one hand, it provides jobs. But on the other hand, it raises the cost of living for them too.

#3: Johor

Johor comes in at number 3 in the list, with a cost of living growth of 3.5%.

This southern state has a similar problem as Perlis in the north as they both have international borders. With Singapore right next door, Johor receives a lot of tourists from there, whose spending power inflates prices for Johoreans. But what’s interesting is that it is education prices that have increased the most at 7.1% in 2023.

There is a growing trend among Malaysians and even Singaporeans to send their children to schools in Johor. Education tourism is a big thing considering that it is cheaper because of the strong Singaporean dollar and the relatively easy travelling arrangements.

And that, including the sheer number of Singaporean tourists, has had a ripple effect on the local Johoreans. Food and restaurant & hotel prices have risen sharply by 4.3% and 5.8% respectively in 2023.

It is no surprise then the nearest districts to Singapore such as Johor Bahru (+3.2%), Kota Tinggi (+2.9%), Kulai (+2.9%) and Pontian (+2.6%) are among those with the highest increases in cost of living according to data.

#4: Malacca

Beautiful and historical Malacca is joint number 4 (with Kuala Lumpur) with a cost of living increase of 3.3%.

Home to sumptuous, delicious nyonya delicacies, could the state be seeing the start of a higher cost of living? Food and restaurant & hotels lead the increase, with prices increasing by 4.6% and 3.5% respectively in 2023.

By districts, Jasin (+3.5%) was the main contributor. A plate of white rice, chicken, and vegetables cost RM9.00 here, making it comparable to prices in major cities such as Kuala Lumpur (RM8.50), Seremban (RM8.75), and Klang (RM8.75).

#5: Kuala Lumpur

The bustling Federal Territory of Kuala Lumpur comes in at number 5 with a cost of living increase of 3.3%.

Cost of living in KL is still high with restaurant & hotel and food prices increasing the most by 6.9% and 4.1% respectively in 2023. KL is the centre of employment and many Malaysians from all over, move here to find jobs that pay the highest.

Households in KL are among the biggest income earners in Malaysia at RM13,325 per month (second only to Putrajaya), but they are also among the highest spenders at RM7,823 per month. High-paying jobs comes with heavy responsibilities … and also heavy spending.

Furthermore, KL has the highest average house price of RM778,485 in 2023. Good luck to hopeful future home owners.

#6: Selangor

Selangor is sixth on this list with a cost of living increase of 3.2%, similar to KL. No doubt life in Klang Valley is both rewarding and challenging.

The state has the same concerns with the rising cost of living as KL with food and restaurant & hotel prices driving most of the increase at 6.1% and 6.2% respectively in 2023. Average household income is third highest at RM12,233 per month, while spending is high also at RM6,770 per month.

And of course, house prices in Selangor are expensive at around RM535,131.

Conclusion

The cost of living is rising every year, worrying Malaysians as it is a heavy burden to shoulder. If you are living in these six states, it is real and not just your imagination that prices have been increasing. For those, especially fresh graduates, who are planning to move states, do use this article to be better informed of what to expect if you are heading to these six. For the rest of us, how surprised are you that your state is not in this list?

 

Let us know in the comments below on how you are coping with the cost of living increases in your state.

 

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