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SUMMARY
Malaysia property prices are more likely to rise than fall from here, but the national increase should stay slow and the gap between good and bad properties is likely to widen.
The headline market is still positive: the latest Malaysian House Price Index is up 1.7% year on year, even as transaction volumes have weakened. That looks more like a market losing momentum than one entering a broad decline.
The bigger warning sits in liquidity. Residential transactions are down 10.7% from a year earlier, which means sellers are still largely holding their prices while fewer buyers are actually completing deals.
Unsold stock has become harder to ignore. Malaysia now has more than 52,000 completed residential and serviced-apartment units sitting unsold, and residential overhang has increased for six consecutive quarters.
Developers are reacting sharply. Housing starts have fallen about 71% year on year, while completions are still rising, so the market is absorbing an old pipeline just as the next one is being cut back.
Affordability is the main ceiling on stronger price growth. The average house costs roughly six times median annual household income, and more than half of recent residential transactions were for homes priced at RM300,000 or below.
Mortgage rates are not the main problem. Financing approval is. With housing-loan approval ratios around 40% and developers repeatedly reporting buyer financing difficulties, a large share of demand never becomes a completed purchase.
The economic backdrop is stronger than the property market itself. GDP growth, employment and approved investment remain supportive, which makes a nationwide crash difficult to justify without a much bigger deterioration in jobs or credit quality.
Johor has the clearest case for outperforming, thanks to Singapore connectivity, the JS-SEZ and heavy investment, but oversupply is still serious. A genuinely well-located property near improved infrastructure is a very different bet from another generic tower somewhere in Johor Bahru.
Property type matters too. Terraced and semi-detached homes are still outperforming high-rise units, which fits the supply story: established landed neighbourhoods are harder to replicate than condo corridors where developers can keep adding stock.
Our base case is low-single-digit nominal price growth nationally. After inflation, that may feel almost flat, while oversupplied high-rise projects can still lose value and scarce landed homes in strong urban locations keep rising.
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Are property prices in Malaysia rising or falling right now?
Property prices in Malaysia are still rising today, but the national market has slowed to the point where “almost flat” is a fair description.
The latest Malaysian House Price Index rose 1.7% from a year earlier, with the average house price reaching RM507,533, according to NAPIC. That follows national price growth of roughly 3% in each of the previous two years. We are still looking at appreciation, just much less of it.
The activity underneath those prices looks weaker. Malaysia recorded 89,966 property transactions in the first quarter, down 8% from a year earlier, while the total value barely moved at RM51.09 billion. Residential transactions fell even faster, by 10.7%, to 52,936 units.
Sellers have largely held their prices, but fewer buyers are completing deals. For now, Malaysia looks much more like a market losing speed than one starting a broad decline.
| Latest Malaysia property measure | Current reading | Year-on-year change | What we make of it |
|---|---|---|---|
| House Price Index | 235.2 | +1.7% | Prices still rising |
| Average house price | RM507,533 | +1.7% | Slow nominal appreciation |
| Total property transactions | 89,966 | -8.0% | Buyers are more cautious |
| Residential transactions | 52,936 | -10.7% | Housing activity is weaker |
| Total transaction value | RM51.09bn | -0.6% | Prices have not repriced sharply |
Is Malaysia’s housing market weaker than the price index makes it look?
Yes. Malaysia’s property market currently looks healthier in the price index than it does when we look at how easily homes are actually selling.
The national index can stay positive even when market liquidity gets worse. Homes do not trade like listed shares: an owner who dislikes the price being offered can simply wait. In a slowing property market, the first adjustment often happens through fewer deals and longer selling times rather than an immediate fall in recorded prices.
We can see that happening now. Residential transaction volume dropped 10.7% from a year earlier, yet the national house-price index still gained 1.7%. Knight Frank’s latest Malaysia review reaches a similar reading: demand remains concentrated in well-located, good-quality developments while buyers have become increasingly selective.
There is another useful comparison. Malaysia completed more than 416,000 property transactions in 2025, only slightly fewer than in 2024, while transaction value reached a record level. The sharper slowdown has appeared more recently. So we would not call this a frozen market, but the easy part of the recovery has clearly faded.
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Is Malaysia’s property overhang getting serious?
Malaysia’s property overhang is now a real drag on prices, especially for apartments and projects where buyers have plenty of alternatives.
NAPIC counted 32,801 completed but unsold residential units in the latest quarter, worth RM16.37 billion. A year earlier there were 23,515. That means the number of finished homes waiting for buyers jumped roughly 40% in twelve months.
Serviced apartments add another 19,263 completed unsold units worth RM16.52 billion. Put the two categories together and more than 52,000 finished residential or residential-like units are currently sitting unsold.
The direction is hard to dismiss. Residential overhang has increased for six consecutive quarters. It also rose another 7.6% in the latest quarter alone.
One detail makes the picture more interesting: the number of unsold residential units increased while their combined value fell 7.7% quarter on quarter. The pile-up is therefore becoming more concentrated in cheaper inventory. Oversupply is no longer only a luxury-condo story.
We still would not turn this into a prediction of a national price crash. The excess stock is concentrated in particular states, price ranges and developments. But for a buyer comparing several similar new condos, there is much more room to negotiate these days.
| Completed unsold property | Units | Value | Recent direction |
|---|---|---|---|
| Residential | 32,801 | RM16.37bn | +7.6% QoQ |
| Residential one year earlier | 23,515 | RM15.0bn | Much lower |
| Serviced apartments | 19,263 | RM16.52bn | Still increasing |
| Combined finished stock | 52,064 | RM32.89bn | Heavy inventory |
Are Malaysian developers still building too many homes?
Malaysian developers have finally hit the brakes, and that should prevent today’s oversupply problem from getting much worse a few years from now.
Only 8,243 residential units started construction in the latest quarter, down from 28,344 a year earlier. That is a 71% collapse in housing starts. New launches also fell 27%, from 12,498 units to 9,112.
Meanwhile, 12,905 homes were completed, up 38% from a year earlier. Malaysia is still receiving properties that were started under stronger market conditions while developers are becoming far more reluctant to add the next wave.
Today’s completed inventory still has to be sold, so prices in oversupplied projects can remain weak. But if starts stay anywhere near current levels, considerably fewer new homes will reach the market later.
The sales performance of new launches also shows why developers are cautious. Only 1,052 of the 9,112 newly launched units were reported sold during the quarter, giving a take-up rate of just 11.5%.
| Residential construction | Previous year | Latest quarter | Change |
|---|---|---|---|
| Homes completed | 9,329 | 12,905 | +38% |
| Homes started | 28,344 | 8,243 | -71% |
| New launches | 12,498 | 9,112 | -27% |
| Newly launched units sold | — | 1,052 | 11.5% take-up |
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Can Malaysian buyers afford much higher property prices?
Malaysian incomes can support some further house-price growth, but they cannot comfortably support another nationwide property boom.
The latest full Household Income Survey puts Malaysia’s median household income at RM7,017 per month, or about RM84,200 a year. Compare that with an average house price of roughly RM508,000 and the average property costs around six times median annual household income.
That simple ratio is imperfect because households do not all buy the average home. Actual transactions tell us more. More than half of residential deals in the latest quarter involved homes priced at RM300,000 or below. Demand is heavily concentrated where ordinary households can still qualify for financing.
Income has at least been moving in the right direction. Median household income grew at an annualised rate of roughly 5% between the last two full surveys. If incomes continue growing around that pace while national property prices crawl higher by only 1% to 3%, affordability can gradually improve.
That would be a healthier outcome for Malaysia than another rapid jump in house prices.
Are mortgages stopping Malaysians from buying property?
Mortgage access is probably a bigger constraint on Malaysian property prices now than mortgage rates themselves.
Bank Negara’s Overnight Policy Rate currently sits at 2.75%, after being cut from 3.00% last year. Borrowing costs are therefore not unusually high by recent Malaysian standards.
Getting approved is another story. Industry data cited in recent property-market research puts housing-loan approval ratios around 40%. In simple terms, roughly six applications out of ten are not turning into approved housing finance.
REHDA’s recent developer survey reached the issue from the seller’s side: 72% of surveyed developers said buyers were encountering financing problems. The RM500,001-to-RM700,000 range was particularly difficult.
That helps explain why Malaysia can have plenty of people who want homes and plenty of developers trying to sell them, yet still accumulate unsold stock. Interest exists; a substantial part of it cannot get through the bank.
For house prices, this creates a fairly obvious ceiling. Until financing approval improves or incomes rise enough to make more households eligible, aggressive price increases would shrink the pool of buyers even further.
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Is Malaysia’s economy strong enough to stop house prices falling?
Malaysia’s economy is currently strong enough to make a broad property downturn difficult to justify.
The latest Department of Statistics figures show real GDP growing 6.0% from a year earlier in the second quarter, up from 5.4% in the first quarter. Services grew 5.9% and manufacturing 7.3%. Employment in the services sector also increased 2.3%, while salaries and wages in that sector rose 4.8%.
Investment has remained unusually strong too. MIDA recorded RM218.5 billion of approved investment in the first half of the year, 11.7% more than a year earlier. The 2,746 approved projects are expected to create 99,030 jobs once implemented.
Approved investment does not immediately become demand for apartments. Some projects take years to arrive, and data-centre investment in particular can involve huge capital spending without equally huge headcounts.
Even with that caveat, Malaysia currently lacks the economic weakness we would normally expect before a serious national housing correction. Employment is still growing, businesses are investing and GDP growth has accelerated rather than stalled.
Which parts of Malaysia are most likely to see property prices rise?
Selangor and Johor currently have the strongest economic tailwinds, while Kuala Lumpur and Penang remain attractive but much more dependent on the exact property being bought.
The latest investment numbers make the geographical concentration striking. Selangor received RM70.0 billion of approved investment during the first half of the year, Johor RM59.4 billion, Kuala Lumpur RM26.6 billion and Penang RM20.2 billion.
Together, those four markets attracted about RM176 billion. That is roughly 81% of all approved investment in Malaysia during the period.
The type of investment also differs. Selangor is taking a large share of Malaysia’s digital and data-centre expansion. Johor combines data centres, manufacturing, the Johor-Singapore Special Economic Zone and the RTS connection with Singapore. Penang continues to attract semiconductor and advanced-manufacturing projects. Kuala Lumpur remains the country’s highest-income employment centre.
Yet all four markets still carry unsold housing. Kuala Lumpur had 3,733 completed unsold residential units in the latest NAPIC count, Selangor 3,745, Johor 3,852 and Penang 3,165.
Strong local economies should help prices, but buyers still need to distinguish areas receiving actual jobs and infrastructure from developments simply using the nearest growth story in their marketing.
| Market | H1 approved investment | Main property support | Main problem |
|---|---|---|---|
| Selangor | RM70.0bn | Jobs, digital investment, Klang Valley demand | Large supply in some corridors |
| Johor | RM59.4bn | Singapore link, JS-SEZ, data centres | Heavy condo and serviced-apartment stock |
| Kuala Lumpur | RM26.6bn | Highest incomes, jobs, transit | Expensive entry prices, high-rise supply |
| Penang | RM20.2bn | Semiconductors, advanced manufacturing | Uneven absorption |
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Will Johor property prices rise faster than the rest of Malaysia?
Johor has one of the clearest cases for outperforming Malaysia today, although the biggest gains should stay concentrated around genuinely improved locations.
The Johor-Singapore story has moved beyond vague future promises. The RTS Link between Bukit Chagar and Woodlands North is scheduled to begin passenger operations at the end of 2026. The journey itself should take roughly five minutes, and the system is designed to handle as many as 10,000 passengers per hour in each direction.
Johor is also benefiting from the Johor-Singapore Special Economic Zone, manufacturing investment and Malaysia’s data-centre build-out. As seen above, the state attracted RM59.4 billion of approved investment in only six months after already leading Malaysia with RM110 billion for the whole of 2025.
That is a lot of economic activity concentrated near Singapore.
We would still be careful with generic “Johor” exposure. The state had 3,852 completed unsold residential units, while almost 10,000 unsold completed serviced apartments were concentrated there. A development near an RTS station, established employment centre or genuinely constrained landed area has a much stronger case than another tower whose main selling point is being somewhere in Johor Bahru.
Are landed homes likely to beat condos in Malaysia?
Good landed homes should continue beating generic Malaysian high-rise units because their supply is harder to expand and the latest price data already shows the gap.
Terraced and semi-detached house prices both increased 2.2% from a year earlier in the latest NAPIC figures. High-rise prices gained only 1.3%. Detached houses were the exception, falling 0.7%, partly because their much higher ticket prices reduce the buyer pool.
This difference has been visible for more than one quarter. Terraced homes rose 3.6% in 2024 and semi-detached homes 4.1%, compared with 2.3% for high-rise properties.
The reason is fairly simple. Developers can put hundreds or thousands of apartments into a growing corridor, while established landed neighbourhoods cannot suddenly create more land. Bank Negara has also pointed to constrained landed supply when discussing the stronger performance of that segment.
For buyers chasing capital appreciation rather than amenities, a well-located terraced home therefore looks stronger today than a fairly interchangeable condo surrounded by competing towers.
| Property type | 2024 price growth | Latest YoY growth | Current position |
|---|---|---|---|
| Terraced | +3.6% | +2.2% | Stronger |
| Semi-detached | +4.1% | +2.2% | Stronger |
| High-rise | +2.3% | +1.3% | Slower |
| Detached | +2.6% | -0.7% | Weak lately |
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Could Malaysian property prices fall even if the national index keeps rising?
Absolutely. A national Malaysian house-price increase of 1% or 2% can easily coexist with significant losses on individual properties.
The current market already gives us the ingredients. Negeri Sembilan and Sabah recorded negative annual price growth in the latest NAPIC release even while Malaysia as a whole remained positive. Different property types are also separating, with detached homes falling while terraced and semi-detached prices continue rising.
Inflation creates another version of the same problem. National house prices recently increased at roughly the same pace as consumer prices. An owner can therefore see the nominal value of a property edge higher without becoming meaningfully wealthier in real terms.
Then there are transaction costs, maintenance, sinking-fund charges, interest and agent fees. A condo that rises 1% a year for several years can still turn into a poor investment even though its recorded sale price never technically falls.
The headline national forecast needs to be treated carefully. We expect Malaysia’s index to remain positive, but that says surprisingly little about what will happen to an individual unit.
Could Malaysia’s property market actually crash?
A nationwide Malaysian property crash looks unlikely for now because we are not seeing the forced-selling conditions that usually turn a slow market into a collapse.
Bank Negara’s latest financial-stability review puts the median loan-to-value ratio on outstanding housing loans at about 70%. Housing-loan impairments remain low, around 1.1%, while impaired property-investment loans are lower still.
That gives existing owners a reasonable equity cushion. More importantly, Malaysia is currently screening out many weaker borrowers before they buy, as the low mortgage-approval ratio shows.
The dangerous combination would be highly leveraged owners, rising unemployment, rapidly increasing loan defaults and banks or households being forced to sell properties quickly. Malaysia currently has growing employment and solid GDP growth instead.
There can still be painful corrections inside particular buildings. A heavily supplied serviced apartment bought at a launch premium can fall substantially without producing anything resembling a Malaysian housing crash.
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What could make Malaysian property prices rise much faster?
Malaysian property prices could accelerate if the current construction slowdown lasts long enough for unsold stock to clear while wages and mortgage approvals improve.
The supply side has already moved dramatically. New housing starts have fallen by roughly 71% from a year earlier. If developers keep construction subdued, the pipeline reaching the market a few years from now will become much thinner.
At the same time, economic demand is reasonably strong. Malaysia has growing employment, 6% GDP growth in the latest quarter and a large pipeline of approved investment. What the residential market still lacks is an easy conversion from economic growth into home purchases.
Mortgage approval is the missing link.
If more households qualify for loans at the same time that fewer newly completed homes reach the market, sellers regain pricing power. We would become substantially more bullish if that happened while the existing overhang was clearly falling for several consecutive quarters.
Until then, expecting another broad double-digit Malaysian property boom would be difficult to defend.
So, are property prices in Malaysia likely to rise or fall?
Malaysia property prices are more likely to rise than fall from here, but we expect slow national growth and much bigger differences between winners and losers.
The evidence does not point toward a broad downturn. Prices are still increasing, the economy is growing quickly, employment remains supportive and developers have sharply reduced the number of homes they are starting. Those conditions give the national market a decent floor.
There is also too much weakness to call Malaysia strongly bullish. Buyers are completing fewer deals, financing approval is difficult and finished unsold stock has climbed for six consecutive quarters. More than 52,000 completed residential and serviced-apartment units are now sitting unsold.
Our base case is low-single-digit nominal house-price growth nationally. After inflation, that could feel very close to a flat market.
The more useful forecast is underneath that national number. Scarce landed homes in good urban areas have a better setup than interchangeable high-rise units. Johor has unusually strong catalysts around Singapore connectivity and new investment. Selected parts of Selangor, Kuala Lumpur and Penang should also benefit from employment growth. Oversupplied developments can still lose value while all of that is happening.
So yes, we think Malaysian property prices will probably keep edging up. Anyone expecting the national index to carry every property with it is taking a much bigger gamble.
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OUR METHODOLOGY
This analysis tests whether property prices in Malaysia are more likely to rise or fall based on the evidence available today. We treat the question as an evidence-aggregation exercise rather than letting one headline index decide the answer.
We broke the market into the parts that most directly shape price formation: national price direction, transaction liquidity, completed unsold stock, new supply, affordability, mortgage access, economic demand, and differences between states and property types. Evidence tied directly to transactions, achieved prices, financing, unsold completed stock and construction carried more weight than broad sentiment or promotional narratives.
No single indicator was allowed to answer the question on its own. Malaysia can have rising recorded prices, falling transaction volumes, increasing inventory and strong GDP growth at the same time, so the conclusion comes from how those forces line up rather than from one preferred statistic.
National indicators were used to establish the broad direction of the market, while state-level and property-type data were used to identify where that national picture is most likely to break down. That is why the article separates the national base case from the much sharper differences between Johor, Selangor, Kuala Lumpur, Penang, landed homes and high-rise stock.
For prices, transactions, new launches, housing starts, completions and completed unsold stock, we relied primarily on NAPIC’s latest official property-market publications, the Q1 2026 Property Market press release, the Q1 2026 Property Market Snapshot, and the Malaysian House Price Index archive.
For affordability and the broader economic backdrop, we used the Department of Statistics Malaysia’s Household Income Survey 2024, Q2 2026 GDP release, Q2 2026 Labour Force Survey, and July 2026 Consumer Price Index.
For credit conditions and crash risk, we used Bank Negara Malaysia’s OPR decisions, September 2026 Monetary Policy Statement, Financial Stability Review credit-risk chapter, Financial Stability Review overview, and Monthly Highlights & Statistics 2026.
For the state-level growth case, we used MIDA’s H1 2026 approved-investment release and its Johor-Singapore Special Economic Zone documentation. The Johor connectivity thesis was cross-checked against MRT Corp’s RTS Link project information.
We also used Knight Frank’s Malaysia Real Estate Highlights 2H 2025 as an independent market-level cross-check. It was not used to replace the official national statistics.
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