Malaysia’s Property Market Shows Resilience Despite Slower Growth in 1Q2026

Malaysia’s property market continued to demonstrate resilience in the first quarter of 2026, even as transaction activity moderated amid global economic uncertainties and softer construction momentum. The latest report released by the Valuation and Property Services Department (JPPH) reflects a market that remains fundamentally stable, supported by ongoing housing demand, government initiatives, and confidence in the country’s long-term economic direction.

According to JPPH director-general Abdul Razak Yusak, the property market recorded 89,966 transactions worth RM51.9 billion during 1Q2026. While transaction value slipped marginally by 0.6% and volume declined eight per cent compared with the same period last year, the overall market remained active under challenging external conditions.

One major lesson from the report is that affordable housing continues to dominate Malaysia’s residential market. Properties priced at RM300,000 and below accounted for more than half of all housing transactions, with over 27,000 units sold during the quarter. This highlights how demand for affordable homes remains the key driver of the residential sector, particularly among first-time buyers and middle-income households.

The residential subsector maintained its position as the largest contributor to the property market, making up nearly 59% of total transactions. Around 53,000 residential transactions valued at more than RM22 billion were recorded, demonstrating that housing demand remains relatively resilient despite slower market conditions.

Another key takeaway is that construction activity remains mixed across different property segments. While the completion of residential homes and commercial shop units increased significantly, serviced apartment completions declined sharply by more than 40%. This may suggest developers are becoming more cautious toward high-rise oversupply risks while continuing to prioritise landed and conventional residential developments.

The report also showed encouraging growth in planned new supply for housing, shops, and serviced apartments, indicating that developers still see long-term demand potential in selected segments. However, the number of newly launched housing units fell to 9,112 units from over 12,000 a year ago, reflecting more measured project launches amid current market uncertainties.

Malaysia’s house prices continued to record moderate appreciation. The 1Q2026 Malaysian House Price Index stood at 235.2 points, with an average house price of RM507,533 and annual growth of 1.7%. Most states recorded positive price growth, although Negeri Sembilan and Sabah experienced slight declines.

From a market structure perspective, terraced houses remained the most stable segment, together with high-rise and semi-detached homes, all recording positive growth. Detached homes, however, saw a small decline, possibly reflecting softer demand for higher-priced luxury properties.

The report also highlighted ongoing concerns regarding property overhang. Unsold completed residential units rose to 32,801 units worth RM16.37 billion, while unsold completed serviced apartments increased further to 19,263 units valued at RM16.52 billion. This suggests that oversupply challenges, especially in the serviced apartment segment, continue to weigh on the market.

Meanwhile, occupancy levels for commercial properties remained relatively stable. Shopping complex occupancy held at 79%, while privately owned office buildings recorded a slight improvement to 72.3%. This indicates that while commercial property sectors still face pressure, leasing activity has remained relatively steady.

Overall, the latest market data shows that Malaysia’s property sector remains supported by underlying housing demand, affordable home transactions, and gradual economic restructuring under the MADANI Economy framework. However, developers and investors continue to face challenges related to oversupply, cautious consumer sentiment, and evolving market demand patterns. The report reinforces the importance of focusing on affordability, sustainable project planning, and strategic market positioning in navigating the next phase of Malaysia’s property market cycle.