The Malaysia property market in 2025 is showing signs of resilience but is weighed down by affordability pressures, a persistent overhang of unsold units, and new policy shifts. According to the latest NAPIC Q1 2025 figures and Rehda’s Property Industry Survey, the year ahead will be defined by cost challenges, cautious developer sentiment, and structural reforms.

Q1 2025 Property Market Highlights

Completions fell sharply to 9,329 units, compared with 26,814 in Q4 2024.
New starts remained healthy at 28,344 units, showing developers are preparing cautiously for future demand.
New planned supply slowed to just 8,342 units, reflecting a cautious approach to avoid worsening the overhang.
Overhang remains high, especially for high-rise apartments priced above RM500,000, concentrated in Johor and Selangor.
House prices continued modest growth, with terraced houses showing the most resilience.

Developer Sentiment: Sharp Downturn

The latest Rehda survey (Sept 2025) shows confidence collapsing:

Only 19% of developers are optimistic about the market outlook, down from 51% earlier this year.
Just 41% plan new launches in 2H 2025, compared with 56% previously.
62% are not acquiring new land, reversing the expansion appetite from earlier in the year.
73% of developers expect to raise prices, mostly in the 3%–5% range, to cope with rising costs from SST, labour, and materials.
Buyers are also struggling, with 64% of developers reporting loan rejections as a major hurdle to sales.

Policy Shifts: What to Watch

Two policy discussions are likely to influence the property market in the near term:

URA Bill (Urban Renewal Act): Designed to speed up redevelopment of ageing housing, but raises questions around owner consent and fair compensation. If passed, it could accelerate supply of redeveloped housing in urban areas.
STB vs BTS Models: The government is pushing incentives for Build-Then-Sell (BTS) to protect buyers from abandoned projects, but developers warn it may increase costs and slow supply compared to the traditional Sell-Then-Build (STB) model.
Both debates reflect a shift toward stronger buyer protection and urban renewal, but they also add uncertainty for developers.

What Buyers & Developers Should Expect

Higher prices ahead: With SST and construction costs rising, most developers will raise prices in 2025.
Fewer new launches: Supply is tightening, especially in high-end and large land-intensive projects.
Financing hurdles: Buyers may face stricter loan approvals, reducing purchasing power.
Mid-range demand: Landed and mid-market properties below RM500,000 will remain the strongest segment.
Opportunities in connected townships: Projects near MRT3, RTS, and other infrastructure upgrades will continue to see demand despite broader caution.

Outlook for 2025

The Malaysia property market 2025 is shifting into a cautious phase:

Transactions should remain stable, but selective.
Prices will rise moderately, driven by cost push rather than strong demand.
Developers are focusing on efficiency and affordability to weather weak sentiment.
Buyers will need to act decisively in well-located projects, as fewer launches limit options.

FAQ on Malaysia Property Market 2025

1. Will house prices rise in 2025?
Yes. Around 73% of developers plan to raise prices, mostly by 3%–5%, due to higher costs.

2. Why are developers less confident now?
Rising construction costs, SST, financing hurdles, and weaker economic conditions have reduced confidence to just 19%.

3. What is the biggest problem facing the market?
The persistent overhang of unsold high-rise homes priced above RM500,000, combined with affordability challenges.

4. Will there be fewer new property launches?
Yes. Only 41% of developers plan new launches in 2H 2025, down from 56% earlier this year.

5. How will the URA Bill and BTS model affect buyers?
Both are aimed at protecting buyers—URA accelerates urban renewal while BTS reduces risk of abandoned projects—but they could also mean higher costs and slower supply.