Malaysia’s real estate market in the first half of 2025 presents a mixed picture: transactions softened by 1.3% to 196,232, but total value rose 1.9% to RM107.68 billion. This tells us two things: investors are more selective, but they’re spending bigger on quality assets.

At the heart of the market, the residential sector still accounts for 6 out of 10 transactions — but rising unsold stock is a red flag. Meanwhile, the industrial and development land segments are powering ahead, fuelled by manufacturing, logistics, and investor confidence in future growth.

And at the state level? Johor emerges as the clear star, outperforming across residential launches, industrial demand, and the Johor–Singapore SEZ push. Kuala Lumpur continues to see high-value deals but is weighed down by unsold high-rise stock, while Selangor leads in new supply completions.

Market Breakdown by Sector

Sector Share of Volume Value (RM Billion) YoY Trend
Residential 61.3% 49.37 Flat
Agriculture 19.0% 8.63 Decline
Commercial 10.8% 24.45 Slight Growth
Industrial 2.1% 14.25 Strong Growth
Development Land 6.7% 10.98 Robust Growth

🔑 Takeaway: Residential remains the backbone, but the growth story lies in industrial and development land.

Residential Market — The Double-Edged Sword

The residential market clocked 120,307 transactions worth RM49.37B, maintaining dominance but flashing warning signs.

Demand Profile

Terraced houses remain Malaysians’ favourite (41%).
Affordable homes (≤RM300K) dominate 53.1% of sales, reflecting affordability constraints.
Secondary market (79.4%) dwarfs new sales.

New Launches Collapse

Units launched: 23,380, down nearly 50% YoY.
National sales performance: 24%, a marginal improvement.
Johor leads with 5,401 new launches, taking up 44% of all new units sold.

Unsold Stock Rising

Completed unsold units: 26,911 worth RM16.44B (+16.3%).
Kuala Lumpur: 3,643 (RM3.16B).
Perak: 3,266.
Johor: 3,209.

Overhang is heavily concentrated in condos and apartments (57.9%), pointing to a mismatch between supply and demand.

Price Movement

National MHPI: 227.3 points, average price RM490,376 (+0.7%).
Winners: Perlis (+7.2%) and Johor (+5.7%).
Terraced homes gained value (+2.4%) while high-rise prices fell (-1.1%).

Commercial Market — KL and Selangor Dominate

Commercial property transactions stood at 21,260 worth RM24.45B, a slight dip in volume but a gain in value.

Kuala Lumpur: Mega deals in Sungai Besi and Jalan Cheras cemented its role as the nation’s commercial hub.
Selangor: Consistent demand for shop offices and commercial plots, benefiting from Klang Valley spillover.
Secondary towns (Kedah, Pahang) saw modest shop lot activity but little large-scale investment.

Industrial Market — The Star Performer

If there’s one bright spot, it’s industrial. Transactions rose 8.5% to 4,148, with total value at RM14.25B (+5.6%).

Johor: Tanjung Langsat leads with petrochemical and logistics-driven demand.
Penang: Batu Kawan remains the E&E heartland.
Selangor: Shah Alam and Klang industrial zones remain magnets for logistics and manufacturing.
Negeri Sembilan: Benefiting from spillovers as an alternative to Klang Valley.
Industrial assets are increasingly the defensive play of Malaysia’s real estate market.

Agriculture and Development Land

Agriculture: 37,283 transactions worth RM8.63B, both volume and value down. Declining estate land demand signals a softening sector.
Development Land: 13,234 transactions worth RM10.98B (+18.3% value). Investor appetite is alive, particularly in Johor, Selangor, and Negeri Sembilan — states tied to growth corridors.

Policy Tailwinds

Government initiatives announced in Budget 2025 are designed to shore up demand:

RM405M for PRR projects (17,500 residents).
RM452M for Rumah Mesra Rakyat (5,410 homes).
RM10B housing credit guarantees for 20,000 buyers.
Tax relief: RM7K for ≤RM500K homes, RM5K for RM500K–750K homes.
RM5B Step-Up Financing Scheme to help youth buy homes.
RM200M for affordable housing on waqf land.
Forest City duty-free hub and Johor-Singapore SEZ incentives expected to boost Johor.

State-Level Hotspots

Johor: The growth powerhouse — leads in launches, price growth (+5.7%), industrial activity, and SEZ-driven demand.
Selangor: Largest completions (8,209 units), active mid-range market, and industrial backbone.
WP Kuala Lumpur: Strong commercial transactions but weighed down by RM3.16B in unsold stock.
Penang: Stable on high-rise and industrial growth (Batu Kawan).
Perak: Strong in affordable demand but challenged by unsold stock (3,266 units).
Kelantan & Kedah: Among rare growth states in residential transactions, led by affordability.
Perlis: Surprised with strongest price growth (+7.2%).

Strategic Insights for Stakeholders

Industrial is the New Safe Haven
Investors chasing stable returns are pivoting to industrial. Johor, Penang, and Selangor are the clear winners, driven by logistics and E&E.

Mismatch in Residential Supply
With more than 26,000 unsold completed units, the overhang is dominated by condos. Developers should pivot toward affordable landed housing, especially in states like Perak, Kedah, and Kelantan where demand is real.

Johor Is Malaysia’s Growth Engine for real estate
From leading across residential, industrial, new launches and SEZ-linked investments, Johor leads the national story. Stakeholders ignoring Johor risk missing the country’s biggest growth play.

Kuala Lumpur Is a Two-Sided Coin
High-value deals reinforce KL as a premium hub, but persistent overhang shows a need for product rebalancing in the high-rise segment.

Selangor Remains the Centre of Gravity
Its large completions and consistent demand make it a steady, reliable market. The state’s industrial corridors add further weight.

Policy Tailwinds Matter
Budget 2025’s guarantees, tax breaks, and financing schemes are designed to unlock first-time homebuyers and stimulate affordable demand.

Regional Diversification Is Key
Perlis and Negeri Sembilan show how smaller states can surprise. Investors with longer horizons should consider early entry into these emerging markets.

Source & Data Attribution

This article is based on the Laporan Pasaran Harta Separuh Tahun Pertama 2025 published by the National Property Information Centre (NAPIC), Jabatan Penilaian dan Perkhidmatan Harta (JPPH), Kementerian Kewangan Malaysia.

📄 Full report available at: [NAPIC Official Site]

FAQ

Q1: What is the total transaction value in Malaysia’s property market H1 2025?
A: RM107.68 billion, up 1.9% from H1 2024.

Q2: Which state had the most new residential launches?
A: Johor, with 5,401 units launched and a strong 44% take-up rate.

Q3: Which state recorded the highest unsold completed units?
A: Kuala Lumpur, with 3,643 unsold homes worth RM3.16B.

Q4: Which states recorded transaction growth in H1 2025?
A: Johor, Kelantan, Kedah, Kuala Lumpur, and Negeri Sembilan.

Q5: What is the strongest performing sector in Malaysia’s property market 2025?
A: The industrial sector, with an 8.5% increase in transactions and strong demand in Johor, Penang, and Selangor.