As Malaysians anticipate Budget 2026, the property market stands at an important crossroads. The 13th Malaysia Plan has outlined ambitious housing reform targets, including the delivery of one million affordable homes by 2035. However, the true challenge lies in ensuring that these goals are not only aspirational but translated into measures that respond directly to current market realities.
Recent data paints a picture of both challenges and opportunities. The National Property Information Centre reported that in the first half of 2025, Malaysia’s property transaction volume declined by 1.3 percent to 196,232 transactions, while transaction value rose by 1.9 percent to RM107.68 billion. This suggests a mixed environment in which fewer homes are changing hands, yet values remain resilient, reflecting cautious sentiment from buyers but also stable pricing trends. Such conditions highlight the need for policies that restore clarity and confidence in the market.
Demand for affordable housing remains especially strong, particularly for properties priced below RM300,000. PropertyGuru listings show that as of September 2025, there were more than 20,500 properties nationwide under this threshold, including about 2,500 in Kuala Lumpur. Yet many of these homes are older units located far from public transportation networks or in need of significant renovation, underscoring that affordability is not determined by price alone but also by accessibility and quality.
The challenge becomes clearer when affordability is measured against household income. NAPIC data reveals that the average house price in Malaysia stood at RM486,070 in the first quarter of 2025, well above what many B40 and lower M40 families can reasonably afford. While homes below RM300,000 are widely considered affordable, their availability in desirable locations remains limited. Encouragingly, however, buyer interest in this segment has shown resilience. Between April and June 2025, enquiries for homes under RM300,000 surged by 27.3 percent and remained steady through July. Although there was an 8.7 percent decline in such enquiries between December 2024 and September 2025 due to economic uncertainty, the recent rebound suggests that Malaysians are quick to re-engage when they sense greater stability and opportunity.
Location continues to be a decisive factor. Demand is strongest in Kuala Lumpur, Selangor, Johor, and Penang, where job opportunities, infrastructure, and amenities are concentrated. Budget 2026 could therefore have a significant impact by encouraging the development of mid-priced, transit-linked homes in these key corridors. In the meantime, rent-to-own schemes remain a practical solution for many households, particularly those in the lowest B40 income group where rental affordability averages around RM1,500. Well-designed rent-to-own programmes can offer a realistic path to eventual ownership while meeting immediate housing needs.
Another critical issue is aligning supply with actual demand. In recent years, developers have often focused on projects at higher price points, leaving a gap in the mid-market segment where most aspiring buyers are concentrated. NAPIC reported that new residential launches fell sharply in the first half of 2025, dropping by 46 percent to 23,380 units compared to 43,167 in the same period the year before. Meanwhile, the number of unsold completed homes rose by 16.3 percent to 26,911 units valued at RM18.6 billion. These figures reveal a clear mismatch between the types of housing being delivered and the needs of Malaysian households. Budget 2026 presents an opportunity to bridge this gap by supporting mid-market projects in urban centres, encouraging the redevelopment of underutilised land, and streamlining approval processes through digitalisation and more transparent timelines.
Affordability, however, is only one part of building a future-proof housing market. Increasingly, Malaysians are seeking homes that are not just affordable but also sustainable, energy efficient, and socially inclusive. Developers are beginning to respond to this demand by incorporating environmentally friendly features into their projects, from preserving large green spaces within townships to embedding low-carbon, smart-city technologies. Many new buildings are also attaining higher levels of green certification, demonstrating improvements in energy, water, and resource efficiency. These advances prove that sustainability is not merely an abstract ideal but a practical standard that can be scaled across the sector.
Budget 2026 could accelerate this shift by incentivising the use of green building technologies such as rooftop solar panels, water-efficient systems, and industrialised building systems that reduce waste and shorten construction time. At the same time, policies to encourage retrofitting older housing stock with energy-saving upgrades would help lower household costs while extending the value of existing properties. Equally important is social sustainability, which involves fostering mixed-income communities supported by public transportation, education, and healthcare access. Transparent disclosure of building performance standards, such as energy ratings and maintenance fund health, would also increase buyer confidence and encourage better asset management.
By integrating sustainability with affordability, Malaysia can move towards a housing market that is not only larger but also stronger, more resilient, and aligned with long-term national goals. Budget 2026 should therefore be seen as more than a fiscal policy exercise. It is an opportunity to reflect the realities of the current market while shaping the aspirations of future generations. By focusing on affordability, ensuring supply meets real demand, and embedding sustainability at the heart of housing policy, the government can ensure that the vision of the 13th Malaysia Plan translates into tangible outcomes for Malaysians.
PropertyGuru and iProperty remain committed to supporting this journey by working with policymakers, developers, and financial institutions to provide the insights and digital tools that empower Malaysians to make confident, informed decisions. With the right balance of policies, Budget 2026 can lay the foundation for a transparent, inclusive, and future-proof housing ecosystem, where every Malaysian has both the opportunity and the means to achieve homeownership.
