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“KPKT is studying an Option to Purchase clause under the proposed Real Property Development Bill to reduce abandoned and delayed housing projects in Malaysia.”
Kuala Lumpur, 08th May 2026, 3.30pm – The Ministry of Housing and Local Government Malaysia is evaluating the introduction of an Option to Purchase (OTP) clause under the proposed Real Property Development Bill as part of broader reforms aimed at reducing delayed, sick and abandoned housing projects nationwide.
Housing and Local Government Minister Nga Kor Ming said the proposed mechanism forms part of the government’s Reformasi Perumahan Madani agenda to modernise Malaysia’s housing regulatory framework and strengthen long-term industry sustainability.
Proposed OTP mechanism to reduce early project risks
Under the proposed system, both homebuyers and developers would be allowed to withdraw from a property transaction before the execution of the Sales and Purchase Agreement (SPA).
Nga said the approach could reduce premature financial and legal commitments while enabling developers to better gauge actual market demand before advancing construction.
“The proposed OTP clause gives both parties greater flexibility before signing the SPA, while helping developers assess real market demand and project viability,” he said during the StarProperty Awards 2026.
Preventing financial bottlenecks and unsold units
According to Nga, the mechanism could help developers avoid financial strain arising from weak sales performance during construction phases.
He noted that stronger demand validation at the early stage may reduce risks associated with:
- Sick housing projects
- Project abandonment
- Unsold residential units
Industry observers say the move could introduce a more market-driven approach to project launches while improving financial discipline within the property sector.
Malaysia property market records strongest performance in a decade
Nga also highlighted the strong performance of Malaysia’s property market, which recorded over RM240 billion in transaction value in 2025, the highest level seen in the past 10 years.
The growth reflects improving market confidence supported by political stability and favourable economic conditions.
More than 1,500 sick projects revived
Since December 2022, KPKT’s special task force on sick and abandoned housing projects has successfully revived over 1,500 housing developments nationwide.
The revived projects represent a combined gross development value (GDV) exceeding RM140 billion, benefiting more than 176,000 homebuyers.
Digital transformation across housing ecosystem
In parallel with legislative reforms, the ministry is also accelerating digitalisation initiatives across the housing sector through platforms such as:
- e-SPA
- TEDUH (Transforming and Empowering Data Usage in Housing)
- Housing Integrated Management System (HIMS)
These systems aim to improve operational efficiency, transparency and data management throughout the housing ecosystem.
Targeting zero sick housing projects by 2030
Nga reaffirmed the government’s target of achieving zero sick housing projects by 2030, stressing that collaboration between the public and private sectors will be essential.
He added that the Madani government remains committed to delivering quality, sustainable and affordable housing while strengthening consumer protection and industry resilience.
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