“Malaysia’s property market outlook for 2H 2025 remains cautiously optimistic, says FIABCI Malaysia, citing stable transactions, rising house prices, and government housing initiatives despite oversupply risks.”
Kuala Lumpur, 09th September 2025, 11.08am – Despite global economic uncertainties, Malaysia’s property market is projected to remain cautiously optimistic in the second half of 2025, supported by resilient market data across multiple segments, according to the International Real Estate Federation (FIABCI) Malaysia Chapter.
FIABCI Malaysia president, Datuk Seri Dr Yu Kee Su, said in a statement that the latest National Property Information Centre (NAPIC) snapshot showed resilience in the market during the first half of 2025, despite challenging conditions.
Stable Market Activity
From 1H 2021 to 1H 2025, Malaysia’s property transaction volume and value recorded consistent performance. While growth has slowed, the steady trend reflects stability in the market.
In terms of supply, a total of 23,380 new residential units were launched, with 24% sold. Landed residential properties recorded a higher take-up rate (28.5%) compared to high-rise units (12.9%).
Concerns Over Unsold Completed Units
However, unsold completed properties remain a concern. As of 1H 2025, there were 26,111 units valued at RM16.44 billion still in stock, particularly in mid-range segments and certain states.
On the commercial front, supply and occupancy rates for purpose-built offices and shopping complexes remain stable. Meanwhile, the Malaysia House Price Index grew in Q2 2025 compared to the same period last year, signaling sustained property value growth. The strongest increases were recorded in Perlis (7.2%), Johor (5.7%), and Kelantan (5.6%).
Structural Challenges in High-Rise Segment
Dr Yu highlighted that while serviced apartment prices in major cities such as Kuala Lumpur, Johor Bahru, and Penang are gradually recovering, oversupply remains a structural challenge.
He urged stronger collaboration between the federal government, local authorities, and developers to align housing supply with market demand and affordability.
Call for Data-Driven Housing Policies
Government initiatives such as tax relief for first-time homebuyers and the target to build 1 million affordable homes under the 13th Malaysia Plan are positive steps. However, Dr Yu cautioned that “simply building more units is not the sole solution – we need to build the right units at the right locations.”
He suggested leveraging advanced tools like the Property Information System Malaysia (PRISM 2.0) to conduct localized market analysis, preventing oversupply in micro-markets.
Proposals for Market Sustainability
FIABCI Malaysia also recommended:
- Build-to-Rent (BTR) schemes for high-rise projects.
- Transit-Oriented Development (TOD) to integrate affordable housing with public transport networks.
- Repurposing idle commercial spaces into co-living facilities, data centres, or alternative uses.
Market at a Turning Point
“Malaysia’s property market is at a critical turning point. While resilience remains, the sector must be guided correctly,” Dr Yu stressed.
“By shifting from broad policies to targeted, data-driven measures, we can address market mismatches more effectively and steer towards a sustainable and balanced recovery.”
