As Malaysians await Budget 2026, the property market is at a crossroads. The 13th Malaysia Plan (13MP) sets ambitious housing reform goals, including the delivery of one million affordable homes by 2035, but the real test lies in translating this ambition into measures that address what the market is experiencing today.
Recent market data shows both challenge and opportunity. According to the National Property Information Centre (NAPIC), Malaysia’s property transaction volume fell by 1.3% in H1 2025 to 196,232 transactions, while transaction value rose by 1.9% to RM107.68 billion. These figures suggest a mixed market with fewer transactions but higher overall value, reflecting cautious buyer sentiment alongside resilient pricing. This points to a market waiting for renewed clarity and support.
We observe that demand for affordable housing remains strong, particularly for homes priced below RM300,000. As of September 2025, more than 20,500 properties nationwide are listed on PropertyGuru under this threshold, with about 2,500 in Kuala Lumpur alone. Yet many of these homes are existing housing stock further from public transportation services or require significant renovation, highlighting that affordability is about more than price alone.
Affordability in Practice
Affordable housing is not just about hitting numerical targets, but ensuring homes are realistically within reach for households. NAPIC reported that the average house price in Malaysia stood at RM486,070 in Q1 2025, far above the affordability level for many B40 and lower-M40 families. Based on income levels, homes under RM300,000 are considered affordable but their availability in desirable locations remains limited.
Our platform data shows encouraging resilience in buyer behaviour. Enquiries for homes under RM300,000 surged by 27.3% from April to June 2025 and remained steady through July, reflecting the positive impact of policy support and stabilising sentiment. While there was a dip between December 2024 and September 2025, where enquiries for homes under RM300,000 fell by 8.7% amid economic uncertainty, this recent rebound highlights that Malaysians are quick to re-engage when they see both opportunity and stability in the market.
Location remains critical. Demand for affordable homes is highest in Kuala Lumpur, Selangor, Johor, and Penang — states where jobs, infrastructure, and amenities are concentrated. Budget 2026 could have an outsized impact by encouraging the development of mid-priced, transit-linked homes in these high-demand corridors. In the meantime, Rent-to-Own (RTO) schemes provide a practical bridge for many families. For the lowest B40 households, where rental affordability hovers around RM1,500, well-structured RTO programmes offer a path to eventual ownership while addressing immediate housing needs.
Aligning Supply with Real Demand
The challenge in Malaysia lies in ensuring that housing supply is both adequate and aligned with the needs of home seekers. Some projects target higher price points, leaving gaps in the mid-market segment where majority of aspiring buyers are searching. According to NAPIC, new residential launches fell by 46% in H1 2025 to 23,380 units, compared to 43,167 units in H1 2024. At the same time, the number of unsold completed homes rose by 16.3% to 26,911 units valued at RM18.6 billion.
Budget 2026 has the chance to narrow this gap. Supporting mid-market projects in urban corridors where demand is strongest, encouraging redevelopment of underutilised areas, and streamlining approvals through digitalisation and clearer timelines would ensure new supply better reflects the realities of Malaysian households.
Sustainable Housing and ESG
Affordability alone will not future-proof Malaysia’s property sector. Increasingly, Malaysians are asking for homes that are not only affordable, but also environmentally sustainable, energy-efficient, and socially responsible. Recent developments in the market show how developers are beginning to integrate such principles into their projects, from preserving large tracts of green space within township masterplans to embedding low-carbon and smart-city features that enhance liveability while reducing environmental impact.
At the same time, new buildings are attaining top-tier green certifications, showcasing advances in design that deliver measurable benefits in energy, water, and resource efficiency. These developments indicate that sustainability is not an abstract ideal but an achievable standard that can be scaled across the sector. This aligns with global ESG priorities and can reduce long-term costs for households while safeguarding asset values.
Budget 2026 could help accelerate the shift by incentivising the adoption of green building technologies, from rooftop solar panels and water-efficient systems to industrialised building systems (IBS) that cut waste and speed up construction. At the same time, policies that encourage retrofitting existing housing stock with energy-saving upgrades would lower monthly outgoings for families while extending the lifespan of older properties.
Equally important is social sustainability. Creating frameworks for liveable, mixed-income communities supported by transit, education, and healthcare access ensures housing policy contributes to broader national goals of inclusivity and mobility. Clearer disclosure of building performance standards, such as energy ratings and maintenance fund health, would also boost buyer confidence and encourage better stewardship of assets over time.
By integrating ESG considerations into housing policy, Malaysia can build not only more homes, but better homes that are efficient, resilient, and aligned with the country’s long-term development trajectory under 13MP.
Future-Proofing the Housing Ecosystem
Budget 2026 is more than a fiscal exercise. It is an opportunity to reflect the realities of the market and the aspirations of Malaysians. By focusing on affordability, aligning supply with real demand, and embedding sustainability at the heart of housing delivery, the government can ensure that the vision of 13MP translates into tangible outcomes.
At PropertyGuru and iProperty, we remain committed to partnering with policymakers, developers, and financial institutions to provide the insights and digital tools that help Malaysians make confident, informed decisions. Budget 2026 can lay the foundation for a transparent, inclusive, and future-proof housing ecosystem, where every Malaysian has a real choice, and a real chance, at homeownership.
This article was written by Kenneth Soh, Country Manager – Malaysia, PropertyGuru and iProperty
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