Budget 2026 marks a return to steady, confidence-driven policymaking. In a period defined by global headwinds and domestic cost-of-living pressures, Malaysia’s focus on fiscal discipline and targeted support offers much-needed reassurance. With a projected gross domestic product (GDP) growth of between 4.0 and 4.5% for 2026 and targeted subsidy rationalisation saving approximately RM15.5 billion annually, the government has created the fiscal space to prioritise welfare, infrastructure, and housing programmes that directly benefit Malaysians.
Stability today is not passive; it is an active catalyst that rebuilds confidence and sustains long-term growth. Budget 2026 may not be expansionary in tone, but it is stabilising in substance. Stability in this environment sets the stage that can restore market confidence and encourage more deliberate, sustainable decision-making from both developers and homebuyers.
Laying the Groundwork for Sustainable Urban Growth
The increased allocation of RM6.09 billion to the Ministry of Housing and Local Government (KPKT) underscores the government’s continuing commitment to improving urban livability and community wellbeing. Of this, RM143 million has been allocated for stratified housing maintenance, including lift replacements, while RM672 million has been set aside for the People’s Residency Programme (PRR) and Rumah Mesra Rakyat (RMR), benefiting over 33,000 residents nationwide.
These initiatives represent the foundations of a resilient housing ecosystem. Budget 2026 also dedicates funding for upgrades in public areas, such as RM60 million for the construction and repair of public markets and stalls, and RM55 million for drainage improvements within local authority areas. Together, these measures strengthen the surrounding environment that makes housing liveable, safe, and sustainable.
Malaysia’s housing policy is maturing beyond quantity-driven goals. The emphasis is shifting from simply increasing supply to ensuring that the homes and neighbourhoods Malaysians live in are well-maintained, connected, and dignified. This signals a broader policy evolution – one that values long-term liveability and social resilience alongside affordability.
Building Confidence from Both Sides of the Market
For homebuyers, Budget 2026 extends several key measures that provide both reassurance and accessibility. The continuation of the full stamp duty exemption for first-time buyers purchasing properties valued up to RM500,000 until December 2027 offers much-needed clarity and predictability, particularly for those planning long-term commitments.
At the same time, the government’s decision to expand the Housing Credit Guarantee Scheme (SJKP) by an additional RM10 billion, bringing the total to RM20 billion, is expected to benefit a further 80,000 Malaysians who may not qualify for traditional financing. These measures collectively lower entry barriers and encourage homeownership among younger and lower-income households.
We commend the government for continuing these inclusive initiatives that open more pathways to homeownership, especially for first-time buyers and those without fixed income. Such efforts reflect a strong alignment with our mission to empower Malaysians to make confident property decisions.
For developers, the introduction of a 10% special tax deduction, capped at RM10 million, for converting commercial buildings into residential units is a forward-looking move. It addresses urban supply imbalances while promoting adaptive reuse and sustainability. As developers adapt to changing demand patterns in city centres such as Kuala Lumpur, Johor Bahru, and Penang, this incentive will help diversify supply pipelines and unlock new opportunities in urban regeneration.
Confidence flows both ways in the housing ecosystem. Homebuyers need assurance that they can plan and commit with confidence, while developers rely on policy stability and consistent incentives to invest in innovative solutions. Budget 2026 strikes this balance, creating a foundation for renewed confidence that can drive sustainable market recovery.
From Recovery to Renewal
Budget 2026 reflects maturity and discipline in Malaysia’s economic management. Rather than prioritising rapid expansion, it focuses on rebuilding confidence through well-targeted initiatives. We applaud the government for maintaining this balanced fiscal approach, which reinforces market confidence and supports the long-term sustainability of the property sector. By balancing fiscal reform with targeted housing and community investments, the government is reinforcing the foundation for sustained stability within the market.
As market sentiment gradually improves, Malaysia’s next phase of growth will depend on how effectively policy, planning, and market behaviour can align. Affordability will remain central but stability and trust will define the housing sector’s evolution.
Through the latest property insights and data, PropertyGuru and iProperty remain committed to supporting policymakers, developers, and home seekers to make confident property decisions. Together, we can ensure that today’s stability becomes the platform for tomorrow’s growth.
This article was written by Kenneth Soh, Country Manager – Malaysia, PropertyGuru and iProperty
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