Bank Negara Malaysia Reduces OPR to 2.75% - First Adjustment Since 2023
Bank Negara Malaysia’s Monetary Policy Committee (MPC) has decided to reduce the Overnight Policy Rate (OPR) by 25 basis points to 2.75%, lowering the ceiling and floor rates to 3% and 2.5%, respectively. This decision comes amid a global economic environment that continues to grow, supported by strong consumer spending, resilient labor markets, and fiscal stimulus. However, uncertainties such as geopolitical tensions and fluctuating trade policies pose potential risks to global financial stability and commodity prices. In Malaysia, economic activity remains robust, with continued growth expected in the second quarter, driven by strong domestic demand and steady exports. Employment and wage gains, particularly in domestic-oriented sectors, along with supportive policy measures, are sustaining household spending. Investments are also expected to grow, supported by public and private sector projects and strategic national initiatives. Export prospects may improve due to pro-growth global policies and sustained demand for key products like electrical and electronic goods. Inflation remains moderate, with headline and core inflation averaging 1.4% and 1.9% respectively in the first five months of 2025. With global cost pressures contained and domestic demand steady, inflation is expected to remain subdued. The ringgit’s performance will continue to be shaped by external factors, though Malaysia’s solid economic fundamentals and reforms offer support.
Date: July 9, 2025
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13MP: Only Financially Strong Developers May Survive in New Build-Then-Sell Plan
The 13th Malaysia Plan proposes making the build-then-sell housing model mandatory by amending the Housing Development Act 1966, a move expected to reshape the property market and trigger industry consolidation, according to Hong Leong Investment Bank (HLIB) Research. The new model requires developers to fund construction upfront, increasing their financial burden and potentially reducing new project launches, affecting housing supply, affordability, and causing ripple effects across the financial and construction sectors. However, developers with strong finances and recurring income may adapt well.
Aug. 1, 2025
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Malaysia's Property Market Faces Deepening Supply-Demand Mismatch
Malaysia’s housing market is experiencing a growing disconnect between supply and actual demand, particularly for affordable homes. Developers continue to prioritize mid- and high-end properties despite persistent affordability challenges faced by B40 and M40 income groups. Dr. Suraya Ismail of Khazanah Research Institute highlighted that only a small fraction of new launches are priced below RM200,000, while the majority of unsold or overhang units are above RM300,000. She warned that oversupply in urban centers, stagnant income growth, and weak coordination in project approvals are exacerbating the housing crisis. Despite high demand in the sub-RM300,000 segment, developers remain optimistic, often backed by financing or partnerships, though this confidence may be misplaced.
The property glut extends beyond completed but unsold units, encompassing under-construction projects with little demand and vacant investor-owned homes. Rental yields remain weak, often falling below mortgage costs, particularly in areas like Mont Kiara and Cyberjaya. Suraya criticized speculative practices such as pegging rental prices to loan repayments and raised concerns over Joint Management Bodies (JMBs) enforcing minimum rent thresholds, distorting market signals. She stressed the need for formalizing the rental sector with a Rental Tenancy Act and urged the government to adopt indicators like rent-to-income ratios to guide housing policies. The current value system, she argued, favors profiteering over equitable access to housing.
July 1, 2025
Tags: Malaysia
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NAPIC: Property Market Malaysia - 2025 Q1
In the first quarter of 2025, Malaysia's property market experienced a decline in both transaction volume and value, with 97,772 deals worth RM51.42 billion — a drop of 6.2% and 8.9% respectively compared to the same period in 2024. The residential sector continued to dominate, accounting for over 59,000 transactions worth more than RM24 billion. While the industrial segment saw a slight 0.3% year-on-year increase, both the agriculture and commercial sectors recorded declines of 10.6% and 5.4%, respectively.
Despite the dip in transactions, construction activity surged. A total of 28,344 properties began construction in Q1 2025, a sharp increase from 21,391 in the previous year. Notably, serviced apartment construction starts doubled, rising from 5,458 units to 14,761, and new residential launches more than doubled to 12,498 units. The Malaysian House Price Index rose by 0.9% to 225.3 points, pushing the average house price to RM486,070. Most states recorded modest price increases, while Sabah, Sarawak, and Kuala Lumpur saw a 2.4% decrease.
However, residential overhang — unsold but completed homes — worsened, reaching 23,515 units valued at RM15 billion. In contrast, the overhang for serviced apartments improved, falling 6.7% in volume and 6.9% in value. This improvement was particularly evident in Johor, where initiatives like the Forest City special financial zone, the Johor-Singapore special economic zone, and Pulau Satu’s duty-free status helped reduce the serviced apartment overhang to 5.6% in Q1 2025.
May 9, 2025
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Malaysia’s Property Market Set for Moderate Growth in 2025 Amid Global Uncertainty
The Malaysian property sector is anticipated to experience moderate growth in 2025, with projected sales reaching RM21.5 billion. This outlook comes despite global uncertainties tied to potential shifts in U.S. leadership and their impact on artificial intelligence policies, which may slow multinational data centre investments in Malaysia. However, Affin Hwang Investment Bank Research maintains a positive "overweight" rating on the sector, citing strong fundamentals such as improving connectivity, rising industrial demand, and supportive government policies. Key developers like Eco World, Sime Darby Property, and IOI Properties are seen as well-positioned to benefit from these favorable conditions, with expectations of improved profit margins driven by higher demand and gradual price increases.
In 2024, the sector achieved RM19.3 billion in sales, primarily from homes priced below RM600,000. Although new launches surged to their highest since 2017 at 75,784 units, absorption rates declined slightly, reflecting more cautious buyer sentiment. Despite this, developers under Affin Hwang’s coverage outperformed the market, supported by steady residential demand and growth in the industrial segment. The research firm expects growth to continue in 2025, backed by initiatives such as stamp duty exemptions for first-time buyers and relaxed requirements under the Malaysia My Second Home programme. Additionally, the anticipated strengthening of the ringgit and renewed infrastructure projects, particularly in Johor, are expected to further boost market sentiment and foreign interest.
April 17, 2025
Tags: Malaysia
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Malaysia’s Property Market Hits Decade High in 2024, Driven by Strong Economic Policies
Malaysia’s property market in 2024 recorded its strongest performance in a decade, with 420,525 transactions worth RM232.3 billion — a 5.4% increase in volume and an 18% jump in value compared to 2023. This growth, according to the 2024 Property Market Report by the Valuation and Property Services Department (JPPH), surpasses the 2014 peak of 384,060 transactions. Finance Minister II Datuk Seri Amir Hamzah Azizan attributed this surge to Malaysia's solid 5.1% economic growth and proactive government initiatives under the Madani Economy framework, including the relaxation of MM2H conditions, new industrial projects, and the establishment of a Special Financial Zone in Forest City.
Newly launched residential projects also saw a notable uptick, with 75,784 units launched and a sales performance of 37.3%, driven by activity across nearly all states. The overhang issue improved as unsold completed units dropped by over 10% in volume and over 21% in value. Residential construction activity showed growth across all stages, while shopping complex occupancy slightly increased to 78.8%. The Malaysian House Price Index rose moderately to 225.6 points, with an average price of RM486,678, reflecting a 3.3% annual gain.
Looking ahead to 2025, Amir Hamzah projected continued resilience in the property market, supported by an anticipated 4.5–5.5% national economic growth. The government plans further incentives, including tax relief for housing loan interest and increased funding under the Housing Credit Guarantee Scheme. Catalytic developments such as the Johor-Singapore Special Economic Zone (JS-SEZ), East Coast Rail Link (ECRL), and Pan Borneo Highway are expected to attract investors and stimulate the market further. Emphasis was also placed on the importance of accurate data reporting to the National Property Information Centre (NAPIC) to guide future policy-making and ensure sustainable industry growth.
Feb. 26, 2025
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