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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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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