PETALING JAYA: Malaysia’s property purchasing sentiment is showing signs of moderation as persistent inflationary pressures, rising living costs and affordability concerns lead buyers to adopt a more cautious approach.
Olive Tree Property Consultants founder and chief executive officer Samuel Tan said purchasing sentiment is showing signs of cooling due to inflationary pressures.
However, he noted that the market “is not stalling”.
“There is an obvious cost and construction impact. Geopolitical tensions have spiked building material costs by an estimated 30% to 40%. This makes developers more selective with new projects and raises concerns about future pricing,” he told StarBiz.
Despite the higher costs, Tan said property remains a strong hedge against inflation.
“Rising construction costs make it expensive to build new properties, which helps support the value of existing ones. The affordability sweet spot is when demand is polarising.
“While the luxury segment slows, the mid-range market (RM300,000 to RM600,000) remains robust, driven by genuine first-time buyers taking advantage of stable interest rates.”
PPC International Sdn Bhd managing director Datuk Siders Sittampalam concurred that the Malaysian property market remains active, but noted that purchasing behaviour has become more measured compared to previous cycles.
“Buyers are no longer transacting aggressively, reflecting a shift toward more cautious and selective decision-making.
“In the first quarter of 2026, the market recorded a moderation, with transaction volumes declining by approximately 8% year-on-year (y-o-y). This trend largely reflects a more guarded approach among buyers amid economic uncertainties and inflationary pressures.”
According to the Statistics Department, Malaysia’s inflation – as measured by the Consumer Price Index – rose 1.9% y-o-y in April 2026 to 136.9, compared to 134.3 in the same month last year.
Siders noted that this indicated “a gradual increase, but not an alarming surge”.
“Importantly, Malaysia is not experiencing runaway inflation. Price pressures remain relatively contained, supported by subsidies and controlled pricing mechanisms.
“Bank Negara Malaysia has also maintained the overnight policy rate at 2.75%, helping to preserve monetary stability and sustain overall market confidence.
“While certain segments are experiencing slower momentum, the moderation is expected to be selective and gradual, rather than indicative of a sharp downturn in purchasing sentiment.”
Siders said demand remains comparatively resilient in key segments such as landed residential properties (particularly non-high-end), transit-oriented developments, industrial and logistics assets, as well as affordable and mid-market housing driven by owner-occupiers.
“This suggests that the market is not weakening uniformly across all sectors. Instead, the current moderation is uneven and segment-specific, rather than systemic.
“The absence of a broad-based slowdown can be attributed to stable interest rates, a well-capitalised banking system, supportive employment conditions, and manageable levels of household debt.”
In essence, Siders said the moderation in Malaysia’s property market reflects a shift toward more selective, fundamentals-driven demand rather than a widespread contraction across the economy.
Meanwhile, a property analyst similarly acknowledged that purchasing sentiment has been moderating amid ongoing inflationary pressures. “Recent market trends indicate a softer, but still resilient property sector.
“While transaction values have remained relatively stable, overall transaction volumes have eased, suggesting that buyers are taking a more measured approach.”
He said inflation and higher construction costs continue to weigh on affordability, particularly for first-time and middle-income buyers.
“Purchasers are now placing greater emphasis on factors such as location, connectivity, build quality and pricing, signalling a shift toward more fundamentals-driven demand instead of speculative buying.”
He said oversupply concerns – especially in high-rise and serviced apartment segments – are also dampening sentiment.
“Many completed units remain unsold, highlighting a mismatch between available supply and buyer preferences or financing capabilities. However, relatively stable interest rates and supportive monetary conditions have helped prevent a sharper slowdown.”
He added that demand for well-located and competitively priced properties in key urban areas continues to hold up, indicating that the market remains active despite softer sentiment overall.
“Overall, Malaysia’s property market is showing signs of moderation rather than decline, with buyers becoming increasingly value-conscious in response to inflationary pressures and broader economic uncertainty.”
Tan said the current reset in the market brings specific opportunities for potential buyers. “With construction costs high and new project timelines uncertain, experts currently favour the sub-sale (secondary) market. Buyers can inspect ready-to-move-in units and often have stronger negotiation power on price.”
Tan said the emphasis now will be on the “fundamentals”. “The era of speculative buying is fading. Investors are prioritising locations with good infrastructure, environmental, social and governance-compliant buildings, and genuine rental demand over short-term flipping.”
With uncertainties in the midst of geopolitical tensions and rising costs, he said many are adopting a “wait-and-see” approach.
“We hope Budget 2027 will take radical steps to mitigate a drastic slowdown in the property market. Any savings should be passed down to the end-purchasers. Incentives given by the government must not just benefit the primary market. The secondary market must remain robust.
“Apart from the usual stamp duty exemptions, grants can be given to qualified first-time house buyers,” he added.
