PETALING JAYA: With the dust settling on Budget 2027, the focus now shifts to how its initiatives will shape the property market going forward.
What more needs to be done to sustain the sector’s growth, and what challenges lie ahead beyond Budget 2027?
JLL Malaysia managing director Jamie Tan said the measure under Budget 2027 that most directly impacts the residential property market is the expansion of stamp duty exemptions for first-time homebuyers.
“Purchases of homes priced up to RM500,000 will enjoy full exemption on the transfer instrument and loan agreement, while for homes priced between RM500,000 and RM750,000, the first RM500,000 will be fully exempted and the balance price will receive a 50% exemption.
“This applies to sale and purchase agreements signed between Jan 1, 2027 and Dec 31, 2030,” he told StarBiz.
He noted that while this will not fundamentally change housing affordability, he said it would help to reduce the significant upfront cost of buying a first home.
“This is especially for younger buyers who may have limited savings after paying for their downpayment, legal fees and other expenses.
“For a home priced at RM750,000 with 90% financing, the stamp duty savings could amount to approximately RM15,700, subject to the final implementation details,” he said.
“That is a meaningful amount for a first-time buyer, although it does not reduce the purchase price or monthly loan instalments.”
CBRE | WTW group managing director Tan Ka Leong expects the measures announced under Budget 2027 to provide support mainly to the owner-occupier and affordable housing segments.
“The stronger pipeline of affordable housing closer to employment centres and within established urban areas should gradually change buyer expectations.
“The range of affordable housing options is also much broader than in the earlier stages of these programmes, which is encouraging as buyers now have more choice in terms of location, product and accessibility,” he pointed out.
Ka Leong said younger households will also have more options to remain closer to the city, instead of moving further out purely for affordability.
“Where these schemes come with lock-in periods, they should also encourage longer-term owner occupation and allow buyers to build equity over time rather than treating the units as short-term investment products.”
Ka Leong added that infrastructure improvements will remain an important demand driver.
“Better connectivity should improve the attractiveness of existing suburban locations and create new residential growth corridors over time.”
Greenhill & Mason Sdn Bhd managing director Ruben Kelvin observed that construction cost inflation is quietly eroding viability.
“Construction cost inflation is quietly eroding viability. The Producer Price Index averaged 4.6% for the first eight months of 2026, with crude materials for further processing up 15.4%.
“RON95 and diesel rationalisation, while necessary from a fiscal standpoint, have raised transport and logistics costs for construction supply chains.
“Ready-mixed concrete, steel bars and roofing tile production costs do not move independently of fuel.”
Ruben also highlighted the National Housing Policy 2026 to 2035, which explicitly acknowledges the issue of delayed and abandoned housing projects as a structural problem requiring dedicated intervention.
“In my experience working with contractors and project owners, abandoned projects destroy public trust in the housing purchase process far more durably than any price hike.
“Until there is a credible, funded rescue mechanism that resolves legacy abandoned projects – not just a policy framework – buyer sentiment at the affordable and mid-market tier will continue to carry an embedded risk premium.”
Additionally, Ruben hopes to see more investment in the mid-market segment, rather than a focus solely on the lower end of the market.
“The affordable housing discourse in Malaysia is appropriately focused on units below the affordability threshold – that is where the greatest unmet need sits.
“But the property market’s overall health depends on a functioning mid-market tier – households earning RM6,000 to RM12,000 monthly that are priced out of Program Residensi Rakyat (PRR) or Rumah Mesra Rakyat (RMR) eligibility, but cannot sustain the carrying costs of new launches above RM700,000.”
The PRR and RMR refer to two different government-supported housing programmes aimed at helping lower-income Malaysians access affordable homes.
As such, Ruben said that the mid-market segment is “falling through the gap”.
“When the mid-market hollows out, transaction velocity in the secondary market stalls with it.
“This is because mid-market buyers are also the natural upgraders from affordable stock and the natural sellers feeding into the secondary pipeline.”
Olive Tree Property Consultants founder and chief executive officer Samuel Tan, meanwhile, said the property overhang issue needs to be properly addressed.
“Budget 2027 does little to clear existing stock. As of the first quarter of financial year 2026, completed unsold residential units stood at 32,801 (RM16.37bil) and unsold serviced apartments at 19,263 (RM16.52bil).
“This was the sixth consecutive quarterly rise in residential overhang.
“Stamp duty relief up to RM750,000 will not move most of this stock, particularly serviced apartments.”
Samuel called for more decisive measures to directly address the property overhang issue.
“This means targeted measures for serviced apartments, such as conversion or repurposing options, rent-to-own and bulk-purchase schemes, and launch approvals guided by locality-level absorption data.”
