PETALING JAYA: Despite measures announced under Budget 2027 to support the property sector, challenges such as the overhang of unsold properties remain a concern, highlighting the need for further intervention.
JLL Malaysia managing director Jamie Tan said the property overhang situation still needs to be addressed, as the available supply does not align with the needs of the target market.
He noted the need to look beyond national figures to identify the property types, price ranges and locations where unsold stock is concentrated.
“In Kuala Lumpur, for example, a substantial number of serviced apartments have small built-up areas of around 500 sq ft and were designed with short-term accommodation or investment demand in mind.
“These units may serve a particular market, but they are not necessarily suitable for young Malaysian families who want to live near their workplace,” he told StarBiz.
He added that Johor, meanwhile, had 9,946 units valued at approximately RM6.29bil.
“Together, these two markets accounted for a substantial share of Malaysia’s completed serviced apartment overhang. These figures highlight the importance of better matching supply to actual demand.”
Tan said it was not enough to keep building more units and assume that the market will absorb them.
“We need to consider who the intended occupiers are, what they can afford, the size and layout they require, and whether the location offers convenient access to employment and public transport.”
He highlighted that Budget 2027 also proposed full stamp duty exemptions on the relevant transfer instruments and loan agreements for white-knight contractors or developers and original purchasers involved in abandoned housing projects, for the period from 2027 to 2030.
“This is a useful measure because it can reduce some of the costs involved in reviving these projects.
“As at June 2026, the Housing and Local Government Ministry reported 100 abandoned private housing projects involving 27,998 units and 14,961 buyers.”
However, Tan believes that a stamp duty waiver alone won’t make an unviable project viable.
“A white-knight developer may have to assume substantial additional costs and risks, including construction cost escalation, financing costs, outstanding liabilities, legal disputes and the difficulty of renegotiating with existing buyers and creditors.
“Each project needs to be assessed on its own merits, with a clear understanding of its financial viability and the support required to complete it.
“Tax relief can help, but it cannot replace a workable recovery plan.”
Greenhill & Mason Sdn Bhd managing director Ruben Kelvin said the focus must shift from volume-driven output to asset quality and value across the entire property stock – not just new builds.
“Enforcing higher construction quality standards, energy-efficient design requirements, and wider adoption of Industrialised Building Systems (IBS) and modular construction ensures that new developments deliver long-term capital preservation and lower lifecycle maintenance costs.”
He added that the same discipline must extend to the secondary market.
“There needs to be a functioning renovation financing ecosystem, clear QLASSIC-equivalent standards for retrofitted properties and a secondary market that prices quality transparently,” said Ruben.
Quality Assessment System in Construction (or QLASSIC) is a system or method to measure and evaluate the workmanship quality of a building construction work.
“A property market sustained by volume alone, without quality standards embedded across both new and existing stock, is building tomorrow’s abandoned project problem today – and writing off the wealth that already exists in the hands of existing homeowners,” added Ruben.
Tan, meanwhile, is hopeful that the public and private sectors will work together on “more fundamental issues” such as the cost of delivering property.
“Construction costs, compliance requirements, financing costs, approval delays and cumulative taxes all affect the final price paid by the purchaser or tenant.”
Additionally, he said a review of the cumulative tax burden, including the cascading effect of the sales and service tax in parts of the construction supply chain, would be useful.
“Any reform should be designed carefully to reduce unnecessary cost accumulation without compromising tax revenue collection or regulatory standards,” said Tan.
Commenting on the recently tabled budget, Savills Malaysia group managing director Datuk Paul Khong praised the government for continuing its focus on first-time homebuyers and the affordable housing segment.
He noted that this was in line with the government’s broader social objectives.
“Whilst these initiatives are welcomed, it is not a property-led Budget and there are limited direct measures for the wider real estate sector. No goodies available.
“For property developers, investors and owners, there are no major game-changing incentives that will shift or influence the market direction.”
He pointed out that the renewable energy industry, for example, would have to rely on its own fundamentals, private-sector investments, infrastructure roll-outs and overall economic growth into 2027.
“The residential overhang issues remain a key concern and are not in this Budget.
“The impact on real estate is selective and targeted at certain segments as the broader market continues to chart its own course.”
Going forward, Khong said Malaysia’s property market remains fundamentally resilient.
“We hope and expect industrial, logistics, data centre-related assets, selected retail properties and growth corridors such as Johor areas continue to perform well despite the absence of property-specific incentives.”
Meanwhile, Lagenda Properties Bhd
is hopeful that the focus over the medium-to-long term will move from helping people buy homes to lowering the cost of building them.
“The Government could review developer contributions and utility charges, standardise approval timelines across states, and release state land near transit for affordable housing through public-private partnerships under the 13th Malaysia Plan.
“Developers can lower costs by using more IBS and standardised designs,” Lagenda said in a statement to StarBiz.
The affordable housing developer is also hopeful that the Government will work with banks and Syarikat Jaminan Kredit Perumahan Bhd (SJKP) to help first-time and self-employed buyers get their loans approved.
“Affordability will only last if homes are priced within reach, well located and viable to build,” said Lagenda.
SJKP provides a government guarantee scheme to help Malaysians without fixed income and pay slip to obtain a housing loan or mortgage from banks.
