PETALING JAYA: Malaysia’s property developers remain cautiously optimistic about the market outlook for 2026, although global geopolitical tensions could dampen sentiment going forward, according to the Real Estate and Housing Developers’ Association Malaysia (Rehda).
Rehda president Datuk Ho Hon Sang said the industry is seeing some improvement in sentiment, but warned that recent developments in the Middle East could affect the outlook for the sector.
“While the sign of optimism is positive, it should be noted that these surveys were conducted prior to the current situation in the Middle East,” he said at a media briefing today.
“We are aware that sentiment is likely to be different now as the conflict will definitely have an impact on the rest of the world in one way or another, and Malaysia is not exempted.”
The latest Rehda Property Industry Sentiment Survey, conducted by Rehda Institute, gathered responses from 107 CEOs and senior management from developer companies to gauge their views on market conditions.
The survey showed that 83 respondents launched projects in the second half of 2025, with 29% reporting better sales performance compared with the previous half-year period. Developers’ outlook for the market improved slightly, with 33% expressing optimism compared with 27% recorded in the first half of 2025.
However, a separate and more detailed property industry survey, which collected operational data from 166 Rehda members, showed that actual market performance remained challenging during the period.
A total of 17,971 residential units were launched in the second half of 2025, representing a marginal increase of 0.6% compared with 17,859 units launched in the first half of the year.
Sales performance weakened significantly, with only 3,784 units sold during the period, translating into a take-up rate of 21%, down from 38% in the previous half.
Serviced residences recorded the highest number of units sold, followed by apartments and condominiums, while townhouses registered the highest take-up rate at 60%.
In terms of pricing, homes priced at RM500,000 and below accounted for the largest share of launches at 36%. Within this category, units priced between RM300,001 and RM500,000 made up the bulk at 28%, while properties priced below RM300,000 represented 8%.
Meanwhile, properties priced between RM1 million and RM2.5 million accounted for 26% of launches, mainly located in areas such as Shah Alam and Johor’s Iskandar Puteri and Tebrau.
Despite the launches, unsold inventory remains a key concern for developers.
The survey found that 60% of respondents reported unsold completed residential units as at Dec 31, 2025.
Two- to three-storey terrace houses accounted for the largest share of unsold completed units at 26%, followed by serviced residences at 19% and single-storey terrace houses at 18%.
Respondents cited end-financing loan rejection, high property prices and weak demand as the main reasons for the unsold units.
Loan rejection was particularly prevalent for homes priced between RM500,001 and RM700,000, with rejection rates ranging between 31% and 45%.
Developers said the main reasons for loan rejection included buyers failing to meet income eligibility requirements, adverse credit histories and inadequate financial documentation.
At the same time, developers continued to face rising operating costs and construction challenges.
The survey revealed that 74% of respondents experienced higher business costs in the second half of 2025, with nearly half reporting increases of between 3% and 6%.
About 65% also encountered construction-related issues, including high prices of building materials, supply shortages and inconsistent material availability.
Labour-related challenges were also highlighted, particularly higher wages, labour shortages and a lack of skilled workers.
As a result, many developers have implemented cost-control measures such as freezing recruitment, reducing staff benefits, delaying project launches and scaling down development plans.
Looking ahead, 47% of respondents plan to launch projects in the first half of 2026, comprising 5,015 landed units and 12,669 strata units.
Most respondents expect sales to take longer to achieve meaningful take-up rates, shifting from below 25% within three months to between 25% and 50% within six months.
In terms of pricing, most upcoming launches across states are expected to fall within the RM300,001 to RM500,000 range.
However, projects in Kuala Lumpur and Selangor are expected to be priced between RM500,001 and RM700,000, while those in Johor are likely to range between RM1 million and RM2.5 million.
Despite the ongoing challenges, Ho said, the industry must remain resilient and prepared for potential uncertainties ahead. “The property industry ought to be prepared for any possibilities and outcomes, and I hope all players can continue supporting each other.”
The Sun Malaysia
