Malaysia’s real estate sector showed mixed signals in early 2025, with declining sales contrasting against a construction boom. Official data revealed property transactions fell 6.2% in volume and 8.9% in value year-on-year during the first quarter, totaling 97,772 deals worth RM51.42 billion. While residential properties maintained their dominant position with 59,000 transactions, industrial properties emerged as the only segment showing marginal growth at 0.3%.
The construction landscape told a different story, with developers breaking ground on significantly more projects compared to 2024. Residential construction starts more than doubled to 12,498 units, while serviced apartment projects skyrocketed by 100% to 14,761 units. This surge in development activity occurred alongside modest price growth, with the national House Price Index climbing 0.9% to 225.3 points, translating to an average home price of RM486,070.
Inventory challenges persisted across the market, though with notable variations between property types. Completed but unsold homes increased slightly to 23,515 units worth RM15 billion, while the serviced apartment overhang improved, dropping 6.7% to 18,246 units. Regional economic initiatives in Johor, including special economic zones and duty-free status for Pulau Satu, contributed to reducing the state’s serviced apartment surplus by 5.6%.
Market performance varied significantly by location, with most states recording price increases between 0.3% and 6.9%. The exceptions were Sabah, Sarawak, and Kuala Lumpur, where prices declined 2.4% collectively. These regional disparities highlight the complex dynamics shaping Malaysia’s property market as it navigates shifting demand patterns and economic conditions.