Malaysia’s property sector is showing signs of cautious optimism as developers anticipate better conditions in early 2025, according to a recent industry survey. The Real Estate and Housing Developers’ Association (Rehda) Malaysia found that 26% of surveyed developers expect improved residential market performance in the first half of next year, a slight uptick from current projections. While over half remain neutral, the shift reflects growing confidence in economic stability, controlled inflation, and foreign investment inflows, particularly in data center development.
Market conditions for the remainder of 2024, however, remain subdued, with many developers adopting a conservative approach. About 56% have no plans for new project launches in the second half of the year, citing challenges such as rising material costs, weak demand, and limited suitable land. Nearly three-quarters anticipate modest sales, with performance expected to stay below 50% in the first six months post-launch. These hesitations stem from broader economic uncertainties and lingering post-pandemic adjustments.
One of the most pressing concerns for developers is the sharp rise in construction costs, with 93% reporting significant price hikes for key materials like cement, glass, and sand. To mitigate these challenges, many are exploring strategies such as reducing profit margins, adjusting unit sizes, or switching to more cost-efficient alternatives. Rehda President Datuk Ho Hon Sang emphasized that while the market is gradually stabilizing, developers remain cautious in their expansion plans.
Looking ahead, Rehda has outlined key recommendations for Budget 2025, urging the government to support affordable housing initiatives through targeted incentives. The association advocates for data-driven planning, leveraging AI and big data to better align supply with demand. Additionally, it calls for exemptions on HRD Corp levies for construction firms and tax benefits for sustainable development projects. These measures, Ho argued, would help balance affordability without overburdening middle-income buyers.