Malaysia’s real estate sector is showing cautious optimism despite facing persistent economic headwinds, according to a recent industry survey. Developers anticipate improved market conditions in the latter half of the year, though concerns about operational costs and unsold inventory continue to weigh on the sector. The Real Estate and Housing Developers’ Association reported its highest confidence levels in five years, with over 50% of surveyed members expressing positive expectations for future sales.
Market activity showed mixed results in recent months, with property launches declining 7% to 13,611 units between July and December 2024 compared to the first half of the year. Sales figures followed a similar downward trend, dropping 45% to 3,802 units in the same period. Industry leaders attribute this slowdown to developers front-loading their project launches earlier in the year rather than a fundamental weakening of demand.
Challenges persist across multiple fronts, including rising utility costs, fuel subsidy adjustments, and unpredictable regulatory expenses. Construction firms reported cost increases of 3-6%, compounded by material shortages and labor constraints. More than a third of developers have implemented austerity measures such as hiring freezes and project delays to mitigate financial pressures. These operational difficulties highlight broader economic strains affecting both the property sector and the national economy.
The survey also revealed that 41% of developers struggled with unsold completed homes at year-end 2024, primarily in the mid-range price bracket. Serviced apartments accounted for most of this excess inventory, with financing rejections and weak buyer interest cited as key contributing factors. Industry representatives emphasized the need for policy interventions to address credit accessibility and stimulate housing demand moving forward.