Malaysia Property Market Q1 2025 Report: Trends and Performance

The Malaysian property market saw a mixed start to 2025. Overall transaction activity dipped slightly from a year ago, while construction and new project launches especially in the residential sector picked up pace. The National Property Information Centre (NAPIC) reports that in Q1 2025, 97,772 transactions worth RM51.42 billion, down 6.2% and 8.9% year-on-year (YoY) respectively.

This decline was driven by both residential and commercial property sales. However, robust construction activity and a surge in new housing launches helped sustain market momentum, and industry analysts remain cautiously optimistic.

Sector	Q1 2024 Transactions	Q1 2025 Transactions	Q1 2024 Value (RM billion)	Q1 2025 Value (RM billion)
Residential	~62,000 (≈RM25.0)	~59,000 (≈RM24.0)	25.0	24.0
Commercial	~20,000	~19,000	15.0	14.2
Industrial	~12,000	~12,036	4.0	4.01

Table: Property transaction volume and value by sector, Q1 2024 vs Q1 2025 (approximate). NAPIC figures: total deals 104,297 vs 97,772; total value RM56.53b vs RM51.42b

Figure: Snapshots of the Q1 2025 residential market (new launches, price ranges, overhang). Data: NAPIC.

Market activity

• Transactions (units and value) eased in Q1 2025 compared to Q1 2024. Housing prices were relatively stable: the Malaysia House Price Index (MHPI) stood at 225.3 points (average price ~RM486,070) in Q1 2025, up about 0.9% from a year earlier.

Construction and launches

• Residential construction strengthened markedly. New housing completions rose 30% (to 9,329 units) and new starts rose 32% (to 28,344 units) from Q1 2024 levels. Over the quarter, developers launched over 12,400 new residential units – more than double the 5,585 units a year earlier – although only about 10.8% of these were sold immediately.

Overhang (unsold stock)

• The total stock of completed but unsold residential units held steady. By Q1 2025 there were 23,515 unsold completed units (worth ~RM15.0 billion), a slight 1.6% rise from the previous quarter and a 2.9% drop from Q1 2024. Notably, serviced apartment overhang improved: unsold service apartments fell 6.7% to 18,246 units (RM14.6 billion) year-on-year. In Johor Bahru, for example, the overhang of service-apartment units eased by about 5.6% from Q4 2024, reflecting stronger demand in that region.

Residential Sector

The residential property subsector showed clear strength in Q1. Government housing programs (like PRR and RMR) and major infrastructure projects (Forest City’s financial zone, the JS–SEZ in Johor–Singapore, etc.) have spurred building activity. Developers launched 12,498 new homes in Q1 2025 roughly two-and-a-half times the 5,585 launched in Q1 2024 although take-up was modest (10.8% sold on launch). House completions jumped 30.2% year-on-year to 9,329 units, reflecting projects delayed by the pandemic finally wrapping up.

Supply-side data (NAPIC) illustrate this surge. Residential completions and starts in Q1 2025 were significantly higher than Q1 2024, indicating an accelerating development pipeline (see table below). The boost in new projects has come largely in affordable-to-mid priced segments: around 65% of new launches were priced below RM500,000.

In particular, Johor and the Klang Valley saw the most new homes, with thousands of units added in each state. At the same time, the stock of unsold completed homes remained roughly flat: about 23.5 thousand units (worth ~RM15.0 billion) were on hand, only slightly above the previous quarter. Importantly, this overhang was 2.9% below the level a year ago, suggesting balanced supply growth.

Residential	Q1 2024	Q1 2025	% Change
Completed units	7,168	9,329	+30.2%
New housing starts	21,391	28,344	+32.5%
New units launched	5,585	12,498	+123.6%
Completed unsold units	22,864	23,515	+2.9% (Y-o-Y)

Commercial Sector

In the commercial property segment (offices, retail, etc.), the outlook remained mixed. Transaction activity in Q1 2025 was softer than a year earlier (reflecting the overall market), but occupancy of completed commercial space edged up. For example, the occupancy rate for shopping complexes rose to 79.0% in Q1 2025 from 78.8% in Q4 2024, suggesting a tightening in supply or stronger consumer demand.

New retail and office stock was modest, so overall vacancy levels are stabilising. Some large retail projects are scheduled for completion later in 2025, which may keep vacancy rates under watch. Overall, investors note that prime commercial locations (especially malls and offices) have seen some leasing pickup, though rents are largely flat on year.

Commercial highlight: Despite the slight downturn in sales activity, key indicators improved. Shopping complex occupancy hit 79.0% in Q1 2025 (from 78.8% in late 2024), reflecting steady demand for retail space.

Industrial Sector

The industrial property market (factories, warehouses) continued to perform well. Industrial completions and project starts both grew sharply year-on-year, albeit from smaller bases. NAPIC data show Q1 2025 industrial completions rose to 356 units (from 201 units in Q1 2024), and starts rose to 1,188 units (from 945).

Demand for warehouses and factories boosted by the logistics and e-commerce sectors remains healthy. Landed industrial space in key manufacturing hubs like Johor and Penang remains in short supply, and companies continue to invest in logistics parks. Unissued supply (“land banks” and planned industrial plots) is under monitoring by developers.

Development Land and Other Sectors

Data for development land (undeveloped parcels, mixed-use land) are less publicly tracked, but market intelligence suggests continued appetite. The doubling of new residential projects implies large land take-up by developers. Infrastructure initiatives like the Johor–Singapore Special Economic Zone (JS–SEZ) and the new Forest City financial zone are unlocking significant development land in the south.

In addition, government measures (such as tax incentives on first-time buyers and expanded step-up financing schemes) aim to stimulate the housing pipeline. In short, land for future development is being actively mobilised to meet rising demand, though exact inventory levels await official publication.

Regional Performance

Regionally, activity varied across Malaysia. In Johor and the southern region, new project launches were highest in the country driven by Iskandar Malaysia projects and special economic zones. Johor recorded over 3,000 new launches in Q1 (the largest share), and its serviced-apartment overhang was among the highest (though improving). Forest City and the JS-SEZ projects in Johor are cited by NAPIC as catalysts for growth.

The Klang Valley (Kuala Lumpur and Selangor) remained a dominant market in terms of volume. Selangor alone saw over 2,100 new launches, and Greater KL held the country’s largest stock of unsold housing (overhang) reflecting its large inventory and buyer pool. However, price growth in the Klang Valley has been moderate (supporting affordability for many buyers).

Negeri Sembilan and Penang showed moderate expansion. Negeri Sembilan (near the Klang Valley) had the third-highest new residential launches, benefitting from spillover demand and new townships. The northern and eastern states (Penang, Perak, Terengganu, etc.) reported steady but less dramatic changes; they have smaller transactions overall, with steady factory demand in Penang and Iskandar Malaysia projects continuing to draw interest. Finally, Sabah and Sarawak on Borneo island had stable demand. Large infrastructure and industrial projects in Sabah, plus a focus on affordable housing in Sarawak, are expected to support their markets through 2025.

Outlook and Commentary of Malaysia Property Market Q1 2025

NAPIC and industry leaders expect the market to remain resilient in 2025, albeit with caution. The strong start in construction and new launches should sustain activity even as sales growth is modest. The government’s recent “MADANI” economic measures (such as higher income-tax deductions on housing loans and special financing schemes for first-time young buyers) are designed to stimulate demand.

However, stakeholders are advised to watch for external headwinds. Inflationary pressures, global economic uncertainty, and rising interest rates could dampen buyer sentiment. NAPIC notes that although current data show positive momentum, developers and investors must stay vigilant for any shifts in the market environment. In summary, key insights from Q1 2025 are:

• Construction (especially residential) is growing strongly, and new housing supply has surged.
• Transaction activity is slightly down, with total volume and value falling ~6–9% from a year ago.
• Unsold home inventory is roughly stable, with about 23.5k units (RM15.0b) on hand.
• House prices are broadly flat to slightly up (MHPI +0.9% YoY).
• Government support and strategic zones are boosting specific regions (Johor, Klang Valley), and commercial occupancy is strengthening.
• Overall, the market is healthy but credit measures and demand factors will be key to watch in coming quarters.

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