September 1, 2025
KUALA LUMPUR: Malaysia may be heading for another property glut, this time with almost 100,000 residential units — comprising completed, under construction and yet to be built homes — having no buyers in the first three months of the year.
Based on data from the National Property Information Centre (Napic), which records development approvals granted by local authorities, homes in the “affordable” bracket, priced between RM200,001 and RM300,000, account for the largest overhang, trailed closely by those in the RM300,001–RM400,000 range.
On an optimistic note, the bulk of these homes are still under construction or have yet to be built, which gives developers time to secure buyers.
However, if left to grow unchecked, this may result in abandoned units.
Number of residential units launched by state Q1 2025
NEW LAUNCHES IN Q1
According to Napic, in the first quarter of this year, 12,498 new residential units were launched nationwide, with 1,351 units or 11 per cent sold within the first three months — figures that appear pleasing at first glance.
Properties priced between RM400,0001 and RM500,000 accounted for the largest share at 3,348 units (26.8 per cent), followed by those between RM200,001 and RM300,000 at 2,233 units (17.9 per cent), and RM300,001 and RM400,000 at 2,002 units (16.0 per cent).
Number of residential units launched by price range Q1 2025
Number of newly launched residential units by types Q1 2025
SALES SLOWDOWN
Overhang units are defined as “completed properties” that have been awarded a certificate of completion and compliance by the local authorities, but remained unsold for more than nine months.
According to Napic data, there were 23,515 such units nationwide in the first quarter of the year.
What should trigger concern is the “affordable” homes priced between RM200,001 and RM300,000 accounting for the largest share at 4,861 units, or 20.7 per cent.
This is compounded by the 4,201 units (17.9 per cent) in the RM300,001 to RM400,000 segment and 3,024 units (12.9 per cent) in the RM500,001 to RM600,000 range.
Number of overhang residential units by price range Q1 2025
Condominiums and apartments dominated the overhang status with 13,386 units, accounting for 56.9 per cent, while two- and three-storey terraced houses recorded 3,560 units, or 15.1 per cent.
Number of overhang residential units by in Q1 2025 by house types
Perak stood out for having the highest number of unsold completed homes in the RM200,001 to RM300,000 range with 1,254 units.
This was followed by Kuala Lumpur with 880 units, Pahang (647) and Penang (624).
In Melaka, the market is dire — the bulk of overhung homes was in an even lower price range, where 181 units between RM100,001 and RM200,000 were left unsold.
CANNOT AFFORD ANYMORE
The Napic data showed that the median house price in the first quarter was RM359,000, but the Statistics Department found that the national median household income was just RM6,338 a month.
Going by Bank Negara Malaysia’s median multiple measure — which considers a home to be affordable if it costs no more than three times the median annual income — the affordability ratio for the majority of Malaysian households would stand at 4.72, which is well above the threshold.
A household needs to earn about RM9,972 a month to afford a home with a median price of RM359,000.
However, based on the statistics, the median price of houses that most Malaysian households could technically afford is RM228,168 only.
The gap is especially significant in Sarawak, where households earned a median of just RM4,978 a month, but the median price of houses there was RM395,000, which is higher than the national price.
Most baffling of all are the prices for 193 new homes in the state launched in the first quarter, which were all above RM400,000.
In Johor, which had the largest number of new launches, households earning a median of RM6,879 a month had to contend with a median house price of RM450,000.
Even more perplexing is the RM500,000 and above price tag for 2,015 newly launched units, putting them far out of reach for typical income earners.
UNREALISTIC HIGH-END
Penang had the most overhang of high-end units, with 646 priced above RM1 million remaining unsold.
The state’s second-highest unsold category was surprisingly in the RM200,001 to RM300,000 range.
Sabah showed a similar pattern, recording 559 unsold units in the RM500,001 to RM600,000 bracket and 446 units priced above RM1 million.
In Selangor, the overhang was also concentrated in high-end homes, with no takers for 375 units costing between RM500,001 and RM600,000 and 327 units above RM1 million.
STOCKPILING THE UNWANTED
As the market expands, developers continue to add homes to an already saturated market.
In Johor, 417 homes priced between RM500,001 and RM600,000 and 253 units above RM1 million were launched in the first quarter, even though the state had 567 and 496 outstanding units in the respective ranges.
A similar trend could be seen in Perak, where 829 new units were launched in the RM300,001–RM400,000 range and 393 in the RM600,001–RM700,000 range. These were despite the 815 and 93 overhung units in the respective categories.
Number of overhang, unsold under construction and not constructed units Q1 2025
GROWING RISK
If the current backlog is not worrying enough, a further 62,753 units are at risk of slipping into the overhang category.
These units are classified as “unsold under construction” — homes that are being built but have yet to find a buyer.
Almost 30 per cent (17,211 units) were homes priced between RM200,001 and RM300,000.
The second-highest group comprised 8,794 properties (14.0 per cent) priced between RM400,001 and RM500,000, followed by 8,579 (13.7 per cent) priced between RM300,001 and RM400,000.
By state, Selangor recorded the highest number of “unsold under construction” units at 10,359 (16.5 per cent), followed by Perak with 7,640 (12.2 per cent) and Johor with 7,559 (12 per cent).
THE NEXT WAVE
In addition to current overhang and unsold units under construction, another 13,315 homes — already approved by local authorities but not yet built — were unsold in the first quarter.
It is only a matter of time before this stockpile moves into the “unsold under construction” status.The largest share — 3,152 units or 23.7 per cent — were in the RM200,001 to RM300,000 range.
The second-highest were in the RM300,001 to RM400,000 segment at 2,673 units (20.1 per cent), followed by the RM400,001 to RM500,000 range at 2,305 units (17.3 per cent).
Most units comprised condominiums/apartments at 7,593 units (57.0 per cent). By state, the Federal Territory of Kuala Lumpur led the status with 3,392 units (25.5 per cent), followed by Penang at 2,097 units (15.7 per cent) and Selangor at 1,649 units (12.4 per cent).
MINISTER’S RESPONSE
The NST approached Housing and Local Government Minister Nga Kor Ming for a response, but he chose to reserve comment, saying it was only right to do so after obtaining statistics from his own ministry.
Napic is an agency under the Valuation and Property Services Department, which comes under the Finance Ministry.
“I don’t have the statistics yet, so I have to check (with his ministry’s) then only I can answer you,” said Nga.
“I have to verify if (the data) is correct or not, our interpretation may be different,” he said, adding that some of the properties recorded by Napic may not come under the Housing and Local Government Ministry’s jurisdiction.
However, the NST was made to understand that Statistic Department’s statistics captured the property market in its entirety, whereas Napic’s data is limited to projects registered under the ministry and other schemes approved by local authorities.
Napic’s scope also excludes longhouses, government quarters and village houses, and its data covers only housing projects with more than five units.
To see all the charts and data, visit www.nst.com.my
source: https://www.nst.com.my/
