Miichael Yeoh

Tag: Property Overhang Malaysia

  • Why Are Homes Sitting Unsold When Malaysians Still Need Houses?

    Why Are Homes Sitting Unsold When Malaysians Still Need Houses?

    Malaysia’s property market faces an interesting contradiction. Many people are struggling to find homes they can afford, yet thousands of completed properties remain unsold. Perhaps the problem is not simply a lack of buyers — but a mismatch between what the market needs and what the industry is building.

    Malaysia’s property market has a question worth examining.

    On one hand, homeownership remains an important aspiration for many Malaysians. Young professionals are looking for their first homes. Growing families need more space. Some households are searching for affordable housing closer to their workplaces.

    On the other hand, completed residential properties remain unsold across the country.

    How can both situations exist at the same time?

    If people need homes, why are developers struggling to sell them?

    The answer may be more complicated than simply saying property prices are too high or buyers cannot afford to purchase.

    It may point to a deeper issue: the property market is not always building what the market actually needs.

    1. A property overhang is more than a supply problem

    When we hear about unsold properties, the immediate assumption is that Malaysia has too much housing supply.

    But this explanation does not tell the whole story.

    According to reported NAPIC figures, Malaysia recorded 33,094 completed unsold residential units in the first half of 2026, with a combined value of approximately RM17.78 billion.

    These are properties that have already been completed but remain unsold.

    The numbers deserve attention, but we should look beyond the national total.

    A property in Kuala Lumpur is not necessarily competing for the same buyer as one in Penang, Johor Bahru or a smaller township.

    A condominium priced at RM800,000 may appeal to a very different market from an affordable apartment priced at RM300,000.

    Even within the same location, a studio apartment, a two-bedroom unit and a family-sized home serve different needs.

    Therefore, the real question should not simply be:

    “How many properties are unsold?”

    It should be:

    “Which properties are unsold, where are they located, who were they designed for, and why are buyers not purchasing them?”

    That is a much more useful starting point.

    2. Are developers building for demand or for market assumptions?

    Property development involves considerable planning, investment and risk.

    Developers need to assess land costs, construction costs, financing, target selling prices, competition and expected market demand.

    However, there is a difference between identifying a market opportunity and understanding actual buyer demand.

    For example, a location may have strong economic activity, new infrastructure and an expanding population.

    On paper, it may look attractive for residential development.

    But does that automatically mean buyers will purchase every type of property launched there?

    Not necessarily.

    A young working professional may need a reasonably priced one-bedroom or two-bedroom apartment near employment opportunities.

    A family may prioritise space, schools, accessibility and daily convenience.

    An investor may be attracted by rental potential, but an owner-occupier may be more concerned about affordability and long-term liveability.

    These are different buyer profiles with different expectations.

    A development can be located in a promising area and still struggle if its product, pricing or unit configuration does not match the people most likely to purchase it.

    A good location does not automatically make every property in that location a good product.

    3. The affordability gap is becoming harder to ignore

    One of the biggest challenges facing property buyers is affordability.

    A property may be attractively designed and offer excellent facilities, but the asking price still needs to make sense for its intended market.

    Consider a simple example.

    A first-time buyer earning RM5,000 a month may be interested in purchasing a home near the workplace.

    However, once the buyer considers the monthly mortgage instalment, maintenance charges, insurance, utilities, transport and daily living expenses, the financial commitment may become too demanding.

    The buyer may like the property but decide not to proceed.

    This is an important distinction.

    Interest in a property does not necessarily translate into purchasing ability.

    There are also buyers who receive loan approval but decide that taking on the commitment would leave them financially stretched.

    Others may fail to secure financing because their income documentation, existing commitments or credit profile do not meet the bank’s requirements.

    For developers, this means the potential buyer pool may be smaller than expected.

    For buyers, it means that a property’s selling price should never be assessed independently of their actual financial capacity.

    A property is only affordable when the buyer can comfortably sustain the ownership commitment — not merely when the bank is willing to provide financing.

    4. The serviced apartment question: Who is the intended occupier?

    Another issue worth examining is the number of completed unsold serviced apartments.

    Recent market reporting has highlighted the concentration of completed unsold serviced apartments in Kuala Lumpur and Johor. It has also raised an important question: do some smaller units, originally designed with investment or short-term accommodation in mind, adequately meet the needs of people looking for permanent homes?

    This deserves closer attention.

    A compact studio may be suitable for a single professional, a certain rental market or a specific investment strategy.

    But it may not be suitable for a young family looking for a long-term home.

    Similarly, a development marketed around lifestyle facilities and investment potential may attract attention during its launch, but its long-term performance will depend on whether there is genuine demand from occupiers and tenants.

    The important lesson is that we should not confuse a property’s marketing appeal with its actual market suitability.

    Before developing or purchasing a property, we need to understand who will occupy it, why they would choose it and whether the surrounding location supports their daily needs.

    5. Developers need to think beyond the launch

    A successful property launch does not necessarily mean a successful development.

    Strong marketing, attractive showrooms, promotional packages and early-bird incentives can generate initial interest.

    However, the real test comes when the development is completed and buyers begin evaluating the actual product.

    Can the property attract genuine owner-occupiers?

    Is there sufficient rental demand?

    Does the selling price remain competitive against completed and secondary-market properties?

    Are the facilities, layout and unit sizes appropriate for the target market?

    Can buyers obtain financing?

    These questions should be considered well before a project reaches its launch stage.

    Developers need to recognise that buyers today have more information and more choices. They can compare prices, examine competing developments and assess whether a property offers genuine value.

    The development process should therefore begin with a clear understanding of the market — not simply with a decision to build because the location appears promising.

    6. What does this mean for property investors?

    For investors, an unsold property market should be a reminder that buying is only one part of an investment decision.

    A property may look attractive at launch, but investors should also consider what happens after completion.

    Will there be sufficient rental demand?

    Who are the likely tenants?

    How many competing units will be available?

    Will the property appeal to future buyers when the investor eventually decides to sell?

    A development with a large number of similar units may face considerable competition, particularly if many owners intend to rent out their properties at the same time.

    This can place pressure on rental rates and make it more difficult to secure tenants.

    The resale market may face a similar challenge if too many comparable properties are competing for a limited number of buyers.

    Investors should therefore look beyond the promised rental yield and projected capital appreciation.

    They need to understand the actual demand supporting those expectations.

    A property investment is not successful simply because the purchase price looks attractive. It must also have a realistic market to support its future rental and resale value.

    7. The property industry needs better market discovery

    Perhaps the biggest lesson from Malaysia’s property overhang is that the industry needs to improve how it understands demand.

    For buyers, this means evaluating properties based on personal needs, financial capacity and long-term suitability rather than being influenced solely by promotional campaigns.

    For investors, it means studying the actual rental and resale market before committing capital.

    For developers, it means investing more effort in understanding the people who will eventually occupy or purchase their products.

    Market research should go beyond population growth, infrastructure announcements and general economic indicators.

    It should examine the intended buyer profile, household income, affordability, competing supply, unit configuration, employment opportunities and actual purchasing behaviour.

    This is where a more structured property discovery process becomes important.

    At PDS — Property Discovery System™, we believe that better property decisions begin with better questions.

    Before asking whether a property is attractive, we should ask whether it is suitable.

    Before asking whether the location has growth potential, we should understand who will drive that growth.

    And before asking whether a development offers good investment returns, we should establish whether there is genuine demand to support those returns.

    The bigger question: Are we building enough homes, or the right homes?

    Malaysia does not simply need more property development.

    It needs developments that respond to real market requirements.

    The property overhang should not be viewed only as a developer’s sales challenge or a buyer’s affordability problem. It is also an opportunity for the entire industry to examine how properties are planned, priced, positioned and delivered.

    A home is not just a collection of concrete, facilities and attractive marketing materials.

    It is a product that must serve the needs of the people who will eventually live in it.

    And an investment property must have a realistic market that can support its rental and resale potential.

    Perhaps the property industry’s next competitive advantage will not come from building bigger projects or offering more facilities.

    It will come from understanding the market better.

    Because the real question is not whether Malaysians need homes. It is whether we are building the homes that Malaysians can afford, want and genuinely need.

    Discover Better. Decide Smarter.

    Miichael yeoh

    Property Strategist

    Disclaimer: This article is intended for general educational and property market discussion purposes only. Market conditions, property prices, financing requirements and investment outcomes may vary by location and individual circumstances. Readers should conduct their own due diligence and seek appropriate professional advice before making property-related decisions.

  • Malaysia Property Market 2026: 33,094 Unsold Homes — Are They Really “For Sale” to Everyone?

    Malaysia Property Market 2026: 33,094 Unsold Homes — Are They Really “For Sale” to Everyone?

    33,094

    That is the number currently attracting attention in Malaysia’s property market.

    As at the first half of 2026, 33,094 completed residential units worth RM17.78 billion remained unsold.

    The figure is up from 30,471 units in the previous period.

    Naturally, the immediate question is:

    Why aren’t Malaysians buying these homes?

    The usual answers come quickly.

    Homes are too expensive.

    Buyers cannot afford them.

    Banks are rejecting loans.

    Developers are building too much.

    All of these factors may play a role.

    But I think we need to ask a more fundamental question:

    What does “unsold” actually mean?

    Because an unsold property is not necessarily a property that is simply sitting on the open market waiting for any Malaysian to buy it.

    And that distinction matters.

    The Unsold Property Paradox

    Let’s start with something that may surprise many people.

    Malaysia’s property market is still active.

    In the first half of 2026, the country recorded 187,320 property transactions worth RM105.12 billion.

    Residential property accounted for 110,998 transactions, representing 59.3% of total transactions and RM47.11 billion in transaction value.

    So this isn’t a story about Malaysians suddenly refusing to buy property.

    There are buyers.

    There are transactions.

    There is demand.

    Yet at the same time, tens of thousands of completed homes remain unsold.

    That is the paradox.

    People are buying property — but some completed properties are still not finding buyers.

    This tells us that the problem is more complicated than simply:

    “Malaysians cannot afford houses.”

    Not Every Unsold Unit Has the Same Problem

    This is where I believe we need to look at the property market differently.

    An “unsold” unit could be unsold for very different reasons.

    1. The buyer doesn’t want it.

    The location may not be attractive.

    The layout may not fit the target market.

    The facilities may not justify the price.

    The surrounding environment may not match what buyers want.

    2. The buyer wants it — but cannot get financing.

    This is a very real issue.

    The latest REHDA Property Industry Survey found that 59% of surveyed developers reported unsold completed residential units.

    Among the factors highlighted were end-financing rejection, property prices and unreleased Bumiputera units.

    The survey covered 181 REHDA members in Peninsular Malaysia.

    A buyer can therefore say:

    “I want this property.”

    But the bank may effectively say:

    “You cannot finance it.”

    Those are two completely different problems.

    3. Some units are not immediately available to the entire market

    This is another part of the conversation that deserves more attention.

    Some residential developments contain Bumiputera quota units.

    Where those units remain unsold, developers may need to go through the relevant state process before they can be released to the wider market.

    The rules are not identical across Malaysia.

    In Penang, for example, the state has a formal Bumiputera quota release process, including requirements relating to the physical progress of the development and evidence of marketing efforts to Bumiputera purchasers.

    So an important distinction needs to be made:

    A unit can be recorded as “unsold” without necessarily being immediately available to every buyer in the market.

    And depending on the state and applicable scheme, releasing such units can also involve specific conditions or financial contributions.

    This matters because we should be careful not to treat every unit in the RM17.78 billion figure as if it represents exactly the same market problem.

    4. The product may simply be wrong for today’s buyer

    This is probably one of the most overlooked questions in property development.

    A project may have been conceived several years ago.

    The developer may have studied:

    • population growth,
    • household formation,
    • income levels,
    • infrastructure,
    • competition,
    • buyer profiles,
    • pricing,
    • and future demand.

    Then the project goes through planning, approvals, construction and completion.

    By the time the keys are ready…

    The market may have changed.

    Buyers’ expectations change.

    Household sizes change.

    Working patterns change.

    Transport patterns change.

    Financing conditions change.

    Lifestyle preferences change.

    And competing developments enter the market.

    A product that looked attractive when the development was planned may not necessarily be equally attractive when it is completed.

    And this is where “affordable” becomes an interesting word

    The government has reported that properties priced RM300,000 and below accounted for 51.6% of residential transactions in H1 2026.

    At the same time, the government has acknowledged that completed unsold residential stock is not confined to high-end properties. It is also significant in affordable and mid-priced segments.

    So perhaps we need to distinguish between:

    Affordable by price

    and

    Affordable and desirable to the target buyer.

    They are not necessarily the same thing.

    A RM300,000 property may be affordable on paper.

    But if it is two hours from the buyer’s workplace…

    If public transport is poor…

    If the layout doesn’t suit the family…

    If the maintenance costs are too high…

    If financing is difficult…

    If the buyer doesn’t see future resale demand…

    Then the buyer may still decide:

    “This isn’t for me.”

    And that isn’t necessarily an affordability problem.

    It may be a product-market fit problem.

    This is where the PDS perspective comes in

    For years, much of the property industry has operated around a relatively simple sequence:

    Build → Market → Sell

    But perhaps we need to rethink the sequence.

    The PDS philosophy starts with a different question:

    Discover the buyer before you build for the buyer.

    Who exactly is the intended buyer?

    What problem are they trying to solve?

    Where do they want to live?

    What can they realistically afford?

    Can they obtain financing?

    What type of property fits their lifestyle?

    What compromises are they willing to make?

    What alternatives are available?

    What would make them choose this property over another?

    And perhaps most importantly:

    What evidence would give them confidence to make the decision?

    From “Selling Property” to “Helping Buyers Decide”

    This is a subtle but important shift.

    A traditional sales approach may ask:

    How do we sell this unit?

    A PDS approach asks:

    Why should this buyer choose this unit — and is it actually the right choice for them?

    That changes the conversation.

    Instead of starting with the brochure, we start with the buyer.

    Instead of starting with the promotion, we start with the problem.

    Instead of asking:

    “How much discount do we need to give?”

    we should also be asking:

    “Why isn’t the buyer convinced at the current value proposition?”

    Sometimes the answer may be price.

    Sometimes financing.

    Sometimes location.

    Sometimes product design.

    Sometimes timing.

    Sometimes competition.

    Sometimes eligibility.

    And sometimes the property simply isn’t solving a sufficiently important problem for the intended buyer.

    The Developer’s Question Should Change Too

    Perhaps developers should not only ask:

    “How many units can we sell?”

    They should ask:

    “How many units does this market actually need — and what type?”

    That means looking beyond headline demand.

    It means understanding:

    Demand

    → Who needs the property?

    Ability

    → Who can actually afford it?

    Eligibility

    → Who can legally or practically purchase it?

    Financing

    → Who can obtain the required loan?

    Location

    → Who wants to live there?

    Product

    → What configuration do they want?

    Value

    → Does the property justify the price?

    Confidence

    → What information does the buyer need before deciding?

    This is a much more complete view of property demand.

    The Real Property Overhang May Be an Alignment Problem

    Perhaps Malaysia doesn’t simply have a shortage of buyers.

    Perhaps we have a shortage of alignment.

    Alignment between:

    What developers build

    and

    what buyers actually want.

    Between:

    Price

    and

    purchasing power.

    Between:

    Location

    and

    daily life.

    Between:

    Product

    and

    lifestyle.

    Between:

    Eligibility

    and

    the available buyer pool.

    Between:

    financing

    and

    the buyer’s financial profile.

    And ultimately:

    what is being offered

    and

    what the buyer is prepared to decide on.

    So, What Should We Do About the 33,094?

    I don’t think the answer is simply:

    “Make property cheaper.”

    Nor is it simply:

    “Give buyers more incentives.”

    And it certainly isn’t enough to say:

    “Malaysians aren’t buying.”

    We need to understand why each segment of unsold stock remains unsold.

    Because the solution to a financing problem is different from the solution to a location problem.

    The solution to a Bumiputera quota-release issue is different from the solution to a product-market mismatch.

    And the solution to an overpriced property is different from the solution to a property that is fairly priced but poorly positioned.

    One number can hide many different problems.

    That is why we need to go beyond the headline.

    The PDS Way

    At the Property Discovery System, we believe property decisions should begin with discovery, not selling.

    For buyers:

    Discover the market.
    Understand the property.
    Test the numbers.
    Assess the risks.
    Compare the alternatives.
    Then decide.

    For developers:

    Discover the demand.
    Understand the buyer.
    Design the right product.
    Position it correctly.
    Build trust.
    Then sell.

    Because the objective shouldn’t simply be to sell more properties.

    It should be to create better alignment between property supply and real buyer demand.

    The question we should really be asking

    The headline today is:

    33,094 completed homes remain unsold.

    But perhaps the more important question is:

    Why are these particular homes still unsold?

    Until we answer that question at the unit, project, location, price, financing and buyer level, we risk treating very different problems as if they were the same problem.

    And if we keep treating the symptoms instead of understanding the buyer…

    We may simply build another 33,094 homes to replace them.

    Property is not just about selling a product.

    It is about helping people make better decisions.

    Discover Better. Decide Smarter.

    That is the PDS way.

    Sources &

    • National Property Information Centre (NAPIC), Property Market Report H1 2026. NAPIC — H1 2026 Property Market Report
    • Ministry of Finance Malaysia, launch remarks on the H1 2026 Property Market Report.
    • REHDA Property Industry Survey 1H2026, reported by EdgeProp.
    • Penang State Housing Board, Guidelines for Application for Release of Bumiputera Quota.