Malaysia’s property sector faces growing unsold units as financing challenges and high prices weigh on sales

KUALA LUMPUR, March 13 — Unsold residential properties continue to build up across Malaysia as financing difficulties and cautious buyers weigh on the property market, according to a survey by the Real Estate and Housing Developers’ Association (Rehda).

The survey found 60 per cent of developers reported unsold completed residential units as at December 31, 2025, reflecting persistent challenges in selling newly completed homes.

Developers cited end-financing loan rejection, high prices and low demand as the top three reasons behind the unsold stock.

Rehda president Datuk Ir Ho Hon Sang said financing issues remained a major factor affecting property sales.

“In the RM500,000 to RM700,000 price range, most respondents reported loan rejection rates of between 31 per cent and 45 per cent,” he said while presenting the survey findings today.

Among the unsold homes, two- to three-storey terrace houses accounted for the largest share at 26 per cent, followed by serviced residences (19 per cent) and single-storey terrace houses (18 per cent).

Ho said developers are adjusting their strategies amid slower sales and market uncertainties.

“Instead of launching 200 to 300 units, some developers are launching smaller phases first to test the market,” he said, adding that some projects were also being delayed due to weaker demand.

Despite the unsold inventory, developers continued to introduce new projects in the second half of 2025.

A total of 17,971 residential units were launched during the period, although sales slowed with the overall take-up rate dropping to 21 per cent. Sales performance in H2 2025 saw a total of 3,784 units sold, lower than the 38 per cent take-up rate in H1 2025.

Ho said the industry remained cautiously optimistic about the outlook for 2026 despite ongoing economic uncertainties.

Serviced residences were the most sold property type, followed by apartment/condominium, while townhouses recorded the highest take-up rate at 60 per cent. 

The survey found that 36 per cent of launches were priced at RM500,000 and below. Within this segment, 28 per cent fell between RM300,001 and RM500,000, while eight per cent were priced at RM300,000 or less.

Meanwhile, 26 per cent of launches were in the RM1 million to RM2.5 million range, representing the second-highest average price bracket. These projects were mainly located in Shah Alam, Iskandar Puteri, and Tebrau.

“Sixty per cent of respondents have unsold completed residential units as at 31 December 2025; 26 per cent of these units were two- to three-storey terrace houses followed by serviced residences and single-storey terrace houses (19 and 18 per cent respectively).

“Respondents view the market neutrally in the first half of 2026, with optimism picking up slightly in the second half,” said Ho.

The Rehda Property Industry Survey (PIS) involved 166 developers across Peninsular Malaysia and was conducted by the Rehda Institute between December 2025 and February 2026 to assess market performance in the second half of 2025 and the outlook for 2026.