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About This Summary
Let’s explore the official Malaysia property market 2025 report straight from the Valuation and Property Services Department. Released as the Laporan Pasaran Harta 2025, this comprehensive document (335 pages long!). No worry, I have done the dirty works and hope this 2000+ words summary will break down what happened in residential, commercial, industrial and other sectors so you can make smarter decisions.
Overview of the Malaysian Property Market in 2025
Malaysia’s economy expanded by 5.2% in 2025, driven by strong domestic demand and favorable exports. This growth, supported by positive labor market conditions, income-related policies and continued multi-year projects, created a solid foundation for property activity. Housing incentives under Budget 2025 and the Overnight Policy Rate reduction to 2.75% further stimulated demand.
A total of 416,413 property transactions were recorded, showing a slight 1% decline in volume but a healthy 4.1% increase in value to RM241.87 billion (Page 12). Residential continued to dominate with 61.6% of transaction volume and 44.8% of value, while industrial delivered the strongest value growth at 21.3% and commercial held steady at 1.1% value growth (pg. 15).
What this means for investors: the market stayed resilient. Domestic buyers focused on affordable segments, and government initiatives such as the RM405 million allocation for 48 Program Residensi Rakyat, RM452 million for 14 Rumah Mesra Rakyat projects, and up to RM10 billion in Housing Credit Guarantee Scheme guarantees kept momentum alive (Page 13).
Residential Market Sector
Residential remained the heartbeat of the Malaysia property market 2025, accounting for 256,512 transactions worth RM108.27 billion. Volume eased 1.5% while value rose a modest 1.3% compared with 2024 (Page 18).
Selangor led the nation with 20.7% of volume (52,998 transactions) and 28.2% of value (RM30.53 billion). Johor followed with 16.6% of volume (42,566 transactions) and the four key states – WP Kuala Lumpur, Johor, Selangor and Pulau Pinang – together supplied more than 50% of national residential transactions (Page 18).
By price range, homes RM300,000 and below dominated at 52.3% of transactions, the RM300,001–RM500,000 band took 24.9%, RM500,001–RM1 million made up 16.9% and properties above RM1 million represented 5.9% (Page 18). Terraced houses stayed the most popular type at 41.3% of transactions, followed by vacant plots (18.1%), high-rise units (14.3%), low-cost houses/flats (10.6%) and semi-detached (7.3%) (Page 18).
Residential Incoming and Planned Supply
New launches totalled 64,487 units, down 14.9% from 2024, with sales performance at 35.5% (Page 20). Selangor contributed 22.3% of launches (14,358 units) at 32.3% sell-through, Johor 17.3% (11,151 units) at a stronger 55.3% sell-through, and Perak 11% (7,086 units) at 28.7% (Page 20). Two- to three-storey terraced houses led new supply at 30.2%, single-storey terraced at 21.7% and condominiums/apartments at 33.5% (Page 20).
Unsold completed residential units rose to 30,471 units valued at RM17.73 billion – up 31.6% in volume and 27.2% in value from 2024 (Page 21). Perak recorded the highest overhang at 12.9% (3,943 units), followed by Johor (12.1%) and Selangor (11.6%). Condominiums and apartments formed 47.1% of overhang, terraced houses 30.5% (Page 21).
On the construction front, completions grew 21.6% to 99,877 units. Selangor supplied 22.7% (22,691 units), Johor 10.3% and WP Kuala Lumpur 10% (Page 22).
Residential Sector Rental Market
Rental markets stayed robust. In WP Kuala Lumpur, double-storey terraces in Damansara Heights and Desa Park City exceeded RM8,000 per month, while luxury condominiums in U Thant Residence, Seni Mont Kiara and Sunway Vivaldi topped RM11,000 monthly (Page 25). Selangor, Johor and Penang showed stable to modestly rising rents, confirming strong tenant demand in prime locations.
What this means for investors: affordable and mid-range residential in Selangor and Johor continue to offer the best liquidity and long-term capital appreciation in the Malaysia property market 2025.
Malaysia Housing Home Price (MPI)
The Malaysian House Price Index (MHPI) reached 233.1 points in 2025, reflecting moderate annual growth of 2.6%. This translated to a national average house price of RM502,922 per unit. All states recorded positive growth ranging from 0.8% to 6.9%, underscoring broad-based stability rather than rapid escalation.
What this means for investors: .
The moderate 2.6% rise in the HPI, amid stable sales volume and higher transaction value, indicates an overall increase in house prices.
Commercial Property Trends in 2025 – Steady and Selective
Commercial transactions totaled 46,649 units worth RM58.70 billion, expanding 1.4% in volume and 1.1% in value (Page 25). Shops dominated at 41.9% of commercial volume and 33.8% of value.
Shop transactions reached 19,551 units valued at RM19.85 billion. Johor led volume at 21.6% (4,219 transactions) while Selangor led value at 29.7% (RM5.89 billion) (Page 26). Two- to two-and-a-half-storey terraced shops accounted for over 50% of shop deals, followed by three- to three-and-a-half-storey shops at 27.5% (Page 27).
Unsold completed shop units increased 12.4% in volume to 6,492 units worth RM5.46 billion. Johor held the largest share at 17.7% of volume and 19.6% of value, yet its overhang has been declining gradually since 2023 (Page 27).
What this means for investors: prime commercial shop units in Johor and Selangor remain attractive for rental yields and steady capital growth in the Malaysia property market 2025.
Industrial Property Growth – The Star Performer
Industrial sub-sector delivered the strongest value growth at 21.3% with volume up 1.4% (Page 15). High-value industrial demand in strategic zones, supported by the New Industrial Master Plan 2030 and Thirteenth Malaysia Plan, boosted investor confidence.
This segment, though smaller in transaction count, contributed a significant 14% of total transaction value, underlining its premium positioning within the Malaysia property market 2025.
We expect a higher incoming supply of industrial properties over the next 12–24 months (see chart above).
Other Sectors and Development Land
Development land and others recorded 17.2% value growth, while agriculture saw a 2.7% volume decline (Page 15). These segments together made up the remaining activity, providing diversification opportunities for larger-scale investors.
Main takeaways from the Report
- Malaysia’s property market delivered resilient performance in 2025, recording 416,413 transactions valued at RM241.87 billion — a solid 4.1% increase in value despite a marginal 1% dip in volume.
- Residential remained the clear leader, contributing 61.6% of total transactions (256,512 units) worth RM108.27 billion.
- The industrial sector shone brightest with impressive 21.3% value growth, while commercial stayed steady.
- House prices grew moderately, with the Malaysian House Price Index rising 2.6% to 233.1 points and the national average reaching RM502,922 per unit.
- The commercial shop market likely bottomed out in 2022 and may be seeing a gradual recovery.
Market Headwinds and Watchfulness:
- Housing sales volume has remained largely stable (arguably stagnant) since 2022, despite higher transaction values — suggesting that housing affordability may be deteriorating.
- Coupled with incoming supply, the market could face absorption challenges in the near term.
- Meanwhile, the post-COVID industrial property boom has attracted substantial new supply. Incoming supply (new construction) in 2025 is more than 200% higher vs. 2022, which may result in a significant influx of completions in 2026–2027, potentially creating short-term supply pressure.
- Commercial office segment in particular non Grade-A sector will continue to face challenge.
End.
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