Another Property Glut in Malaysia? (Part 2)

 

In the residential segment – which in our analysis includes service apartments from the commercial segment as well – total overhang properties rose to 44,794 units worth some RM30.87bil as at the end of 1H25, up from 42,713 units valued at RM29.64bil as at the end of last year, representing an increase of 4.1% in volume and 4.9% in value. Measured against 1H24, the number of overhang properties increased by 2.3% year-on-year (y-o-y), but total overhang value fell by 2.1% y-o-y.

 

The increase in overhang properties in 1H25 was mainly from the residential segment, which grew to 26,911 units valued at RM16.44bil, against 23,149 units worth RM13.94bil at the end of 2024 – an increase of 16.3% in volume and 17.9% in value. When compared with 1H24, the total overhang in the residential segment jumped by 18.9% and 15.4% in total volume and value, respectively.

 

Interestingly, Napic has also provided an update on the status of unsold completed or overhang properties based on ageing analysis. To recap, a property is deemed to be part of the overhang statistics if a property development project is completed but units remain unsold more than nine months after the project is launched. More than two-thirds of the completed unsold properties have been on the market for more than five years. That’s really the downside.

 

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).

 

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).

 

Nevertheless, prices remain “sticky” downward. The usual expectation that supply and prices will adjust to demand seems in suspension. The fault is not just the Ministry but a whole number of actors – local governments, developers, banks and just “greed” by some consumers who purchase to hold. Hopefully, we are not leading to the 2008 U.S. property bubble and cause a banking crisis!

 

References:

Nearly 100,000 homes remain unsold in the first three months of 2025, Aliza Shah, Iylia Marsya Iskandar, New Straits Times, 1 September 2025

 

The sticky stats of overhang properties, Pankaj C. Kumar, The Star, 20 September 2025