Q3 2025: Malaysia Property Market

Transaction Value Rises to RM64.4 Billion Despite Lower Volume

Malaysia’s real estate market delivered a mixed but generally resilient performance in Q3 2025, with the overall transaction value increasing to RM64.4 billion, marking a 12.5% year-on-year (YoY) growth. This upward trend is largely supported by rising property prices in major urban centres and continued strength in the commercial and industrial sectors. The data indicates that while Malaysians are still buying properties, they are doing so more selectively—focusing on high-quality developments, well-connected locations, and future-proof investment areas.

Despite the higher value, the total transaction volume fell by 3.5%, reflecting cautious buyer sentiment amid elevated interest rates and global economic uncertainty. Many purchasers, especially first-time buyers, are delaying decisions or shifting focus to projects offering better value, incentives, or long-term capital appreciation. Developers are responding to this shift by enhancing facilities, improving layouts, and offering more flexible financing packages to sustain demand.

Nonetheless, several structural factors continue to support Malaysia’s transaction value growth. Property prices in Klang Valley, Johor Bahru, and Penang—the country’s most dynamic economic regions—have trended upward due to stronger demand, limited supply in prime districts, and the impact of major transport infrastructure upgrades. Klang Valley remains the top performer, supported by strong employment growth, rapid urbanisation, and improved accessibility from projects such as MRT3 and various highway expansions.

Johor Bahru, meanwhile, continues to gain traction thanks to the progress of the Johor Bahru–Singapore Rapid Transit System (RTS) Link, which is enhancing investor confidence and attracting both local and cross-border buyers. The RTS corridor has emerged as one of the strongest investment hotspots, with residential and commercial properties near Bukit Chagar, JBCC, and Danga Bay experiencing higher price resilience and increasing rental demand.

Penang also contributed significantly to the national value increase, bolstered by its thriving semiconductor and high-tech manufacturing clusters. The island’s limited land supply, rising foreign interest, and strong industrial ecosystem have supported price appreciation in both residential and industrial segments.

Beyond residential real estate, Malaysia’s industrial and logistics sectors remain the standout performers of Q3 2025. Demand for warehouses, data centres, fulfilment hubs, and manufacturing facilities continues to climb, driven by e-commerce expansion, supply chain diversification, and increased foreign investment. Investors and REITs are actively acquiring quality industrial assets in strategic logistics corridors, including Shah Alam, Kulim, Seberang Perai, Senai, and Pasir Gudang.

Infrastructure development remains a major support pillar for transaction value growth. Major projects—such as MRT3, RTS Link, Penang LRT, ECRL progress, highway upgrades, and new connectivity routes—continue to improve mobility and enhance land values along key urban corridors. These improvements increase the attractiveness of properties located in transit-oriented, high-growth corridors, encouraging long-term investment decisions.

Overall, while the Malaysian property market faces short-term challenges from interest rates and global uncertainties, Q3 2025 data shows that value-driven growth remains intact. Buyers are more cautious, but they are prioritising developments with strong fundamentals and choosing markets backed by infrastructure, economic activity, and future demand drivers. As 2026 approaches, analysts expect continued resilience in the residential market and sustained momentum in industrial and logistics properties—supported by Malaysia’s position as a rising regional investment hub.

At the same time, Malaysia experienced a major contraction in new housing supply in 2025, with nationwide launches falling more than 40% year-on-year. Developers are taking a more conservative approach in response to high construction costs, affordability challenges, and reduced loan approval rates.
Unsold residential units have increased, especially in areas where supply exceeds demand or where pricing does not match local income levels.

Developers are adapting by launching smaller units, focusing on mixed-use developments, and prioritising sites with strong transit connectivity such as MRT, LRT, BRT and RTS corridors. Despite challenges, well-positioned projects in KL fringe areas, Penang Island and Johor’s CIQ–RTS corridor continue to show strong take-up rates and rental performance.

Johor remains one of the strongest-performing real estate markets in 2025, driven by Singapore-based buyers, hybrid workers, cross-border commuters and investors seeking high rental yields. The CIQ–RTS–JBCC corridor shows especially strong rental demand ahead of the RTS Link opening in 2026.
Units near Bukit Chagar and JBCC are experiencing higher occupancy and rising rental rates, with many investors positioning themselves early for cross-border growth.

The Johor–Singapore Special Economic Zone (JS-SEZ) is further boosting business activity, increasing the number of professionals, companies and tenants relocating to Johor Bahru. This has strengthened demand for serviced apartments and well-connected urban homes.

Looking ahead to 2026, the Malaysian property market is expected to remain stable with regional differences becoming more pronounced. Positive drivers include the opening of the RTS Link, major urban renewal projects, industrial sector expansion, and improving consumer sentiment.
Challenges include a persistently high interest-rate environment and ongoing affordability concerns, especially for first-time buyers.

Overall, Malaysia is entering a phase of steady, structural recovery. Transaction value is increasing, new supply is being rationalised, and developers are focusing on quality and location. Johor, particularly the CIQ–RTS–JBCC corridor, continues to lead national growth and is expected to enter a strong expansion cycle as 2026 approaches.