Malaysia’s residential property overhang continued to increase in the first quarter of 2026 (Q1 2026), with the number of completed but unsold homes rising to 32,801 units, up from 23,515 units recorded in the same period last year, according to the latest Property Market Status Report released by the National Property Information Centre (NAPIC).
The completed unsold residential units were valued at approximately RM16.37 billion, reflecting the continued mismatch between housing supply and market demand across several states and price segments.
Among the states, Perak recorded the highest residential overhang with 4,063 units, followed by Johor (3,852), Selangor (3,745), Kuala Lumpur (3,733) and Penang (3,165).
Penang overhang increases by 16%
Penang recorded 3,165 completed unsold residential units in Q1 2026, representing a 16% increase from 2,729 units in the corresponding quarter of 2025. The state ranked fifth nationwide in terms of residential overhang.
The latest figures show that Penang’s overhang remains heavily concentrated in the high-rise segment. Condominiums and apartments accounted for 2,215 units, or nearly 70% of the state’s completed unsold homes, while the remaining inventory comprised landed residential properties and flats.
This suggests that the challenge in Penang is largely centred on the supply of stratified residential developments, where market absorption has been slower than anticipated.
Majority of overhang falls within the RM200,000 to RM400,000 range
A breakdown by price range reveals that Penang’s residential overhang is not dominated by luxury homes. Instead, the largest number of completed unsold units falls within the RM200,001 to RM300,000 price bracket, with 708 units, followed by the RM300,001 to RM400,000 segment, which recorded 412 units.
The figures indicate that while affordability remains a key concern for many homebuyers, the overhang is also influenced by a mismatch between the type of homes being supplied and actual market demand. This mirrors the national trend, where completed unsold homes are spread across multiple price categories rather than being confined to either affordable or premium housing.
Better alignment between supply and demand
While Penang continues to benefit from strong long-term growth drivers, including the Penang LRT Mutiara Line, Silicon Island and the expansion of Penang International Airport, the latest NAPIC data underscores the need for future residential developments to better align with market demand.
With nearly seven out of every 10 completed unsold homes being condominiums or apartments, developers may need to place greater emphasis on product mix, pricing and buyer preferences to improve market absorption. As new infrastructure projects and economic investments continue to strengthen the state’s appeal, a more demand-driven approach to future housing supply will be crucial in reducing Penang’s residential overhang over the coming years.
