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Residential construction surges in Q1 2025 amid mixed property market signals

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Malaysia’s residential property sector showed strong construction activity in the first quarter of 2025, marking a significant rebound in development momentum despite a dip in overall property transactions.

According to Abdul Razak Yusak, director general of the Valuation and Property Services Department (JPPH), the number of completed residential units surged by 30.2% to 9,329 units in Q1 2025, up from 7,168 units in the same period last year. Housing starts also recorded a robust 32.5% increase to 28,344 units compared to 21,391 units in Q1 2024.

“This reflects a strengthening development trajectory for the residential subsector,” said Abdul Razak during the release of the Property Market First Quarter 2025 report via Facebook Live.

However, the number of planned new developments dropped to 8,300 units from 11,000 a year earlier, suggesting a more cautious outlook for future supply.

Despite this, residential new launches more than doubled to 12,498 units in Q1 2025 from 5,585 units in Q1 2024, though sales performance remained modest at 10.8%.

On the transaction front, the market experienced a slight slowdown. Total property transactions declined by 6.2% to 97,772, while the total value dropped by 8.9% to RM51.42 billion, down from RM56.47 billion in Q1 2024.

Abdul Razak noted that while the market started slower, the strong pace of construction and rise in new launches are helping to sustain positive momentum. He attributed this to ongoing government support through housing initiatives like the Program Residensi Rakyat (PRR) and Projek Rumah Mesra Rakyat (RMR), as well as strategic infrastructure projects such as the Forest City Special Financial Zone and the Johor–Singapore Special Economic Zone.

The residential overhang—unsold properties completed and available for sale—recorded a slight increase, with 23,515 units worth RM15 billion, up 1.6% in volume and 7.7% in value from the previous quarter.

Meanwhile, the shopping complex sector saw a slight improvement, with occupancy rising to 79% from 78.8% a year earlier.

The Malaysian House Price Index (MHPI) for Q1 2025 stood at 225.3 points, with an average price of RM486,070 per unit and a modest annual growth of 0.9%.

Looking ahead, Abdul Razak expressed optimism that the property market will remain resilient, supported by continued construction activity and new housing supply.

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Penang Hill cable car project on track, first tower to rise by June

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The much-anticipated Penang Hill cable car project is progressing as planned, with the first ropeway tower set to be erected by the end of June 2025. According to Penang Hill Corporation (PHC) general manager Datuk Cheok Lay Leng, caisson piling works are currently underway at all four main project sites, including the cable car stations and a multi-storey car park.

The RM245 million project, awarded to Hartasuma Sdn Bhd in December 2022 under a 30-year public-private partnership, aims to provide an alternative and environmentally responsible transport route to Penang Hill. The system will feature three main stations—Garden, Turn, and Hill.

As of now, the project is 6.5% complete. Cheok confirmed that 12 of the 33 required caisson foundations for the towers have been installed. These foundations are critical for the safe and stable installation of the ropeway towers, which are currently being fabricated off-site for progressive delivery to the construction locations.

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To reduce the environmental impact, the number of towers within the forest reserve has been limited to five, with the remaining ten situated outside it. “We’ve taken measures to preserve as much of the forest as possible,” Cheok said, adding that careful alignment is crucial to ensure a smooth cable car ride for passengers.

A key component of the development is a multi-storey car park at the site of the former food court near the Botanic Gardens, which has been cleared. Groundworks and environmental safeguards have already been implemented at the site. The car park will help alleviate traffic congestion by providing additional parking for visitors.

PHC is closely monitoring construction progress to ensure full compliance with safety and environmental regulations. Public safety notices and traffic advisories have been issued, particularly for areas affected by construction activities along Jalan Kebun Bunga, the Jeep track, and Summit Road.

The project is expected to be completed by the end of 2026, with operations targeted to begin in the second quarter of 2027, following thorough safety inspections and system commissioning.

“This project will offer visitors a new way to experience Penang Hill while adhering to the highest safety standards,” Cheok added.

No tolerance for housing misuse, says Penang housing exco

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The Penang State Government is stepping up efforts to combat the misuse of affordable housing, following a high-level enforcement and legal committee meeting chaired by the Penang housing and environment state exco Dato Seri Sundarajoo on May 5. The meeting, held at Bilik Nilam in KOMTAR, marked the first session of the Enforcement and Legal Action Committee under the Penang State Housing Board (LPNPP) for the year.

Described as a crucial platform, the session focused on strengthening enforcement against the growing abuse of affordable housing units, particularly under the Rumah MutiaraKu scheme and the People’s Housing Project (PPR). Also present were Youth, Sports and Health Exco YB Gooi Zi Sen, as well as several state assemblymen including YB Wong Yuee Harng of Pengkalan Kota, YB Chee Yeeh Keen of Bagan Jermal, and YB Phee Syn Tze of Sungai Puyu, alongside senior officials from LPNPP.

During the meeting, Sundarajoo reaffirmed the state’s commitment to upholding integrity and accountability in the allocation and management of affordable housing. He stressed that any violation of tenancy terms would be met with firm action from the state. A key concern raised was the issue of tenants who fail to pay their monthly rent, which directly affects the financial resources available for maintaining the buildings and their surroundings. Another major concern involved the illegal subletting of housing units to foreign nationals or third parties who are not eligible for such housing. These practices, he said, not only breach tenancy agreements but also deny deserving Penangites access to affordable homes.

Sundarajoo underscored that the state government will not compromise when it comes to such misconduct. He called for a strengthening of existing legislation to ensure enforcement actions can be carried out more effectively. This includes improving monitoring systems, expediting legal processes, and introducing new clauses in tenancy agreements to prevent further abuse.

He concluded by affirming the state’s unwavering commitment to ensuring that every affordable housing unit benefits the rightful recipients—particularly low- and middle-income residents of Penang. This, he said, aligns with the government’s broader goal of building a more inclusive and prosperous community.

SITE PROGRESS: Mertajam Heights (May 2025)

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About Mertajam Heights

A residential development in the heart of Bukit Mertajam. Strategically located along Jalan Ciku, immediately opposite Ng Yam Huat food court with an abundance of essential amenities within 2km radius. The development features a 21-storey apartment building that offers a total of 278 residential units and 4 levels of car park. The residential units come in various sizes, ranging from 1,000sq.ft. to 1,498sq.ft. and offer a dual-key option.

*Photo taken end-April 2025

Find out more about Mertajam Heights

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One Mutiara

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One Mutiara, a proposed affordable housing development by PDC Properties Sdn. Bhd. at Pantai Jerjak. Located on approximately 2 acres of land along Tun Dr. Lim Chong Eu Expressway, accessible via Jalan Pantai Jerjak 6. It is strategically located near Sungai Nibong and Queensbay, surrounded by abundant essential amenities such as schools, banks, markets, mall and popular eateries.

This development will involve the construction of a 27-storey skyscraper, comprising 356 affordable units and six levels of car parking podiums. The total development value is RM115.9 million.

More details to be available upon official launch.

READ MORE ABOUT AFFORDABLE HOUSING:

Project Name : One Mutiara
Location : Pantai Jerjak
Property Type : Affordable housing and mixed development
Land Tenure: (to be confirmed)
Land Area: 1.97 acres
Built-up Size: (to be confirmed)
Total Units : 356
Indicative Price : (to be confirmed)
Developer : PDC Properties Sdn. Bhd.

Register your interest here for updates on this project and other property news

(This information will be used to keep you updated on the project and future development.)
*By submitting this Form, you hereby agree to our PDPA Consent Clause.
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DISCLAIMER: This article is solely based on research done using publicly available data. This is not an advertisement. Any claim, statistic, quote or other representation about a project or service should be verified with the developer, provider, or party in question.